Question 1

The triple bottom line process involves the measurement of profits,costs and environment.

Accepted Answer

The triple bottom line process involves the measurement of profits, social responsibility, and environmental sustainability, not costs.

Question 2

Explain the differences between the 'shareholder and stakeholder value approaches' to measuring strategic performance.

Accepted Answer

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Question 3

Market share,innovation and growth are examples of long-term development measures.

Accepted Answer

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Question 4

Since intangibles such as customer satisfaction cannot be measured,they are not important in assessing performance.

Accepted Answer

Intangibles such as customer satisfaction are important in assessing performance, even though they cannot be measured using traditional metrics. There are methods to measure customer satisfaction, such as surveys or feedback, and it is important for businesses to consider and improve upon customer satisfaction in order to maintain and grow their customer base.

Question 5

A friend of yours is considering the development of KPIs for his company.He asks you,'How many KPIs should there be at the business unit/functional unit/individual levels?' What would you tell him?

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Question 6

Accounting-based information is historical and may not be a good guide to future performance.

Accepted Answer

Accounting-based information reflects past events and transactions, therefore it may not necessarily predict future performance. Other factors, such as changes in the economic environment or company strategy, can impact future performance.

Question 7

The shareholder value approach sees the question of investing as a capital budgeting decision.

Accepted Answer

The shareholder value approach is primarily concerned with maximizing the value of the company for its shareholders. This involves evaluating potential investments based on their potential to generate returns and increase the company's value over time, which is similar to the process of capital budgeting. Therefore, the statement is true.

Question 8

The 'performance measurement cube' extends the balanced scorecard approach.

Accepted Answer

The performance measurement cube is a three-dimensional approach to performance measurement that extends the balanced scorecard approach. It takes into account three key dimensions: customers, processes, and financials, and provides a more comprehensive picture of organizational performance.

Question 9

You are working with your roommate on a group project about the types of indicators to include as measures for social and community performance in a sustainability report.What would you contribute to the discussion?

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Question 10

The balanced scorecard as a business tool for performance assessment is often difficult to implement in organisations.' Comment.

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Question 11

What conditions limit performance comparisons with the world's best practice? Explain.

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Question 12

The 'performance measurement cube' was initially developed by Nolan Nortan of KPMG management consultants.

Accepted Answer

The 'performance measurement cube', also known as the 'multidimensional performance measurement model' or 'performance prism', was not developed by Nolan Norton of KPMG but by Andy Neely, Chris Adams, and Mike Kennerley.

Question 13

The studies of 'successful' organisations conclude that financial success is essential for successful organisations.

Accepted Answer

Many studies and theories, such as the Resource-Based View and the Stakeholder Theory, suggest that financial success, including profitability, revenue growth, and return on investment, is a critical aspect of successful organizations. While financial performance is not the only factor that determines success, it is generally considered a necessary condition for achieving other goals, such as customer satisfaction, employee well-being, social and environmental responsibility, and innovation. Without sustainable financial performance, organizations may struggle to survive, let alone thrive, in a competitive and dynamic marketplace.

Question 14

Once performance measures have been developed and actual performance is determined,discuss the possible standards of comparison.

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Question 15

What are some of the common problems when assessing and communicating performance information?

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Question 16

The balanced scorecard approach rejects the importance of the shareholder value approach.

Accepted Answer

The balanced scorecard approach does not reject the importance of the shareholder value approach. Rather, it seeks to balance financial metrics, such as shareholder value, with other non-financial metrics, such as customer satisfaction, employee engagement, and internal processes, to provide a more comprehensive view of organizational performance.

Question 17

The 'total shareholder return' approach is more stable in an absolute sense on an annual basis.

Accepted Answer

Total shareholder return can be highly volatile on an annual basis as it depends on stock price movements and dividend payments, both of which can fluctuate significantly from year to year.

Quiz 5: Measuring Strategic Organisation Performance