Question 1

Which of the following statements is/are true?

Accepted Answer

Non-financial measures can indeed reflect drivers of future financial performance as they often include metrics related to customer satisfaction, employee engagement, and innovation, which can influence future financial outcomes.

Question 2

Performance measures,which include cost,product quality and manufacture cycle time,are related to:

Accepted Answer

Cost and manufacturing cycle time are indicators of efficient internal business processes, while product quality is a reflection of effective internal business processes, as well as meeting customer needs. Therefore, performance measures are related to the internal business processes perspective.

Question 3

Employee satisfaction,absenteeism and employee suggestions implemented are measures related to:

Accepted Answer

These measures are related to the learning and growth perspective of the Balanced Scorecard, which focuses on employee training, development, and corporate cultural attitudes related to both individual and corporate self-improvement.

Question 4

Which of the following statements is/are false?
i.Non-financial measures are only applicable when profit is not a principle goal of the firm
ii.It is often difficult to take any action because of non-financial measures.
iii.At the operational level,it is often easier to relate to non-financial measures.

Accepted Answer

Statement i is false because non-financial measures can be used even if profit is a principle goal of the firm. Statement ii is true in some cases but not always, and statement iii is generally true as non-financial measures at the operational level can be more concrete and easier to understand for employees. Therefore, only statement i is false.

Question 5

Which of the following are used by most successful organisations when evaluating performance?
Financial performance measures
Non-financial performance measures

Accepted Answer

Most successful organizations use both financial and non-financial performance measures when evaluating performance. While financial measures such as revenue, profit, and return on investment are important, non-financial measures such as customer satisfaction, employee engagement, and innovation are also crucial indicators of overall performance. Using a combination of both types of measures provides a more comprehensive understanding of the organization's strengths and areas for improvement.

Question 6

Market share may be a lead indicator from:

Accepted Answer

The answer of Market share may be a lead indicator...

Question 7

Which of the following do conventional measurement systems include?
i.Profitability
ii.Return on investment
iii.Cost variance analysis
iv.Budget variance analysis

Accepted Answer

Conventional measurement systems typically include profitability, return on investment, cost variance analysis, and budget variance analysis as they are standard financial metrics used to assess business performance.

Question 8

Measures that monitor the factors that drive outcomes are called:

Accepted Answer

Lead indicators are measures that track the factors that drive outcomes, helping to predict future performance. They are proactive and can be used to identify potential issues before they occur. Lag indicators, on the other hand, track the results or outcomes that have already occurred and provide retrospective information that cannot be acted upon. Benchmark indicators compare performance to a standard or best practice, while cause and effect indicators track the relationship between an input (cause) and output (effect).

Question 9

The number of products returned by customers,the number of product defects and on-time delivery are measures related to:

Accepted Answer

The number of products returned by customers, the number of product defects, and on-time delivery are all measures related to customer perspective. This perspective focuses on meeting or exceeding customer expectations and ensuring customer satisfaction.

Question 10

The purposes of performance measurement are to:
i.communicate company strategies to employees
ii.identify problem areas
iii.act as a guide to future strategies
iv.identify key performance indicators

Accepted Answer

The answer of The purposes of performance measurement are to:
i.communicate...

Question 11

An increasingly popular approach that integrates financial and customer performance measures with measures in the areas of internal operations and innovation is known as:

Accepted Answer

The description matches the concept of the balanced scorecard, which involves the integration of financial, customer, internal operations, and innovation measures to provide a comprehensive view of organizational performance. The other options (integrated performance measurement tool, integrated efficiency, benchmarking) do not specifically refer to this approach.

Question 12

Which of the following statements are problems associated with conventional performance measures?
i.They may encourage short-term financial performance
ii.They describe results not causes.
iii.They do not emphasise areas that need development for long-term goal achievement.

Accepted Answer

Conventional performance measures often focus on short-term financial results, fail to identify underlying causes of performance, and do not highlight areas needing development for long-term success.

Question 13

On which of the following is the Kaplan and Norton framework for developing a balanced scorecard is based?
i.Financial perspective
ii.Customer perspective
iii.Learning and growth
iv.Internal processes

Accepted Answer

The Kaplan and Norton framework for developing a balanced scorecard is based on all four perspectives, including financial perspective, customer perspective, learning and growth, and internal processes. Therefore, all of the given answers are correct.

Question 14

All the following are methods of comparison used in performance measurement.Which are inadequate as contemporary measures?
i.Standard costs
ii.Past periods
iii.Budget targets
iv.Benchmarks

Accepted Answer

All the methods listed in options i, ii, iii, and iv are commonly used in performance measurement. None of them are inadequate as contemporary measures. Therefore, option D is the correct answer.

