Exam 18: Business Strategy, Performance Measurement, and the Balanced Scorecard

Johnson Lawncare Company is deciding whether they need to change their credit policies for new and existing customers. Management feels the company is not as liquid as they should be because of a perceived increase in collection times. To check that perception, they pulled the following information from their past two balance sheets: What are the accounts receivable turnover in each year? Is management justified in believing that collections have become less effective?

What is SWOT analysis, and how it most often used by businesses? Are these elements most likely to be internal or external? In your response, please make sure to discuss each component.

Nonfinancial performance measures are often helpful to organizations when they evaluate actions that are being taken now to achieve success later. Which of the following is most likely to be a nonfinancial performance measure utilized by the Human Resources Department?

Once a business is ready to move from identifying industry challenges to overcoming them, the company may choose to complete a SWOT analysis. This tool helps the organization identify internal and external factors affecting them. Which of the following is the best breakdown of Internal and External forces in a SWOT analysis?

Robert Kaplan and David Norton created the balanced scorecard (BSC) back in 1992 to help companies balance both financial and nonfinancial measures. Which of the following is one of the four perspectives in the BSC?

A local salon has reached the end of its second quarter of the fiscal year and is evaluating the financial perspective of its balanced scorecard. The salon has decided to make some changes this year to become more competitive in their local market. One of their objectives is to increase their revenues. What is an initiative that management can put in place to achieve this?

One important aspect of performance measurement is appropriately assigning responsibility based on the level of employee in the hierarchy of the company. If done incorrectly in an imbalanced fashion, then employees may feel as though they have an unfair work environment. Which of the following responsibilities would be more appropriate for upper management?

The balanced scorecard (BSC) commonly measures what a company considers important from four different perspectives. The BSC must integrate with the organization's mission, vision, and strategy, but it is predominantly a performance measurement tool to compare actual results against desired objectives. Which of the following phrases supports the rationale for using the financial perspective?

Baldwin Landscaping Services is entering its fifth year of operations and is currently performing its year-end analysis. Organizational management evaluates both financial and nonfinancial measures to determine what areas may need improvement. They asked Karen, a staff accountant, to collect some data and perform an analysis on their accounts receivable. Karen has gathered the following information: Use the information above to answer the following questions. (Use 365 days in each year, and round all calculations to two decimal places.) a. What are the Accounts Receivable Turnovers in Years 1 and 2, and what is the percentage change between years? b. What are the Days' Sales in Receivables in Years 1 and 2, and what is the change between years? c. Based on this initial analysis, which year was more efficient at collection of accounts receivables, and what changes could the organization make (if any) to improve these financial metrics?

Trevor sculpts unique vases for houseplant when he is not working as a full-time vet technician at a small, family practice. Trevor's side business has grown exponentially, and he would like to hire someone to help manage the online ordering system and pack orders for shipment. Currently, the monthly costs of his business include: Variable Costs of $10.00 per unit and fixed costs of $773.00. Hiring an assistant would increase his monthly costs by $5,423.00. If Trevor decides to hire the assistant, then how many additional units would he have to sell in a year to generate an annual operating income of $37,823 if the sales price is $18.00 per unit? Round final answer to the nearest whole unit.

Businesses use Porter's Five Forces to determine how well companies will be able to generate a profit. To create and implement a successful strategic route, companies will take these five forces into consideration. Which of the following is a good representation of the power of customers?

Sarah is a dressmaker who operates a small online marketplace. Her business, Fancy Knits, has grown beyond Sarah's capacity to handmake all requested items herself. She knows she will soon have to outsource her sewing to another company or individual. When she outsources, she will be able to continue to grow her business and expand it into new markets. Sarah has a dedicated clientele she would like to engage with in more meaningful ways, so she is considering an increase in her social media presence. Sarah has big hopes and dreams, and she would like her business to continue to be successful without trying to expand too quickly. Sarah knows that proper planning and adoption of a strong strategy provide her with the best chance of success. a. What is a strategy map, and why do businesses use them? Would Fancy Knits be able to utilize a strategy map in their strategic planning? b. If the company decides that they would like to focus on customers during their next fiscal year, then what would an appropriate objective be on their balanced scorecard? Would this perspective directly impact any other balanced scorecard perspectives? c. Which strategy does the objective you created best reflect: cost leadership or product/service differentiation? If you were talking to Sarah, what current strategy would you recommend she keep using?

A public university has an objective of increasing enrollment in its online programs. The university has an online division where each major program is represented, and they have a representative assigned to each program. What is a relevant key performance indicator (KPI) that could be used to measure success?

Performance measurement is an important pillar of an organization's management control system, and while these pillars are consistent, each business is likely to use different approaches for each one. Performance measurement is the fourth pillar and is an anchor in the process. Which of the following is representative of effective performance measurement in a call center environment?

What is a balanced scorecard (BSC), and why was it created? Discuss the four traditional areas the framework divides an organization's objectives and metrics into.

A company's chosen strategy is the route it uses to arrive its destination. A guiding set of principles for laying out the long-term goals is known as Porter's Five Forces. Which of the following best represents the bargaining power of a carrot farmer as a supplier?

Sarah is the general manager for an electronics company, and they are currently evaluating company's performance for the year. Sarah decided to use a balanced scorecard (BSC) to look at both financial and nonfinancial metrics. Which of the following would be an appropriate objective to be implemented under the learning and growth perspective?

The following objectives are items of continuous improvement appropriate for many companies in different industries. Categorize each of these 8 objectives as a product differentiation or cost leadership strategy. If any of the objectives fit both categories, then briefly explain why.

When a company is in its planning stage, it must analyze the existing market to plan its path to success. According to Porter, there are five forces that shape the industry a business operates within. Which of the following is least likely to be considered one of these five forces?

Karen is the sales manager for a local car dealership firm and is working on a balanced scorecard (BSC) to evaluate the firm's performance. Her current focus in on the customer perspective. Which of the following would be an appropriate initiative and measure if the firm's objective is to increase customer satisfaction?