ACCA Performance Management (F5) Certification Practice Exam

What does the effectiveness measure evaluate in a business context?

1. The quality of input used in production

2. Whether objectives are being met

3. The speed of service delivery

4. The economic value added

The correct answer is: Whether objectives are being met

The effectiveness measure in a business context primarily evaluates whether the organization's objectives are being met. It focuses on the outcomes and results of business activities, assessing how well the organization achieves its goals and fulfills its mission. This may involve looking at various performance indicators, such as customer satisfaction, market share, or overall profitability, depending on the specific objectives established by the organization. By concentrating on the successful attainment of goals, the effectiveness measure ensures that resources are being utilized appropriately and that the overall strategy is aligned with the desired outcomes. An organization that effectively meets its objectives is likely to enhance its performance and competitiveness in the marketplace. The other options touch on different aspects of performance. For instance, while the quality of input is important, it relates more to efficiency and resource utilization rather than directly measuring goal attainment. The speed of service delivery is a dimension of operational performance, which also does not directly correlate with the broader concept of effectiveness. Economic value added focuses on financial performance and profitability but does not encapsulate the full spectrum of whether organizational objectives are achieved. Thus, the measure of effectiveness distinctly aligns with evaluating success in meeting established objectives.