Choosing Performance Measures The President of the Canby Insurance Company Has Just Read

question 4

Essay

Choosing Performance Measures
The president of the Canby Insurance Company has just read an article on the balanced scorecard.A company has a balanced scorecard when there is a set of performance measures that reflect the diverse interests and goals of all the stakeholders (shareholders,customers,employees,and society)of the organization.Presently,Canby Insurance Company has only one performance measure for the top executives:profit.The board of directors claims that profit as the sole performance measure is sufficient.If customers are satisfied and employees are productive,then the company will be profitable.Any other performance measure will detract from the basic goal of making a profit.
Required:
Explain the costs and benefits of only having profit as a performance measure.

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Definitions:

Full-Line Wholesalers

Businesses that provide a complete range of goods within a specific sector.

Channel Functions

The roles and activities performed by intermediaries within a distribution channel to move products from producers to consumers.

Rack Jobbers

Distributors who place products in stores on consignment and retain ownership of the products while managing inventory and setup.

Limited-Service

Describes businesses or offerings that provide a smaller range of services compared to full-service counterparts, often to specialize or reduce costs.