Provide short answer to the following question: 1. Think of a company where you

Question

Provide short answer to the following question: 1. Think of a company where you have worked that had the wrong performance metrics or measurements, this means that although the performance metrics at shop floor level were right on target/as per standard, financial results were indicating low performance, thus indicating that the shop floor performance metrics were not tied to financial outcome/performance. If you had this situation, explain how it was resolved? Note: lf you have notexperienced this, answer based on hypothetical model, explain your answer.

Explanation / Answer

This is a very common scenario in companies which are going through bad phase and are not generating suffient cash flows from some of its SBUs to fund their operations .Corporate houses are clustered in small parts called Strategic Business Units (SBU) and each SBU has its own targets and performance metrics considering the market supply and demand factors and the teams work during the year to achieve those targets.

I am of the opinion that each SBU should be rated and incentivised on the basis of its own performance.Its performance should not be tied with the overall performance of corporate.Non performance by a business unit should not impact the performance of the unit which is achieving its targets.

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