What part does customer and employee satisfaction play in
overall business success?
Management Accountants developing business models must consider
this question, especially if they are taking the popular "balanced
scorecard" or "strategy mapping" approaches to performance
measurement. When doing so, stating cause-and-effect relationships
between measurable factors like satisfaction and profitability is
common practice. However, few companies test their own hypotheses.
If the links are incorrect, these models can actually guide the
firm down a path to failure.
This report reveals the findings of state-of-the-art
interventionist research on a major US homebuilder. The core claims
of this company s business model were positive effects in the
future due to improvements in customer and employee satisfaction.
Tests were made on the validity of these claims to discover how
much we can rely on these factors to improve performance. This
report also examines how effective various measurement alternatives
are through analysis of data compiled by different consulting
companies.
The results reveal that the links between satisfaction and
performance is less strong and more complex than the company had
assumed: these measures cannot be relied upon to guarantee
increased performance. Managers must have a sophisticated
understanding of performance measurement systems and to test their
strategy maps empirically, rather than relying on their intuitions.
This report demonstrates how you can achieve both.
* State-of-the-art interventionist research: new method in which
researchers interact with the subject of the research, monitoring
the effects of their input
* Helps managers protect their businesses from badbusiness
modelsthrough sophisticated understanding of likely causes of
success
* Shows managers how to analyse data in balanced scorecards and
strategy maps to draw reliable conclusions to make the best
decisions for their business"
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