Advice on answering question

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    "To what extent do you think that profitability is the most important measure of performance for the directors of a public company in the U.K?"

    Although it isn't a complex question, I find it hard to remember other methods of measurement and how to answer questions like this. Please help!
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    (Original post by megand1999)
    "To what extent do you think that profitability is the most important measure of performance for the directors of a public company in the U.K?"

    Although it isn't a complex question, I find it hard to remember other methods of measurement and how to answer questions like this. Please help!
    You'd have to have a look over the course you've just taken to see what they want you to talk about (i.e. you need to ensure you're meeting the aims set out in the Intended Learning Outcomes).

    I would argue off the top of my head that despite profitability being a key performance measure of any business, public companies perhaps moreso given they are playing with investors money.
    Shareholder's ultimately drive public companies and this can have implications for the organization's original core values or vision. An active investor could force a flatter structure resulting in redundancies for example; why? Well, despite the rhetoric, to save money. If dividends aren't paid, or if investors aren't getting much ROI, or if a public company isn't hitting the targets set out at the start of the financial year; share prices fall (as does the value of the company) and investors start to look elsewhere.

    Of course other measures still matter (client satisfaction/retention, employee satisfaction, you vs competitors among other KPIs).
 
 
 
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