Eastvaco, due to its decreasing financial condition, is concerned with maintaining control over their costs. This
is particularly a problem at the Charlotte plant. The plant manager has been under some pressure to improve
performance measurement. The three products, envelopes, cups and packaging are made from recycled
materials. Unfortunately, there is not always enough recycled material available and Charlotte has to purchase
other material. Since all three products have similar manufacturing processes some aggregation of data is
possible. There are three product managers responsible for envelopes, cups and packaging, respectively. The
plant manager asks the three product managers to meet with him to discuss how best to measure performance
and control costs. A heated discussion erupts about the effectiveness of financial vs. nonfinancial measures.
The cup manager contends that numbers do not tell the whole story while the packaging manager states,
“numbers are objective” and is the only way to determine how we are doing. The envelope manager takes a
middle ground, “we need both.” After several hours the plant manager becomes impatience and states, “how
can we even begin to measure anything when my managers don’t agree on how or what to measure.” He asks
for the following:
1. What nonfinancial issues and measures should we consider and why?
password:shiv
is particularly a problem at the Charlotte plant. The plant manager has been under some pressure to improve
performance measurement. The three products, envelopes, cups and packaging are made from recycled
materials. Unfortunately, there is not always enough recycled material available and Charlotte has to purchase
other material. Since all three products have similar manufacturing processes some aggregation of data is
possible. There are three product managers responsible for envelopes, cups and packaging, respectively. The
plant manager asks the three product managers to meet with him to discuss how best to measure performance
and control costs. A heated discussion erupts about the effectiveness of financial vs. nonfinancial measures.
The cup manager contends that numbers do not tell the whole story while the packaging manager states,
“numbers are objective” and is the only way to determine how we are doing. The envelope manager takes a
middle ground, “we need both.” After several hours the plant manager becomes impatience and states, “how
can we even begin to measure anything when my managers don’t agree on how or what to measure.” He asks
for the following:
1. What nonfinancial issues and measures should we consider and why?
password:shiv
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