Chapter 4

Performance Targets

If you know the enemy and know yourself, you need not fear the result of a hundred battles.

—Sun Tzu, The Art of War

Introduction

The legendary quote of Sun Tzu highlights not only knowing oneself (the internal strengths and standards of excellence) but also knowing the enemy (the competitors’ strengths and standards which they achieve). In this chapter we illustrate the importance of the different ways that targets can be set including: internal versus external targets, top-down versus bottom-up participation, negotiated targets, and ratcheting. Then we examine how forecasts and zero-based targets can be used to provide inputs into the target-setting process. Forecasts are what you expect to happen and sensitivity ...

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