ACCA P5 Interim Assessment Essay

5876 Words Sep 29th, 2014 24 Pages
ACCA
Paper P5
Advanced Performance Management
December 2011

Interim Assessment – Answers
To gain maximum benefit, do not refer to these answers until you have completed the revision mock questions and submitted them for marking.

PAPER P5 : ADVANCED PERFORMANCE MANAGEMENT

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(b)

Although managers can sometimes make excellent decisions on a hunch or 'by instinct', in the long run their decision-making will be more rational and soundly based when they are properly informed. The quality of management decisions is always likely to be better when managers are well-informed about the different options available, and the likely outcome of pursuing each different course of action.

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PAPER P5 : ADVANCED PERFORMANCE MANAGEMENT

When the future is uncertain, management information helps to reduce the uncertainty and analyse the risks involved.
When the business environment is changing rapidly, organisations must adapt to survive and grow. Information systems can help managers to recognise the nature of the changes that are happening, and their potential significance. They can then formulate new strategies to adapt to the changing circumstances.
However, the type of information required by management differs between a rapidly changing business environment and a stable environment. In a stable environment, most information needs can be obtained from within the organisation and derived from historical results. The past is a useful guide to the future. In a rapidly changing environment, in contrast, information has to be more forward-looking, taking account of risk and uncertainty. Information sources are also likely to be sourced

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