Deck 18: The Balanced Scorecard and Strategy Maps

Question 1

The purpose of a balanced scorecard is to translate organisational vision and strategies into performance objectives that can be monitored over time.

Answer 1

True

Question 2

The internal business process perspective in a balanced scorecard concentrates principally on employees.

Answer 2

False

Question 3

Managers should focus on finding the "one best measure" of performance based on the type of responsibility center they manage.

Answer 3

False

Question 4

One of the balanced scorecard's biggest advantages is the small amount of time and money involved in its implementation.

Question 5

A balanced scorecard usually contains four perspectives: customer, financial, internal business process, and learning and growth.

Question 6

The nature of an organisation's strategies influences the types of performance objectives managers establish.

Question 7

Balanced scorecard initiatives are sometimes seen as temporary fads by employees.

Question 8

Part of strategic decision making is periodically clarifying organisational vision and core competencies.

Question 9

The basis of a balanced scorecard is continuous strategic analysis from as many perspectives as possible.

Question 10

The balanced scorecard's financial perspective is focused primarily on measures of economic and accounting profits.

Question 11

The balanced scorecard links short-term and long-term performance objectives to organisational vision and strategies.

Question 12

Non-financial measures are typically not objective enough to serve as effective performance measures.

Question 13

In implementing a balanced scorecard, managers should establish performance targets after analysing the first set of scorecard data.

Question 14

An organisation's core competencies can include productivity, reputation, and regulatory advantages.

Question 15

Stakeholders in the strategic decision making process include suppliers, customers, and the community.

Question 16

Successful organisations communicate their vision, strategies, goals, and objectives to upper-level employees.

Question 17

The first step in implementing a balanced scorecard is developing measures for each of the perspectives.

Question 18

Learning and growth measures, if incorporated in a balanced scorecard, cannot focus on employees.

Question 19

Well-run organisations evaluate performance based mainly on financial measures because they are more objective than non-financial measures.

Question 20

Once balanced scorecard measures have been chosen, they should not be changed for at least five years.

Question 21

Components of organisational strategy include

A) Short-term financing
B) Actual operations
C) Financial structure
D) Comparing actual results to the budget

Question 22

Which of the following best describes the relationship between strategies and operating plans?

A) Operating plans form the basis for strategies.
B) Operating plans are the same as strategies.
C) Strategies lead to operating plans.
D) Strategies and operating plans are unrelated to one another.

Question 23

FPM's strategic plan includes the following statement: "We deliver high-quality and timely service to our internal and external customers." That statement is best described as a(n)

A) Mission statement
B) Specific performance objective
C) Operating plan
D) Strategy

Question 24

The primary aim of the balanced scorecard is to

A) Put less emphasis on financial measures because they are too narrowly focused
B) Use performance indicators that are highly objective
C) Translate elements of a company's strategic plan into measurable performance indicators
D) Provide a truthful basis for evaluating managers' performance

Question 25

Non-financial measures include

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 26

Which of the following is a synonym for an organisation's vision?

A) Purpose and ideology
B) Core competencies
C) Organisational strategies
D) Operating plans

Question 27

Financial and non-financial indicators are used to assess organisational performance and effectiveness under which of the following approaches?

A) Balanced budget
B) Balanced scorecard
C) Variance analysis
D) Proforma financial statement

Question 28

Analysis of the gaps between actual operations and performance objectives can be used to

A) I and II only
B) I and III only
C) II and III only
D) I, II, and III

Question 29

An organisational vision is concerned with creating value for stakeholders, including

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 30

An organisation's core competencies are related to its strengths relative to competitors. Those strengths can include

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 31

Managers have traditionally relied on which of the following measures to evaluate performance?

A) Qualitative factors
B) Financial measures
C) Non-financial measures
D) Core competencies

Question 32

Which of the following are inputs to the development of organisational strategy?

A) Organisational vision and operating plans
B) Operating plans and core competencies
C) Actual operations and operating plans
D) Organisational vision and core competencies

Question 33

A representation that provides a visual view of an organisation's strategy with a single-page view of how objectives in the four balanced scorecard perspectives integrate and combine to guide strategy is known as a:

A) Core compentencies
B) Strategy map
C) Mission statement
D) Value chain

Question 34

Which of the following statements about performance evaluation is true?

A) Non-financial measures are less useful than financial measures because they are not as objective
B) Financial measures are less useful than non-financial measures because they are biased
C) A combination of financial and non-financial measures gives a more useful picture of organisational performance than either one alone
D) Only one or two non-financial performance measures should be used

Question 35

Balanced scorecards can improve communication and consensus throughout an organisation.

Question 36

Lack of senior management support is one of the major causes for failed balanced scorecard initiatives.

Question 37

Balanced scorecards, when properly implemented, can guide managers in making more effective decisions.

Question 38

Financial measures used for organisational evaluation can pertain to

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 39

An organisation's operating plans include all of the following except

A) Specific performance objectives
B) Actual operations
C) Short-term financing
D) Short-term resource allocation

Question 40

The balanced scorecard approach to performance evaluation

A) I and III only
B) I and II only
C) II and III only
D) I, II, and III

Question 41

Which of the following measures would be most likely to be found in the learning and growth perspective of the balanced scorecard?

