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Hello Tutor. Hope you are doing well. I have doubt in the following question.
Which of the following statements regarding measurement of performance in not-forprofit organisations is/are true?
1) Output does not usually have a market value, and it is therefore more difficult to measure effectiveness.
2) Control over the performance can only be satisfactorily achieved by assessments of ‘value for money’.
Can the please tell me why Statement 1 is incorrect.
An output describes the result of an activity that a company carries out, but which does not have a measurable impact on its customers.
Its very difficult to measure output, even in current price terms, because it is not possible to assign to their output a value which reflects a real market assessment.
Thankyou Tutor.
For statement 1 the answer is False
“Output does not usually have a market value and it is therefore more difficult to measure efficiency”.
Firstly i didn’t not understood why it’s more difficult efficiency..
Secondly why it’s not difficulty to measure effectiveness.
Can the please answer these 2 questions
It is more difficult to measure efficiency than effectiveness because efficiency is about doing things right while effectiveness is about doing the right things.
Transfer pricing is more difficult to measure efficiency because it involves the allocation of costs between different entities within an organisation.
The allocation of costs can be difficult to measure because it requires a detailed understanding of the operations of each entity and how they contribute to the overall success of the organisation.
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