Question 1

Which of the following statements about the balanced scorecard approach is false?

Accepted Answer

The balanced scorecard approach does not prioritize financial measures over nonfinancial measures. Instead, it seeks to provide a comprehensive view of performance by considering financial and nonfinancial measures from multiple perspectives.

Question 2

Throughput would be a measure of performance under which perspective of the balanced scorecard?

Accepted Answer

Throughput is a measure of how much work is done in a specific amount of time, which is typically associated with the efficiency and effectiveness of internal business processes. Therefore, throughput would be measured under the internal business perspective of the balanced scorecard.

Question 3

Which of the following statements is true regarding more traditional measures of financial performance?

Accepted Answer

Traditional measures of financial performance, such as income statements and balance sheets, can lag in capturing performance problems compared to more holistic approaches like the balanced scorecard, which includes timely and forward-looking indicators.

Question 4

Which of the following questions would the customer perspective of the balanced scorecard attempt to answer?

Accepted Answer

The customer perspective of the balanced scorecard attempts to answer how customers view the company, including their needs, preferences, satisfaction, and loyalty. Option A is related to the learning and growth perspective, option C is related to the internal business perspective, and option D is related to the financial perspective.

Question 5

Which perspective links the critical success factors of the other perspectives and ensures an environment that supports and allows the objectives of the other perspectives to be achieved?

Accepted Answer

The Learning and Growth perspective is focused on the intangible assets of an organization, particularly human capital, information capital, and organizational capital. It supports the objectives of the other perspectives by ensuring that the organization's environment fosters continuous improvement and innovation, provides the necessary training and tools for employees, and maintains an infrastructure that allows for the efficient achievement of financial, customer, and internal business process objectives. This perspective is crucial for long-term success and competitiveness.

Question 6

Which of the following statements about the balanced scorecard approach is true?

Accepted Answer

The balanced scorecard approach helps management focus on critical success factors, which may be financial and nonfinancial in nature. It does not ignore short-term operating performance, but rather considers both short-term and long-term performance. It does not focus solely on financial measures, but rather takes a balanced approach that includes both financial and nonfinancial measures.

Question 7

Return on investment (ROI) is a measure of performance under which perspective of the balanced scorecard?

Accepted Answer

ROI is a financial measure that evaluates the return earned on an investment relative to its cost, thus it falls under the financial perspective of the balanced scorecard.

Question 8

Which of the following questions would the learning and growth perspective of the balanced scorecard attempt to answer?

Accepted Answer

The learning and growth perspective of the balanced scorecard focuses on how the company can continue to improve and learn. It looks at the organization's ability to innovate, its leadership capabilities, its employee training and development programs, and its ability to create a culture of continuous improvement.

Question 9

Which of the following will least likely be an indicator of success within the internal business perspective of the balanced scorecard?

Accepted Answer

Increasing non-value-added time is not an indicator of success within the internal business perspective of the balanced scorecard as it represents inefficiency in the business process. The other options - increasing throughput, productivity, and MCE - all indicate improvements in efficiency and effectiveness, which are key indicators of success within the internal business perspective.

Question 10

Determining the market share for a company's product would be a measure of performance under which perspective of the balanced scorecard?

Accepted Answer

Determining market share is a measure of performance under the customer perspective of the balanced scorecard, as it focuses on how the company is performing in relation to meeting customer needs and expectations. The other perspectives of the balanced scorecard (internal business, financial, and learning and growth) may include different metrics or measures of performance.

Question 11

Which of the following statements regarding the balanced scorecard approach is false?

Accepted Answer

This statement is false. The balanced scorecard approach is considered to be very useful for performance measurement as it provides a more comprehensive view of overall performance beyond just financial measures. Nonfinancial and qualitative measures are also considered important for effective decision making.

Question 12

Which of the following questions would the internal business perspective of the balanced scorecard attempt to answer?

Accepted Answer

The internal business perspective of the balanced scorecard focuses on identifying and improving key business processes that are necessary for the company to achieve its strategic goals. Option C directly addresses this by asking which business processes the company must excel in. The other options (A, B, and D) are more focused on other perspectives of the balanced scorecard (learning and growth, customer, and financial, respectively).

Question 13

The balanced scorecard approach looks at a company's performance from four perspectives. Those perspectives are:

Accepted Answer

The balanced scorecard approach looks at a company's performance from four perspectives: financial, customer, internal business, and learning and growth. Option A and D are not accurate and Option B lists stakeholders rather than perspectives.

Question 14

Which of the following questions would the financial perspective of the balanced scorecard attempt to answer?

Accepted Answer

The financial perspective of the balanced scorecard focuses on financial measures such as revenue, profit, and return on investment. Therefore, the question that the financial perspective would attempt to answer is "How does the company create value for its stakeholders?" as this relates directly to financial performance.

Question 15

Which of the following will least likely be an indicator of success within the financial perspective of the balanced scorecard?

Accepted Answer

Decreasing residual income is not an indicator of success within the financial perspective of the balanced scorecard as residual income represents the amount of income that remains after deducting the cost of capital from the net operating income. A decrease in residual income may indicate that the cost of capital is higher than the net operating income or that the company is investing in projects that do not generate expected returns. Increasing ROI, decreasing operating costs, and increasing segment margin are all indicators of financial success as they represent higher profitability and efficiency.

Question 16

Determining customer loyalty would be a measure of performance under which perspective of the balanced scorecard?

Accepted Answer

Determining customer loyalty is a measure of performance under the customer perspective of the balanced scorecard. This perspective focuses on customer-related metrics such as customer satisfaction, retention, and loyalty to improve overall business performance.

Question 17

Which of the following is not one of the perspectives that is usually examined under the balanced scorecard approach?

Accepted Answer

The balanced scorecard approach typically examines four perspectives: financial, customer, internal business, and learning and growth perspectives. Creditor perspective is not a commonly examined perspective.

Question 18

Which of the following items used to measure customer response time would not be used to measure manufacturing cycle time?

Accepted Answer

The time spent delivering the product to the customer is a measure of customer response time and not manufacturing cycle time, as it is the time taken to transport the finished product to the customer. The other options (A), (B), and (C) are measures of manufacturing cycle time as they involve the internal production process of converting raw materials into finished goods.

Question 19

Residual income would be a measure of performance under which perspective of the balanced scorecard?

Accepted Answer

Residual income is a financial measure that captures the amount of profits that remain after deducting the cost of capital. Therefore, it falls under the financial perspective of the balanced scorecard.

Question 20

Increasing information systems capabilities would be a critical success factor found in which perspective of the balanced scorecard?

Accepted Answer

The learning and growth perspective focuses on the development of employees and the improvement of information systems to support business processes. Therefore, increasing information systems capabilities would be a critical success factor found in the learning and growth perspective of the balanced scorecard.

Quiz 11: Decentralization, Performance Evaluation, and the Balanced Scorecard