Skip to main content

Performance Prism - A Performance Measurement Approach

As the companies grow in the size, the number of stakeholders increase. Companies have to cater to the interests of its stakeholders such as local communities, vendors, employees, legislators so on and so forth. Performance prism is an ideal tool to analyse.



Performance Prism is one of the development in management accounting put forth by Cranfield University. The theory is performance of an organisation depends on how effectively it meets the needs and requirements of all its stakeholders.

The five facets of the Performance Prism:

1. Stakeholder Satisfaction
2. Stakeholder Contribution
3. Strategies
4. Processes
5. Capabilities

Try Lovefilm for 2 weeks of FREE DVD rentals!


Approach: Starting with Stakeholders, not with Strategy. Five key questions for measurement design:
  1. Stakeholder Satisfaction – who are the key stakeholders and what do they want and need?
  2. Strategies – what strategies do we have to put in place to satisfy the wants and needs of these key stakeholders?
  3. Processes – what critical processes do we require if we are to execute these strategies?
  4. Capabilities – what capabilities do we need to operate and enhance these processes?
  5. Stakeholder Contribution – what contributions do we require from our stakeholders if we are to maintain and develop these capabilities?
Once the answers to the above questions have been dealt, Performance Prism can use the results to identify performance measures which will enable the company to monitor the success of processes in place.

Click Here for Misco's Range of Apple Products!


Further Reading:

Post Accountancy Jobs on Management Accountant Job Board

Join Management Accountant Groups



Do you like to be updated in Accountancy ?

Subscribe to Management Accountant by Email


Or


Subscribe in a reader


SAP Store, UK

Visit MA Stores ? You will find something you are looking for ....


Management Accountant Store, US - Powered by Amazon
Management Accountant Store, UK Stores - Powered by Amazon, UK

You may also like to read
  1. Business, Customer Value & Management Accounting 19-June-08
  2. Activity Based Management - Dispelling the myths Par I - 13-June-08
  3. Learning Curve Theory
  4. Transfer Pricing
  5. Stakeholder Analysis
  6. Strategic Drift
  7. Strategy Development
  8. Combined Code of Corporate Governance UK
  9. Management Accountant Job Board
  10. How to Share Blog posts with friends 25-May-08
  11. Management Accountant Blog Home






RSS Feeds to keep you alive and up-to-date
  1. Management Accountant
  2. Accountancy News
  3. My Favorite Blogs that I track
Labels:

Comments

Post a Comment

Popular posts from this blog

Learning Curve Theory

Learning Curve Theory is concerned with the idea that when a new job, process or activity commences for the first time it is likely that the workforce involved will not achieve maximum efficiency immediately. Repetition of the task is likely to make the people more confident and knowledgeable and will eventually result in a more efficient and rapid operation. Eventually the learning process will stop after continually repeating the job. As a consequence the time to complete a task will initially decline and then stabilise once efficient working is achieved. The cumulative average time per unit is assumed to decrease by a constant percentage every time that output doubles. Cumulative average time refers to the average time per unit for all units produced so far, from and including the first one made.

Major areas within management accounting where learning curve theory is likely to have consequences and suggest potential limitations of this theory.


Areas of consequence:
A Standard Costing …
1 comment
Read more

Resistence to Change - Approaches of Kotter and Schlesinger

The Six (6) Change Approaches of Kotter and Schlesinger is a model to prevent, decrease or minimize resistance to change in organizations.
According to Kotter and Schlesinger (1979), there are four reasons that certain people are resisting change: Parochial self-interest (some people are concerned with the implication of the change for themselves ad how it may effect their own interests, rather than considering the effects for the success of the business)Misunderstanding(communication problems; inadequate information)Low tolerance to change (certain people are very keen on security and stability in their work)Different assessments of the situation (some employees may disagree on the reasons for the change and on the advantages and disadvantages of the change process) Kotter and Schlesinger set out the following six (6) change approaches to deal with this resistance to change: Education and Communication - Where there is a lack…
1 comment
Read more

Throughput Accounting

Throughput accounting (TA) is an alternative to cost accounting proposed by Eliyahu M. Goldratt. It is not based on Standard Costing or Activity Based Costing (ABC). Throughput Accounting is not costing and it does not allocate costs to products and services. It can be viewed as business intelligence for profit maximization. Conceptually throughput accounting seeks to increase the velocity at which products move through an organization by eliminiating bottlenecks within the organization.


Cost (or Management) accounting is an organization's internal method used to measure efficiency. Since no one outside the organization uses such internal accounts for investment or other decisions, any methods that an organization finds helpful can be used.


Throughput accounting improves profit performance with better management decisions by using measurements that more closely reflect the effect of decisions on three critical monetary variables (throughput, inventory, and operating expense — defin…
Post a Comment
Read more