Question 15

Southern Cruises Ltd,which operates in a very competitive marketplace,is considering four categories of performance measures: (i)profitability (ii)customer satisfaction (iii)efficiency and quality and (iv)innovation.The company assigns one manager to each ship in its fleet to oversee the ship's general operations.If Southern Cruises Ltd desired to adopt a balanced scorecard approach,which measures should it use in the evaluation of managers?

Accepted Answer

To adopt a balanced scorecard approach, Southern Cruises Ltd should use all performance measures, i.e. profitability, customer satisfaction, efficiency and quality and innovation, in the evaluation of managers. This would ensure that managers are not only focused on financial results but also on improving customer satisfaction, efficiency, quality and innovative initiatives for the company's long-term growth and success.

Question 16

Which of the following statements is/are false?

Accepted Answer

The answer of Which of the following statements is/are false?
...

Question 17

Performance measures,including shareholder value,residual value and cash flow are related to:

Accepted Answer

Performance measures such as shareholder value, residual value, and cash flow are all related to the financial perspective, which focuses on improving financial outcomes for shareholders and stakeholders.

Question 18

Measures that monitor the progress towards the organisation's goals are called:

Accepted Answer

Lag indicators are used to measure progress towards an organization's goals by examining the results achieved after an activity is completed. They provide insight into whether or not the organization is meeting its stated objectives. Lead indicators, on the other hand, anticipate progress towards a goal and are used to help organizations identify potential problems before they occur. Benchmark indicators are used to compare an organization's performance with that of other similar organizations, while progress indicators measure how well an organization is doing at achieving its goals over time. Therefore, lag indicators are the best choice because they directly monitor progress towards the organization's goals.

Question 19

Which of the following are performance measures of delivery at the shop floor level?
i.Standard cost variances
ii.Accident reports
iii.Schedule adherence
iv.Number of good units completed

Accepted Answer

Schedule adherence and the number of good units completed are direct measures of performance related to delivery on the shop floor, focusing on meeting production schedules and ensuring product quality.

Question 20

Which of the following are likely to be the result of concentration on short-term financial measures?
i.Reduced expenditure on product development
ii.Increased spending on new technology
iii.Increased employee training
iv.Reduced marketing effort

Accepted Answer

Concentration on short-term financial measures is likely to result in reduced expenditure on product development and reduced marketing effort. Employees are less likely to receive training since it's an investment in the future, which wouldn't be beneficial in the short term. However, spending on new technology could show immediate results, but it's not likely to be a priority if the focus is on short-term financial measures.

Quiz 14: Strategic Performance Measurement Systems

Which of the following statements is/are true?

Performance measures,which include cost,product quality and manufacture cycle time,are related to:

Employee satisfaction,absenteeism and employee suggestions implemented are measures related to:

Which of the following are used by most successful organisations when evaluating performance? Financial performance measures Non-financial performance measures

Market share may be a lead indicator from:

Which of the following do conventional measurement systems include? i.Profitability ii.Return on investment iii.Cost variance analysis iv.Budget variance analysis

Measures that monitor the factors that drive outcomes are called:

The number of products returned by customers,the number of product defects and on-time delivery are measures related to:

The purposes of performance measurement are to: i.communicate company strategies to employees ii.identify problem areas iii.act as a guide to future strategies iv.identify key performance indicators

An increasingly popular approach that integrates financial and customer performance measures with measures in the areas of internal operations and innovation is known as:

Which of the following statements are problems associated with conventional performance measures? i.They may encourage short-term financial performance ii.They describe results not causes. iii.They do not emphasise areas that need development for long-term goal achievement.

On which of the following is the Kaplan and Norton framework for developing a balanced scorecard is based? i.Financial perspective ii.Customer perspective iii.Learning and growth iv.Internal processes

All the following are methods of comparison used in performance measurement.Which are inadequate as contemporary measures? i.Standard costs ii.Past periods iii.Budget targets iv.Benchmarks

Which of the following statements is/are false?

Performance measures,including shareholder value,residual value and cash flow are related to:

Measures that monitor the progress towards the organisation's goals are called:

Which of the following are performance measures of delivery at the shop floor level? i.Standard cost variances ii.Accident reports iii.Schedule adherence iv.Number of good units completed

Which of the following are likely to be the result of concentration on short-term financial measures? i.Reduced expenditure on product development ii.Increased spending on new technology iii.Increased employee training iv.Reduced marketing effort