Discuss the following statement: Measuring performance is integral to successful business operations.

Expert Solution

Measuring business performance is important for success in business. Unless performance is measured the business will not know where to direct its efforts. This allows the business to assess its profit and loss position and compare its performance over a period of time. This also allows the business to assess whether its activities have borne any fruits or not. For instance a firm might have entered into a new product line and measuring the performance will allow it to assess whether this business operation was successful and what should be its future course of action.

Measuring performance allows the business to compare itself with its competitors and assess whether it needs to put in more efforts or plan different strategies to stay ahead of the competition. Performance measurement allows the business to communicate, manage and improve its overall performance. It enables the management to align its operational activities with the business objectives armed with clear and measurable metrics and design a future course of action.

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