Question 1

One advantage of nonfinancial measures is that managers directly involved in operations are likely to understand them.

Accepted Answer

Nonfinancial measures are often more directly related to the day-to-day operations and processes, making them easier for managers involved in those operations to understand and act upon.

Question 2

A balanced scorecard uses only nonfinancial measures to determine how well the organization is doing in view of competing stakeholder concerns.

Accepted Answer

A balanced scorecard uses both financial and nonfinancial measures to evaluate organizational performance from multiple perspectives, including financial, customer, internal processes, and learning and growth.

Question 3

Partial productivity is the ratio of the value of output to the value of all key inputs.

Accepted Answer

Partial productivity measures the ratio of output to a single input, not all key inputs.

Question 4

Continuous improvement involves the search for and implementation of the best way to do something as practiced by other organizations or in other parts of one's own organization.

Accepted Answer

The answer of Continuous improvement involves the search for and...

Question 5

Manufacturing cycle time is the total time involved in processing, moving, storing, and inspecting a good or providing a service.

Accepted Answer

Manufacturing cycle time includes all the time spent in processing, moving, storing, and inspecting a product or service, encompassing the entire production process.

Question 6

The primary objective of benchmarking is to evaluate performance of an activity, operation, or organization relative to the performance by other companies.

Accepted Answer

Benchmarking involves comparing one's business processes and performance metrics to industry bests or best practices from other companies to identify areas for improvement.

Question 7

The number of defective units is an example of a subjective performance measure.

Accepted Answer

The number of defective units is an objective performance measure because it is quantifiable and based on factual data.

Question 8

In general, all managers in a given organization are responsible for the same things and should be evaluated using the same financial and nonfinancial measures.

Accepted Answer

Managers in different roles and departments have varying responsibilities and objectives, requiring tailored evaluation metrics that align with their specific functions and goals.

Question 9

At the middle levels in the organization, control and performance measurement focus on how people carry out the daily activities that create the organization's products.

Accepted Answer

The answer of At the middle levels in the organization,...

Question 10

Improving the efficiency of the manufacturing cycle involves decreasing the time spent processing a good.

Accepted Answer

The answer of Improving the efficiency of the manufacturing cycle...

Question 11

A balanced scorecard is basically a balance sheet prepared using nonfinancial measures.

Accepted Answer

A balanced scorecard is a strategic management tool that includes financial and nonfinancial measures to provide a more comprehensive view of organizational performance.

Question 12

One reason financial measures are used to evaluate performance is that they are easily quantifiable.

Accepted Answer

Financial measures are numerical and can be easily calculated and compared, making them straightforward to quantify and analyze.

Question 13

A business model is a description of how different levels and employees in the organization must perform for the organization to achieve its goals and objectives.

Accepted Answer

A business model outlines the roles and responsibilities of different levels and employees within an organization, ensuring that their actions align with the organization's goals and objectives.

Question 14

One of the important guidelines of benchmarking is to not benchmark everything at the best-in-the-business level; no organization can be the best at everything.

Accepted Answer

Benchmarking everything at the best-in-the-business level is impractical and unsustainable, as it is important to focus on areas that align with an organization's strategic goals and capabilities.

Question 15

In general, the use of multiple measures to evaluate performance is better than the use of a single performance measure.

Accepted Answer

Using multiple measures provides a more comprehensive and balanced view of performance, capturing different aspects and reducing the risk of bias or error associated with relying on a single measure.

Question 16

At the upper level of the organization, performance measurement focuses on whether the organization is meeting its responsibilities and performing well from the stakeholders' perspective.

Accepted Answer

Performance measurement at the upper level of an organization typically involves evaluating how well the organization is fulfilling its responsibilities and achieving its goals, as perceived by stakeholders such as investors, customers, and employees.

Question 17

One disadvantage of using nonfinancial measures to evaluate performance is that they are only available on a monthly, quarterly, or annual basis.

Accepted Answer

Nonfinancial measures can often be collected and analyzed more frequently than financial measures, sometimes even in real-time, allowing for more immediate insights into performance.

Question 18

The concept of a balanced scorecard is to measure how well the organization is doing from the view of employees, suppliers, customers, business partners, and the community, as well as the shareholders.

Accepted Answer

The balanced scorecard is a strategic management tool that evaluates organizational performance from multiple perspectives, including financial, customer, internal processes, and learning and growth, which can encompass views from various stakeholders.

Question 19

In general, performance measures-financial and nonfinancial-should relate to what managers at different levels control.

Accepted Answer

Performance measures should align with the responsibilities and control of managers to ensure accountability and effective decision-making.

Question 20

One question that an organization's mission statement should answer is how the organization will evaluate its performance relative to its competitors.

Accepted Answer

A mission statement typically outlines the organization's purpose, values, and primary objectives, but it does not usually specify how performance will be evaluated relative to competitors.

Quiz 18: Performance Measurement to Support Business Strategy