Question 1

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

Accepted Answer

A balanced scorecard helps organisations to align their objectives with their overall vision and strategies by identifying key performance areas and establishing targets that can be tracked and evaluated over time. This enables a more systematic approach to performance management and supports decision-making and resource allocation based on concrete data and insights.

Question 2

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

Accepted Answer

The internal business process perspective focuses on the critical operations and processes required to achieve the organization's goals, rather than primarily on employees.

Question 3

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

Accepted Answer

Managers should not focus on finding the "one best measure" of performance as different responsibility centers may have different performance indicators. Instead, they should focus on identifying a set of measures that can evaluate the overall performance of the responsibility center.

Question 4

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

Accepted Answer

The implementation of balanced scorecard can be time-consuming and costly due to the need for data collection, analysis, and alignment of organizational strategy.

Question 5

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

Accepted Answer

This is true. A balanced scorecard typically includes these four perspectives.

Question 6

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

Accepted Answer

The strategies of an organization will determine the goals and objectives that managers establish to achieve those strategies. For example, if an organization's strategy is to focus on cost minimization, then managers may establish performance objectives related to reducing manufacturing or operational costs. If the strategy is to provide superior customer service, objectives may be set to improve customer satisfaction ratings or reduce response times to customer inquiries. Therefore, the nature of an organization's strategies has a direct impact on the performance objectives established by managers.

Question 7

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

Accepted Answer

This is because some employees may view balanced scorecard initiatives as just another management trend that will eventually fade away. They may not fully understand the purpose and benefits of implementing a balanced scorecard system in the organization. It is up to leaders and managers to communicate the importance and long-term nature of these initiatives to gain employee buy-in and support.

Question 8

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

Accepted Answer

Clarifying organizational vision and core competencies is an important part of strategic decision making as it helps the organization align its goals and resources towards achieving long-term success.

Question 9

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

Accepted Answer

The answer of The basis of a balanced scorecard is...

Question 10

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

Accepted Answer

The answer of The balanced scorecard's financial perspective is focused...

Question 11

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

Accepted Answer

The balanced scorecard is a strategic management tool that helps organizations to align their goals and objectives with their vision and strategy. It provides a balanced view of an organization's performance by linking short-term and long-term objectives to the overall vision and strategy. Therefore, the given statement is true.

Question 12

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

Accepted Answer

Non-financial measures, such as customer satisfaction and employee morale, can be just as valuable as financial measures in assessing and improving performance. While they may be more subjective than financial measures, they can still provide valuable insight and complement financial measures in setting goals and evaluating success.

Question 13

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

Accepted Answer

In implementing a balanced scorecard, managers should establish performance targets before collecting and analyzing the first set of scorecard data, as these targets guide performance expectations and improvement efforts from the outset.

Question 14

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

Accepted Answer

Core competencies are defined as unique capabilities that provide a competitive advantage to an organisation. These can include things like superior technology, specialized know-how, strong brand recognition, and efficient processes. Productivity, reputation, and regulatory advantages are all examples of core competencies that an organisation might possess.

Question 15

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

Accepted Answer

Stakeholders are individuals or groups with an interest in the activities and outcomes of a business, and they can play an important role in the strategic decision-making process. Key stakeholders include suppliers, customers, and the community, as their actions and reactions can significantly impact the success or failure of a strategic initiative.

Question 16

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

Accepted Answer

Upper-level employees are key players in executing the plans and achieving the objectives of an organization. Therefore, it is necessary to communicate the vision, strategies, goals, and objectives to them to ensure everyone is aligned towards a common goal.

Question 17

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

Accepted Answer

The first step in implementing a balanced scorecard is clarifying and translating the vision and strategy, not developing measures for each of the perspectives.

Question 18

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

Accepted Answer

Learning and growth measures in a balanced scorecard can focus on employee training, development, and satisfaction to improve overall organizational performance.

Question 19

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

Accepted Answer

While financial measures can provide objective data, they do not capture all aspects of organizational performance such as customer satisfaction, employee engagement, and social responsibility. Non-financial measures are important for providing a more comprehensive view of a company's performance.

Question 20

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

Accepted Answer

The choice of balanced scorecard measures should be reviewed regularly to ensure continued relevance and effectiveness in measuring progress towards strategic goals. If necessary, measures may need to be adjusted or replaced to better reflect changing priorities and circumstances.

Quiz 18: The Balanced Scorecard and Strategy Maps