Question 1

Alexander and Kristin are reviewing the statistical analysis for the performance metrics at their company, SafeChild Toys. Unfortunately, there is a lack of evidence that automating the warehouse has led to better inventory controls thereby providing better customer service. Alexander and Kristin should

Accepted Answer

Reviewing the performance metrics to ensure they accurately measure the strategic objectives is a prudent step. It allows for understanding whether the metrics used are appropriate and effectively aligned with the company's goals, rather than hastily revising strategic objectives or implementing drastic measures without thorough analysis.

Question 2

Alexander and Kristin are executive managers at Safety First Fall Safety Equipment Co. They realize that within the last several quarters, they have been treating the performance metrics from the company's two very distinct divisions the same rather than focusing on the unique aspects of each division. They have inaccurately assessed divisional performance as a result. Alexander and Kristin realize they have fallen prey to a cognitive bias known as

Accepted Answer

Common measures bias occurs when decision-makers inappropriately apply the same metrics or standards across different contexts or situations, failing to account for unique aspects or differences. In this scenario, Alexander and Kristin incorrectly used the same performance metrics for two distinct divisions, ignoring their unique characteristics.

Question 3

Metrics that are later in the value chain are normally considered to be _____ indicators.

Accepted Answer

Metrics that are later in the value chain are considered to be lagging indicators because they measure outcomes of past actions rather than predicting future performance.

Question 4

Alexander and Kristin are executive managers at Safety First Fall Safety Equipment Co. They decide to discontinue gathering data and calculating performance metrics within their organization because the company's balanced scorecard performance metrics have produced several quarters in a row of good news. They assume the positive results will continue. Alexander and Kristin have made this decision as a result of a cognitive bias known as

Accepted Answer

Motivated reasoning is a cognitive bias that occurs when people seek out information that confirms their existing beliefs and ignore information that contradicts them. In this case, Alexander and Kristin are assuming that the positive results will continue because they have produced several quarters in a row of good news. They are ignoring the possibility that the results could change in the future.

Question 5

Performance targets

Accepted Answer

Performance targets provide goals for employees to achieve, helping guide their efforts and measure success.

Question 6

Ken and Laura are working toward implementing a balanced scorecard for their company. They ask their production and warehouse teams to provide several options regarding strategic initiatives for the internal processes perspective of the balanced scorecard. Which of the following suggestions made by the employees would be a good choice of a strategic initiative for this purpose?

Accepted Answer

Automating the warehouse directly relates to improving internal processes by enhancing efficiency and reducing manual errors, aligning well with the internal processes perspective of the balanced scorecard.

Question 7

Which of the following is not a correct example of a performance target?

Accepted Answer

Performance targets are specific goals related to the productivity, efficiency, or quality improvements within an organization. Options A, B, and C are examples of quantifiable and time-bound objectives that can be measured and directly relate to performance improvements. Option D, however, refers to including a component in the balanced scorecard, which is a strategic planning and management system used to align business activities to the vision and strategy of the organization, rather than a specific performance target.

Question 8

Which of the following statements regarding strategic objectives in the balanced scorecard is false?

Accepted Answer

Strategic objectives are more specific and actionable than a company's overall mission statement, which tends to be broader and more visionary. Strategic objectives are meant to operationalize the mission statement into achievable goals.

Question 9

A measure map is an important aspect of the balanced scorecard performance measurement system. Which of the following describes the role of the measure map?

Accepted Answer

The measure map in a balanced scorecard system illustrates the expected relationships among the performance metrics, helping to align them with strategic objectives.

Question 10

The expected relationships among performance metrics in the measure map are based on

Accepted Answer

The expected relationships among performance metrics in the measure map are based on the strategy map links strategic objectives, which outline how various goals and initiatives interconnect to achieve the overall strategy.

Question 11

Juana and Carl are implementing a balanced scorecard for their company, DoItRight Manufacturing. They are considering various performance metrics for assessing progress toward strategic objectives. Which of the following would be a good choice of performance metric for the strategic objective listed?

Accepted Answer

The number of repeat customers directly reflects customer satisfaction and loyalty, which are key indicators of how delighted customers are with the company's products or services. This makes it a suitable performance metric for the strategic objective of delighting the customer.

Question 12

Which of the following statements about performance targets is true?

Accepted Answer

Performance targets are specific goals or objectives set for performance metrics, indicating the level of performance or improvement an organization aims to achieve.

Question 13

Metrics that are early in the value chain are normally considered to be _____ indicators.

Accepted Answer

Leading indicators are metrics that precede an event or trend, providing a forecast of what might happen. Metrics early in the value chain are considered leading because they can predict future performance or outcomes.

Question 14

Strategic learning results

Accepted Answer

Strategic learning involves not only verifying strategic objective expectations but also adjusting them when expected relationships are not supported by statistical analysis, ensuring continuous improvement and adaptation.

Question 15

Alexander and Kristin are executive managers at Safety First Fall Safety Equipment Co. They realize that within the last several quarters, they have been heavily focused on the online customer satisfaction rating as though it is the strategic objective rather than focusing on the customers as the company's real goal. Alexander and Kristin realize they have fallen prey to a cognitive bias known as

Accepted Answer

Surrogation is the cognitive bias where a measure for a concept becomes the concept itself. In this case, Alexander and Kristin mistook the measure of online customer satisfaction ratings as the ultimate goal, rather than focusing on the actual goal of serving the customers well.

Question 16

An important consideration in establishing a measure map includes determining the

Accepted Answer

Leading and lagging indicators are crucial for measure maps as they help in understanding both the drivers of future performance (leading) and the outcomes of past actions (lagging), providing a comprehensive view of performance.

Question 17

A strategy map plays an important role for a company using the balanced scorecard approach to its performance measurement system. Which of the following is not a function of the strategy map?

Accepted Answer

A strategy map does not limit its causal relationships to only the financial and internal processes perspectives; it encompasses all perspectives of the balanced scorecard, including financial, customer, internal processes, and learning and growth, showing how they interrelate.

Question 18

Which of the following statements about performance metrics is false?

Accepted Answer

Performance metrics are typically required for all strategic objectives, not just 80% of them, to ensure comprehensive evaluation and monitoring of an organization's performance in achieving its goals.

Question 19

The balanced scorecard elements are linked together by a

Accepted Answer

A strategy map is a visual tool that links balanced scorecard elements together, illustrating how they connect and influence one another to achieve strategic objectives.

Question 20

Juana and Carl are reviewing their company's balanced scorecard strategic objectives when they discover a problem. Which of the following is not a correct matching of a strategic objective to its performance perspective in their company's BSC?

Accepted Answer

Reducing shipping errors is more aligned with the internal processes perspective as it focuses on improving operational efficiencies and effectiveness, rather than directly impacting financial metrics.

Quiz 28: The Balanced Scorecard and Corporate Social Responsibility