A) Change in market share
B) Training days per employee
C) Residual income
D) Percent capacity utilisation

Question 42

Which of the following measures would be most likely to be found in the internal business process perspective of the balanced scorecard?

A) Change in market share
B) Training days per employee
C) Residual income
D) Percent capacity utilisation

Question 43

Which of the following statements is true?

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 44

The steps and cycles in the value chain are most closely associated with which balanced scorecard perspective?

A) Financial
B) Customer
C) Internal business process
D) Learning and growth

Question 45

National Bank of Victoria (NBOV) is the fourth largest commercial bank in Australia. NBOV assets total $46.1 billion, loans of $26 billion, and total deposits of $35.5 billion. It provides online, telephone, and traditional banking and investment services to both individuals and businesses in Australia. NBOV's mission is to create an exceptional customer experience internationally by providing solutions through leading technologies, offering a wide selection of financial products and services, and leveraging experience to meet customers' needs. Which of the following measures is least likely to be included in the financial perspective of NBOV's balanced scorecard?

A) Prime interest rate offered
B) Total loans outstanding
C) Profit margin
D) Total demand for deposits

Question 46

The perspectives in a balanced scorecard

A) Can be adapted to an individual organisation's priorities
B) Cannot be changed because of copyright restrictions
C) Include qualitative and quantitative
D) Are externally focused only in for-profit organisations

Question 47

Which of the following measures would be least likely to be included in a balanced scorecard's learning and growth perspective?

A) Number of patent applications for new products
B) Average training cost per employee
C) Percent of revenue from new products
D) Rank in customer surveys

Question 48

The perspectives in a typical balanced scorecard include all of the following except

A) Qualitative
B) Financial
C) Customer
D) Learning and growth

Question 49

Which of the following measures would be least likely to be included in a balanced scorecard's customer perspective?

A) Customer satisfaction rating
B) revenue growth by product line
C) Total operating income by product line
D) Percent of repeat sales

Question 50

Steps in the operations cycle of the value chain include

A) Identifying customer preferences
B) Designing products and services
C) Building products and services
D) Providing customer service

Question 51

National Bank of Victoria (NBOV) is the fourth largest commercial bank in Australia. NBOV assets total $46.1 billion, loans of $26 billion, and total deposits of $35.5 billion. It provides online, telephone, and traditional banking and investment services to both individuals and businesses in Australia. NBOV's mission is to create an exceptional customer experience internationally by providing solutions through leading technologies, offering a wide selection of financial products and services, and leveraging experience to meet customers' needs. "Percent change in dollars spent on information technology" is most likely used in which balanced scorecard perspective?

A) Information technology
B) Financial
C) Customer
D) Internal business process

Question 52

Steps in the post-sales service cycle of the value chain include

A) Identifying customer preferences
B) Designing products and services
C) Building products and services
D) Providing customer service

Question 53

The measures in a balanced scorecard are guided by

A) Vision and strategy
B) Budget plans
C) Shareholders
D) The board of directors

Question 54

Which of the following measures would be least likely to be included in a balanced scorecard's financial perspective?

A) Customer satisfaction rating
B) Percent of sales from return customers
C) Average revenue per customer
D) Increase in sales by geographic region

Question 55

Which of the measures below would be most likely to be found in the customer perspective of the balanced scorecard?

A) Change in market share
B) Training days per employee
C) Residual income
D) Percent capacity utilisation

Question 56

The balanced scorecard's perspectives

A) Are linked through careful managerial analysis
B) Are not linked in any meaningful way
C) Are a relatively unimportant part of the scorecard
D) Are exclusively focused on internal measures in not-for-profit organisations

Question 57

Steps in the innovation cycle of the value chain include

A) Delivering products and services
B) Designing products and services
C) Building products and services
D) Providing customer service

Question 58

Which of the following measures would be least likely to be included in a balanced scorecard's internal business process perspective?

A) Percent change in throughput time
B) Customer satisfaction rating
C) Percent capacity utilisation
D) Average waiting time per customer

Question 59

Which of the following measures would be most likely to be found in the financial perspective of the balanced scorecard?

A) Change in market share
B) Training days per employee
C) Residual income
D) Percent capacity utilisation

Question 60

The internal business process perspective in a balanced scorecard is often broken down into its value chain components. Those components include all of the following except the

A) Innovation cycle
B) Operations cycle
C) Post-sales service cycle
D) Budget cycle

Question 61

The steps for implementing a balanced scorecard

A) Are different in for-profit and not-for-profit organisations.
B) Should be customised for individual organisations.
C) Should not vary if the implementation is to be effective.
D) Begin with developing measures in each perspective.

Question 62

The first step in implementing a balanced scorecard is to clarify organisational vision, core competencies, and strategies. The strategies

A) Are the core competencies of the organisation
B) Are most effectively developed in a decentralised organisation
C) Provide guidance for achieving the vision
D) Should explicitly incorporate all core competencies

Question 63

The balanced scorecard implementation process begins with

A) Selecting an implementation team.
B) Developing measures for each perspective.
C) Hiring an outside consultant.
D) Clarifying organisational vision.

