Question 1

In the opening vignette for the chapter we are told that McDonald's reported its first-ever quarterly loss in January, 2003.

Accepted Answer

In January 2003, McDonald's reported its first-ever quarterly loss due to factors like increased competition and operational challenges.

Question 2

"Creating a single company currency," one of the five keys to successful implementation control, refers to the idea that everyone with an acceptable level of performance or better should receive equal merit raises.

Accepted Answer

"Creating a single company currency" refers to standardizing metrics or criteria for evaluating performance across the organization, not about equal merit raises.

Question 3

If a company is using a differentiation approach, solely capturing information about efforts to reduce costs will be unproductive in allowing top management to assess whether progress is being made toward the company's important goals.

Accepted Answer

A differentiation approach focuses on creating unique value through features, quality, or service, not just cost reduction. Therefore, solely focusing on cost reduction does not align with assessing progress in differentiation strategies.

Question 4

Qualitative metrics are measures of success that are descriptive and relative rather than point-specific.

Accepted Answer

Qualitative metrics focus on subjective assessment and descriptions, capturing the quality of an outcome rather than quantifiable data.

Question 5

Quantitative metrics may be numerically based or they may include things like descriptive statements made by customers.

Accepted Answer

Quantitative metrics are strictly numerical and involve measurable data, while descriptive statements are qualitative data.

Question 6

The range or variation in a quantitative metric is a better and more powerful indicator of performance improvement than the average.

Accepted Answer

The range or variation in a quantitative metric is a better and more powerful indicator of performance improvement than the average because it takes into account the spread of the data. The average can be misleading if the data is skewed, as it can be pulled in one direction by a few extreme values. The range, on the other hand, is not affected by outliers and provides a more accurate picture of the overall performance.

Question 7

Perceptual measures of performance should not be used since they only indicate how a customer or supplier feels about a company's products or processes.

Accepted Answer

Perceptual measures of performance are valuable as they provide insights into customer satisfaction and perceptions, which can influence purchasing decisions and brand loyalty.

Question 8

When metrics are translated to the functional level to be effective they should be connected to incentives.

Accepted Answer

Metrics connected to incentives can motivate employees to achieve specific goals, aligning their efforts with organizational objectives.

Question 9

The metrics created for each employee or level must be related to activities that are under the control of that employee or level.

Accepted Answer

Metrics should be relevant and within the control of the employee or level to ensure they can effectively influence outcomes and performance.

Question 10

Causal logic is a concept that refers to the assessment that a manager makes about the reasons that things work the way they do.

Accepted Answer

Causal logic involves understanding the cause-and-effect relationships that explain why certain outcomes occur, which is often part of a manager's assessment process.

Question 11

Stretch metrics are measures that are perceived by employees to be flexible and subject to change should targets not be met.

Accepted Answer

Stretch metrics are challenging goals set to push employees beyond their current capabilities, not perceived as flexible or subject to change.

Question 12

The central notion of the balanced scorecard is that financial measures of performance are the result of a variety of activities in which people engage and not the cause.

Accepted Answer

The balanced scorecard emphasizes that financial outcomes are lagging indicators and result from various activities in areas like customer satisfaction, internal processes, and learning and growth, which are leading indicators.

Question 13

The balanced scorecard model considers only the most important stakeholder - shareholders - in its definition of company performance.

Accepted Answer

The balanced scorecard model considers multiple perspectives, including financial, customer, internal processes, and learning and growth, not just shareholders.

Question 14

A lag metric represents results that the company would expect to observe for each of the subdimensions in any one perspective of a balanced scorecard.

Accepted Answer

A lag metric is an outcome measure that reflects the results of past actions, which aligns with the concept of measuring results in the balanced scorecard's perspectives.

Question 15

A lead metric, in the context of the balanced scorecard model, represents the observable actions of employees that the firm hopes will lead to the results it is ultimately trying to achieve.

Accepted Answer

Lead metrics are predictive measures that indicate future performance and are used to influence desired outcomes in the balanced scorecard model.

Question 16

In the value-driver-action model of implementation key value drivers are behaviors linked to the primary activities of the value chain but not behaviors that might be considered linked to support activities.

Accepted Answer

The value-driver-action model includes behaviors linked to both primary and support activities of the value chain, as both are essential for creating value.

Question 17

The second step in the value-driver-action implementation process requires managers to articulate desired statements from the point of view of stakeholders, such as "I'm really attracted by the look of the new BMWs."

Accepted Answer

The second step in the value-driver-action implementation process requires managers to articulate desired statements from the point of view of stakeholders, such as "I'm really attracted by the look of the new BMWs."

Question 18

The final step in the value-driver-action implementation process is to ask every employee to state how his or her contributions have made the company better over the prior year.

Accepted Answer

The final step in the value-driver-action implementation process typically involves evaluating the outcomes and making necessary adjustments, not asking employees to state their contributions.

Question 19

Strategists using the McKinsey 7-S implementation framework identify strategy, structure, and systems as "soft" S's.

Accepted Answer

In the McKinsey 7-S framework, strategy, structure, and systems are considered "hard" elements, while style, staff, skills, and shared values are the "soft" elements.

Question 20

"Style" in the McKinsey 7-S framework refers to the symbolic behavior of the organization, and includes things like the company's dress code and the way employees treat each other.

Accepted Answer

The "Style" in the McKinsey 7-S framework refers to the organizational culture, including symbolic behaviors, norms, and how employees interact, which can encompass dress code and interpersonal treatment.

Quiz 12: Strategy Implementation: Control and Performance

In the opening vignette for the chapter we are told that McDonald's reported its first-ever quarterly loss in January, 2003.

"Creating a single company currency," one of the five keys to successful implementation control, refers to the idea that everyone with an acceptable level of performance or better should receive equal merit raises.

If a company is using a differentiation approach, solely capturing information about efforts to reduce costs will be unproductive in allowing top management to assess whether progress is being made toward the company's important goals.

Qualitative metrics are measures of success that are descriptive and relative rather than point-specific.

Quantitative metrics may be numerically based or they may include things like descriptive statements made by customers.

The range or variation in a quantitative metric is a better and more powerful indicator of performance improvement than the average.

Perceptual measures of performance should not be used since they only indicate how a customer or supplier feels about a company's products or processes.

When metrics are translated to the functional level to be effective they should be connected to incentives.

The metrics created for each employee or level must be related to activities that are under the control of that employee or level.

Causal logic is a concept that refers to the assessment that a manager makes about the reasons that things work the way they do.

Stretch metrics are measures that are perceived by employees to be flexible and subject to change should targets not be met.

The central notion of the balanced scorecard is that financial measures of performance are the result of a variety of activities in which people engage and not the cause.

The balanced scorecard model considers only the most important stakeholder - shareholders - in its definition of company performance.

A lag metric represents results that the company would expect to observe for each of the subdimensions in any one perspective of a balanced scorecard.

A lead metric, in the context of the balanced scorecard model, represents the observable actions of employees that the firm hopes will lead to the results it is ultimately trying to achieve.

In the value-driver-action model of implementation key value drivers are behaviors linked to the primary activities of the value chain but not behaviors that might be considered linked to support activities.

The second step in the value-driver-action implementation process requires managers to articulate desired statements from the point of view of stakeholders, such as "I'm really attracted by the look of the new BMWs."

The final step in the value-driver-action implementation process is to ask every employee to state how his or her contributions have made the company better over the prior year.

Strategists using the McKinsey 7-S implementation framework identify strategy, structure, and systems as "soft" S's.

"Style" in the McKinsey 7-S framework refers to the symbolic behavior of the organization, and includes things like the company's dress code and the way employees treat each other.