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CMA Final · Strategic Performance Management and Business Valuation · Introduction to Performance Management

Which of the following best describes the scope of strategic performance management in a large Indian group, compared with operational performance control of a single production department?

Strategic performance management covers the entire organisation, aligning strategy with business-unit goals, resources and stakeholder expectations over the medium to long term. Variance control, budgeting or compliance reporting are narrower operational activities that form only part of this wider scope.

  1. AIt is limited to comparing actual cost with standard cost for each department
  2. BIt covers the whole organisation, linking strategy, business-unit goals, resources and external stakeholder expectations over the medium to long termCorrect
  3. CIt deals only with statutory compliance and audit reporting
  4. DIt is concerned only with preparing the annual budget

Explanation

Strategic performance management takes an organisation-wide, long-term view that aligns strategy, units and stakeholders. Standard-cost variance comparison is an operational tool. Compliance reporting and budgeting alone are narrower parts, not the full scope.

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