It Is Commonly Recommended That the Managers of a Firm

question 21

Essay

It is commonly recommended that the managers of a firm compare the performance of their firm to that of its peers.Increasingly,this is becoming a more difficult task.Explain some of the reasons why comparisons of this type can frequently be either difficult to perform or produce misleading results.

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Definitions:

Glass-Ceiling Effect

An unofficially acknowledged barrier to advancement in a profession, especially affecting women and minorities, regardless of qualifications or achievements.

Ecological Fallacy

A logical error that arises when conclusions about individual behavior are drawn from group data.

Outputs Relative

The concept of comparing the productivity, efficiency, or performance outcomes of an entity to another or to a set standard.

Cost of Inputs

The total expenses incurred to acquire resources necessary for the production of goods or services.