Traditional vs Modern Approaches to Measuring the Performance of a Company

The process of managing the performance of a company necessarily goes through the phase of their measurement. The measures that are applied depend on the information requirements, the set goals, and the defined business strategy of the company. The traditional approach to measuring company performance places emphasis on financial parameters that are expressed quantitatively, thus creating the possibility of dynamic observation of the phenomenon in continuous time periods. In contrast to this approach, the modern approach, in addition to financial, uses non-financial performance measures that are expressed and categorized qualitatively, in accordance with the needs of key stakeholders. The focus of the traditional approach is on analyzing and improving the short-term performance of the company, while the modern approach is dominated by the pursuit of long-term company value.