Question1 and 3 charles

1. What was Analog Devices’ strategy in the second half of the 1980s?

In the second half of the 1980s, ADI implemented the performance measurement systems to make the quality improvement process become a way of life at ADI. The new president Schmeiderman maintained using the half-life of the improvement process and also made goals for a series of quality measures. The goals were determined by combining customer demands with realistic expectation of each measure’s half life. Moreover, Schneiderman advocated using the balanced scorecard to indicate how well ADI was moving toward its goal.

3. Identify the conflicts that exist between the QIP measures and the measures reported by the financial system. Which numbers should we believe? Can they be reconciled?

The reports of financial system just focus on the financial measures, but the QIP measures incorporate both financial and non-financial performance measures. Moreover, using only financial measures may encourage the short-term action and non-challenging performance targets, but QIP measures encourage the long-term and high-risk investment in the future.
In sum, we should measures and evaluate business unit manager using both QIP and financial measures, non-financial as well as financial. Companies should use non-financial measures at lower levels in the organization for task control and financial measures at higher organizational levels for management control. It is important for senior executives to track not only financial measures, but also non-financial measures.