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ACCA Applied Knowledge · Business and Technology · Consequences of ineffectiveness at work

Zeta Ltd has found that poor communication between its sales and production departments has led to missed delivery dates, customer complaints and rework. Which of the following best describes the overall longer-term consequence for Zeta if this is not addressed?

Persistent missed deliveries and rework damage Zeta's reputation and cause customers to leave, reducing revenue and weakening its competitive position. The problem also raises costs through rework, and departments acting independently weakens coordination rather than improving control.

  1. ADamage to reputation and loss of customers, reducing revenue and competitive positionCorrect
  2. BA short-term rise in inventory valuation with no other effect
  3. CAn increase in the proportion of fixed costs only
  4. DImproved internal control because departments act independently

Explanation

Missed deliveries and complaints erode customer confidence, leading to lost repeat business and reputational harm, which reduces revenue and weakens competitiveness. Rework adds cost too. Independent action without communication weakens rather than improves control and coordination.

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