Question 64

Common biases associated with balanced scorecard projects include

A) I and II only
B) I and III only
C) II and III only
D) I, II, and III

Question 65

The balanced scorecard may be inappropriate for

A) Compensating employees
B) Motivating employees
C) Generating improved financial performance
D) Improving communication

Question 66

Weaknesses of the balanced scorecard include all of the following except

A) Expensive and time-consuming implementation
B) Inability to clarify vision and strategies
C) Lack of employee support
D) Doubt about links among the perspectives

Question 67

The first step in implementing a balanced scorecard is to clarify organisational vision, core competencies, and strategies. The vision

A) Provides an overall direction for the organisation
B) Is another name for the organisation's strengths and weaknesses
C) Provides an explicit plan for daily operations
D) Should explicitly incorporate all core competencies

Question 68

In terms of motivation, one of the balanced scorecard's strengths is

A) Improved financial performance
B) Aligning individual goals with organisational strategies
C) Convincing managers that the scorecard is more than a temporary fad
D) Having generally-defined objectives to increase motivation

Question 69

Following are some of the steps in implementing a balanced scorecard. Which one of these steps would be performed last?

A) Investigate variances and reward employees.
B) Collect and analyse scorecard data to monitor performance.
C) Clarify organisational vision and strategies.
D) Establish action plans.

Question 70

Each perspective of the balanced scorecard normally contains

A) A single, comprehensive measure to limit information overload
B) The same number of measures as the other perspectives
C) Four to seven performance measures
D) Either input measures or outcome measures, but not both

Question 71

National Bank of Victoria (NBOV) is the fourth largest commercial bank in Australia. NBOV assets total $46.1 billion, loans of $26 billion, and total deposits of $35.5 billion. It provides online, telephone, and traditional banking and investment services to both individuals and businesses in Australia. NBOV's mission is to create an exceptional customer experience internationally by providing solutions through leading technologies, offering a wide selection of financial products and services, and leveraging experience to meet customers' needs. All of the following measures could be included in a balanced scorecard for NBOV. Which is the most subjective?

A) Revenue growth
B) Employee turnover
C) Leadership competence
D) Quality improvement costs incurred

Question 72

Following are some of the steps in implementing a balanced scorecard. Which one of these steps would be performed before the others?

A) Collect and analyse scorecard data.
B) Communicate and refine measures.
C) Establish performance targets and action plans.
D) Develop performance measures and objectives.

Question 73

In which order should the following steps be taken in implementing a balanced scorecard? 1 Develop links among the objectives of the organisation, divisions, departments, and individuals.
2 Provide feedback to employees and others.
3 Establish action plans and specific performance targets

A) 1, 2, 3
B) 2, 1, 3
C) 3, 2, 1
D) 1, 3, 2

Question 74

Strengths of the balanced scorecard related to communication and linkages include

A) I and II only
B) I and III only
C) II and III only
D) I, II, and III

Question 75

National Bank of Victoria (NBOV) is the fourth largest commercial bank in Australia. NBOV assets total $46.1 billion, loans of $26 billion, and total deposits of $35.5 billion. It provides online, telephone, and traditional banking and investment services to both individuals and businesses in Australia. NBOV's mission is to create an exceptional customer experience internationally by providing solutions through leading technologies, offering a wide selection of financial products and services, and leveraging experience to meet customers' needs. NBOV could develop a balanced scorecard for

A) I, II, and III only
B) II, III, and IV only
C) I, II, and IV only
D) I, II, III, and IV

Question 76

One of the strengths of the balanced scorecard is its ability to provide guidance for improvements. Those improvements can be related to

A) I and II only
B) I and III only
C) II and III only
D) I, II, and III

Question 77

Which of the following is an implementation mistake related to the balanced scorecard?

A) Beginning by clarifying organisational vision
B) Linking objectives to strategies
C) Defining objectives in too general a manner
D) Integrating vision and strategies into operations in a more complete manner

Question 78

National Bank of Victoria (NBOV) is the fourth largest commercial bank in Australia. NBOV assets total $46.1 billion, loans of $26 billion, and total deposits of $35.5 billion. It provides online, telephone, and traditional banking and investment services to both individuals and businesses in Australia. NBOV's mission is to create an exceptional customer experience internationally by providing solutions through leading technologies, offering a wide selection of financial products and services, and leveraging experience to meet customers' needs. Internal business process measures on NBOV's balanced scorecard would likely include

A) I and II only
B) I and III only
C) II and III only
D) I, II, and III

Question 79

Balanced scorecard projects can motivate I Employee effort
II Achievement of organisational strategies
III Managers to ignore biases and uncertainties

A) I and III only
B) II and III only
C) I and II only
D) I, II, and III

Question 80

Strengths of the balanced scorecard can typically be summarised in three groups. Which of the following is not one of them?

A) Communication and linkages
B) Guidance for improvements
C) Motivation
D) Cost