## **Learning Outcomes**

After reading this article, you will be able to explain how strategic objectives are cascaded through an organisation, ensuring alignment at all levels. You will distinguish between the coordination of planning and control activities, outline how accountability is allocated throughout the performance hierarchy, and identify common risks that occur when objectives, measures, and responsibilities are misaligned. You will also be able to critically assess the effectiveness of performance management systems in supporting strategic plans.

## **ACCA Advanced Performance Management (APM) Syllabus**

For ACCA Advanced Performance Management (APM), you are required to understand how strategic planning and control processes link organisational mission and objectives to individual and departmental actions. This article is relevant for the following syllabus areas:

- The translation of strategic objectives to tactical and operational targets
- The role of cascading objectives in performance management
- Accountability structures within planning and control systems
- The coordination of planning and control across organisational levels
- Risks of misalignment and methods for ensuring goal congruence

## **Test Your Knowledge**

_Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision._

1. What is the main purpose of cascading objectives within an organisation?
   a) Ensuring only senior management is accountable for all outcomes  
   b) Translating the mission into measurable actions at all levels  
   c) Increasing hierarchical complexity  
   d) Avoiding the need for control systems

2. Which statement best describes accountability in a performance management system?
   a) Accountability is only necessary for operational staff  
   b) Each manager is only responsible for their own personal objectives  
   c) Accountability links planned objectives to actual results at all levels  
   d) Accountability is not required if planning is effective

3. True or false? Strategic objectives and operational targets must always be closely aligned to ensure effective organisational control.

4. List two potential risks if there is a mismatch between strategic plans and the accountability assigned at lower organisational levels.

## **Introduction**

Strategic planning alone does not guarantee organisational success. Effective performance management requires both the coordination of planning and control systems and a clear allocation of accountability at every organisational level. This ensures that strategic objectives are broken down into actionable targets and that every manager and employee understands their role in achieving corporate goals. Misalignment or gaps in this process can result in missed targets, inefficiency, and conflicting priorities across the business.

> **Key Term: cascading objectives**
> The process of translating high-level organisational goals into progressively more detailed targets for departments, teams, and individuals to ensure all actions support the overall mission.

## **PLANNING AND CONTROL COORDINATION**

A coherent performance management system ensures that planning (what is to be achieved) is integrated with control (how actual results compare with plans) throughout the organisation. For this process to work, objectives must be designed to cascade from the strategic level to tactical and operational levels, with control mechanisms corresponding at each step.

### Cascading Objectives

Cascading objectives is the process by which an organisation’s mission and strategy are translated into specific, measurable goals at every level.

- Strategic objectives are broad, long-term, and set by top management.
- Tactical objectives are more detailed, usually set at business unit or departmental level, and focus on how the strategic aims will be delivered.
- Operational objectives are specific, short-term targets that guide day-to-day activities.

Each level’s objectives should directly support the level above, ensuring alignment and coherence throughout the business.

> **Key Term: accountability**
> The obligation of individuals or units within an organisation to report on their achievement of assigned objectives and to accept responsibility for their outcomes.

### Accountability and Responsibility in Cascading Objectives

As objectives are cascaded, clear accountability must be established. This is typically achieved by:

- Assigning responsibility for each objective to a particular manager or team.
- Defining clear performance indicators and targets for each responsibility area.
- Establishing reporting and feedback processes so that progress towards objectives is regularly measured, analysed, and acted upon.

> **Key Term: performance alignment**
> The process of ensuring that individual, team, and departmental objectives are consistent with and contribute directly to organisational strategy.

### Coordination of Planning and Control

- **Planning** involves setting objectives, identifying actions, allocating resources, and establishing performance measures.
- **Control** involves monitoring actual performance, comparing it against targets, analysing variances, and taking corrective action.

Coordinated planning and control requires that:

- Control reports and feedback are established at every level where objectives are set.
- Accountability rests with those who have control over relevant inputs and processes.
- Corrective action is prompt and focused on closing gaps between actual and planned performance.

## ALIGNMENT, MISALIGNMENT, AND RISKS

Alignment across levels and units is essential to prevent conflicts and inefficiency. When objectives, measures, and accountability are not aligned, the risks include:

- Departments prioritising their own goals over organisational strategy.
- Managers being evaluated on measures they cannot influence.
- Performance reports tracking irrelevant or conflicting indicators.
- Critical strategic initiatives failing due to lack of operational buy-in.

> **Key Term: goal congruence**
> The degree to which individual and departmental objectives and incentives are consistent with and support the organisation’s overall mission and strategy.

### **Worked Example 1.1**

A company's strategic objective is to expand its international market share by 25% over five years. The marketing department is set a performance target to maximise short-term domestic revenue this financial year, and their bonus is linked to this metric.

**Question:**  
Identify the accountability issue and suggest how the objectives should be cascaded to support the strategy.

> **Answer:**  
> The marketing department is incentivised to increase domestic revenue, which does not support the international expansion strategy. There is an accountability gap and a misalignment of performance measures. Their objectives and incentive scheme should include specific targets for international market growth, aligning their focus and efforts with the overarching strategy.

### **Worked Example 1.2**

The operations team at a manufacturing firm is evaluated against cost reduction metrics. However, the company's strategy is to achieve premium product quality and superior customer service.

**Question:**  
Explain how this performance management approach could undermine the strategy and propose a solution.

> **Answer:**  
> By focusing solely on cutting costs, the operations team may reduce quality or customer service, undermining the organisation's premium positioning strategy. To resolve this, operational objectives should balance cost efficiency with explicit quality and service targets, and accountability should be linked to all relevant measures.

### **Exam Warning**

> In ACCA APM exams, scenarios often test your ability to spot misaligned objectives or accountability gaps that threaten goal congruence. Always check if performance indicators and rewards at lower levels support or contradict strategic priorities.

## **Summary**

Cascading objectives and clear accountability are the cornerstones of effective strategic planning and control. Objectives must flow from strategy to operations, and every action and performance measure must support the overall mission. Planning and control systems must be tightly coordinated, with appropriate feedback loops and accountability structures at each level. Where alignment fails, the entire organisation risks working at cross-purposes.

## **Key Point Checklist**

_This article has covered the following key knowledge points:_

- Explain the purpose of cascading objectives in strategic planning and control
- Distinguish between planning and control activities at different organisational levels
- Describe how accountability supports performance alignment
- Identify risks of misalignment between objectives and accountability
- Apply the principles of coordinated planning and control to real-world scenarios
- Analyse the impact of misaligned incentives and objectives on organisational success

## **Key Terms and Concepts**

- cascading objectives
- accountability
- performance alignment
- goal congruence

Strategic planning and control coordination - Cascading objectives and accountability