Question 1

Nonfinancial measures are typically not objective enough to serve as effective performance measures.

Accepted Answer

Nonfinancial measures can be just as effective as financial measures in measuring performance, even though they may not be as objective. Nonfinancial measures can provide insights into areas such as customer satisfaction, employee engagement, and quality control, which are not easily quantifiable but are still important indicators of success.

Question 2

The nature of an organization's strategies influences the types of performance objectives managers establish.

Accepted Answer

The nature of an organization's strategies, such as cost leadership or differentiation, will impact the types of performance objectives managers establish. For example, a company focused on cost leadership may prioritize objectives related to cost reduction and efficiency, while a company focused on differentiation may prioritize objectives related to customer satisfaction and innovation.

Question 3

Part of strategic decision-making is periodically clarifying organizational vision and core competencies.

Accepted Answer

Periodically clarifying and reaffirming organizational vision and core competencies helps in making strategic decisions that align with the long-term goals and strengths of the organization.

Question 4

In implementing a balanced scorecard, managers should establish performance targets after analyzing the first set of scorecard data.

Accepted Answer

Performance targets should be established before analyzing the scorecard data to guide the measurement and evaluation process.

Question 5

One of the balanced scorecard's biggest advantages is the small amount of time and money involved in its implementation.

Accepted Answer

This statement is false. Implementing the balanced scorecard requires a significant amount of time and resources, including the involvement of key stakeholders, data collection and analysis, and creating a strategic plan based on the results. However, the benefits of the balanced scorecard can outweigh the initial costs in the long run.

Question 6

Well-run organizations evaluate performance based only on financial measures because they are more objective than nonfinancial measures.

Accepted Answer

Well-run organizations do not solely evaluate performance based on financial measures because nonfinancial measures, such as customer satisfaction and employee engagement, are also essential indicators of success. Nonfinancial measures provide a broader perspective of an organization's performance and help guide decision-making towards long-term sustainability and growth.

Question 7

The first step in implementing a balanced scorecard is developing measures for each of the perspectives.

Accepted Answer

The first step in implementing a balanced scorecard is clarifying and translating the vision and strategy, not developing measures for each of the perspectives.

Question 8

The internal business process perspective in a balanced scorecard concentrates principally on employees.

Accepted Answer

The internal business process perspective focuses on the critical operations and processes required to achieve the organization's goals, rather than primarily on employees.

Question 9

A balanced scorecard often contains four perspectives: customer, financial, internal business process, and learning and growth.

Accepted Answer

A balanced scorecard typically includes these four perspectives to ensure a balanced approach to measuring organizational performance.

Question 10

The balanced scorecard's financial perspective is focused primarily on measures of economic and accounting profits.

Accepted Answer

The financial perspective of the balanced scorecard focuses on measures related to financial performance, such as revenue growth, profitability, return on investment, and cash flow. These measures are typically based on economic and accounting profits.

Question 11

Once balanced scorecard measures have been chosen, they should not be changed for at least five years.

Accepted Answer

Balanced scorecard measures should be periodically reviewed and updated to ensure they remain relevant and aligned with the organization's strategic priorities. It is recommended to review and update them at least once a year.

Question 12

Balanced scorecard initiatives are sometimes seen as temporary fads by employees.

Accepted Answer

Some employees may view balanced scorecard initiatives as a temporary trend or management fad that will eventually fizzle out. It is important for management to communicate the long-term goals and benefits of the balanced scorecard approach to help overcome this perception.

Question 13

An organization's core competencies can include productivity, reputation, and regulatory advantages.

Accepted Answer

Core competencies refer to the unique strengths and capabilities that give an organization a competitive advantage in its market. These can include various factors such as productivity, reputation, regulatory advantages, innovation, and more. Therefore, the statement is true.

Question 14

Stakeholders in the strategic decision-making process include suppliers, customers, and the community.

Accepted Answer

Stakeholders in the strategic decision-making process can include a variety of individuals or groups, such as suppliers, customers, employees, shareholders, and the community. It is important to consider the impact of decisions on these stakeholders and involve them in the decision-making process when appropriate.

Question 15

Managers should focus on finding the "one best measure" of performance based on the type of responsibility centre they manage.

Accepted Answer

There is no one best measure of performance that can be applied to every responsibility centre. The most effective approach is to select a mix of measures that provide a well-rounded view of performance. Different types of responsibility centres may require different types of measures to accurately capture their performance.

Question 16

Learning and growth measures, if incorporated in a balanced scorecard, cannot focus on employees.

Accepted Answer

Learning and growth measures in a balanced scorecard can and should focus on employees, as they are responsible for acquiring new skills and knowledge that can drive organizational growth and success. Examples of employee-focused learning and growth measures might include training hours, employee turnover rates, employee satisfaction surveys, and leadership development programs.

Question 17

The balanced scorecard links short-term and long-term performance objectives to organizational vision and strategies.

Accepted Answer

The balanced scorecard is a strategic management tool that aligns an organization's short-term and long-term performance objectives with its vision and strategies. It helps organizations to track and measure their progress towards achieving their strategic goals from multiple perspectives, such as financial, customer, internal processes, and learning and growth.

Question 18

Successful organizations communicate their vision, strategies, goals, and objectives to upper-level employees.

Accepted Answer

This is typically considered a best practice for successful organizations in order to align everyone towards a common goal and ensure that everyone is working towards the same objectives.

Question 19

The purpose of a balanced scorecard is to translate organizational vision and strategies into performance objectives that can be monitored over time.

Accepted Answer

A balanced scorecard is a strategic management tool that helps organizations to track and manage their performance against their goals and objectives. It does this by translating the organization's mission and vision into a set of interconnected performance measures that reflect its success in key areas such as customer satisfaction, financial performance, internal processes, and learning and growth. By monitoring these measures over time, organizations can identify areas where they are performing well and where they need to make improvements, and adjust their strategies accordingly.

Question 20

The basis of a balanced scorecard is continuous strategic analysis from as many perspectives as possible.

Accepted Answer

The answer of The basis of a balanced scorecard is...

Quiz 17: Strategic Performance Measurement