The balanced scorecard includes both leading and lagging indicators.Which of the following correctly places each indicator on the spectrum of most leading to most lagging?
A)Financial → Customer → Internal business process → Learning and growth
B)Financial → Learning and growth → Internal business process → Customer
C)Customer → Learning and growth → Internal business process → Financial
D)Learning and growth → Internal business process → Customer → Financial

Question

Quizplus · Accepted Answer

The learning and growth perspective focuses on the development of the organization's employees, systems, and processes, making it the most leading indicator. The internal business process perspective measures the efficiency and effectiveness of the organization's operations, making it a slightly lagging indicator. The customer perspective measures how well the organization is meeting the needs and expectations of its customers, making it a more lagging indicator. Finally, the financial perspective reflects the results of the organization's activities and is the most lagging indicator. Therefore, the correct order is learning and growth → internal business process → customer → financial, which is only found in choice D.

The Balanced Scorecard Includes Both Leading and Lagging Indicators