Many Companies Do Not Identify and Act on the Correct

question 14

Multiple Choice

Many companies do not identify and act on the correct non-financial measures.One of the four major mistakes that companies make is _______.In other words,they do not verify that the non-financial measures lead to financial performance.

• A) Not linking measures to strategy
• B) Not validating the links
• C) Not setting the right performance targets
• D) Measuring incorrectly
• E) Not creating a balanced scorecard

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Definitions:

Constant Returns to Scale

A situation in which the proportionate increase in inputs leads to an equal proportionate increase in outputs, meaning costs and outputs scale equally as production expands.

Diseconomies of Scale

A situation where a business's cost per unit increases as it produces more items, due to inefficiencies that arise with scaling up production.

Plant Size

Refers to the physical capacity or output level of a manufacturing or production facility.

Output Levels

The quantity of goods or services produced by a company, sector, or economy in a given period of time.