Deck 16: Strategic Performance Measurement

Question 1

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

Answer 1

False

Question 2

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

Answer 2

True

Question 3

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

Answer 3

False

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

Which of the following statements about performance evaluation is true?

A) Nonfinancial measures are less useful than financial measures because they are not as objective
B) Financial measures are less useful than nonfinancial measures because they are biased
C) A combination of financial and nonfinancial measures gives a more useful picture of organizational performance than either one alone
D) Only one or two nonfinancial performance measures should be used

Question 22

Managers consider a few general strategy types in their decision making processes, including I. Cost leadership
II) Product differentiation
III) Target costing

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 23

An organization's operating plans include all of the following except

A) Specific performance objectives
B) