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ACCA Strategic Professional · Advanced Performance Management · Performance hierarchy

Zenith Hotels' board states its mission as 'to be the preferred business hotel chain in Asia'. The finance director wants to identify the few areas in which the hotels must perform particularly well for the mission to be achieved. Which of the following correctly describes these areas and how they relate to key performance indicators (KPIs)?

The areas where the hotels must excel to achieve the mission are critical success factors. Key performance indicators are then selected to measure how well each CSF is being delivered, so CSFs come first and KPIs monitor them.

  1. AThey are critical success factors (CSFs), and KPIs are then chosen to measure how well each CSF is being achievedCorrect
  2. BThey are key performance indicators, and critical success factors are then chosen to measure how well each KPI is achieved
  3. CThey are strategic objectives, and they are measured only by financial KPIs
  4. DThey are performance targets, which replace the need for KPIs

Explanation

CSFs are the limited number of areas where performance must be excellent for the mission or objectives to be achieved. KPIs are the measures used to monitor performance on each CSF. The second option reverses this relationship.

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