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PhD 3743: Measuring Performance: Scorecards and League Tables, 10/28/2017
PhD 3743: Measuring Performance: Scorecards and League Tables, 10/28/2017
1 Introduction
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Kaplan's 4
ROI by business cycle
Pricing developed for ROI (80%)
Explicit mgmt incentives tied to profits
Transfer pricing
3 Harsh Measures
Correlation problem
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Problems with BSC
finding right measures across business
combining effectively
establish legitimacy.effectiveness for compensation
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Control and legitimacy
Vroom's expectancy theory of motivation
clear relationship between effort, performance, reward
reward on offer is desired
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Legitmacy- Education by Marsden's 4
Pay attention to "good" students
Exclude "less smart" students from school
Move to higher performing school
Inflate student grades where possible
4 Accountability Noise
Wine Example by Parker Scores
quality reliability
create perception of quality
producers conform to Parker tastes
Industries using rankings
price/quality tradeoff is opaque
market is differentiated
market has no single dominant producer
individual consumer choice requires huge outlay
difficult to go back on purchase decision
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growth in public accountability
internal performance measures defined by outsiders
does this homogenize firms in the same industry?
markets = status systems, or power of the brand
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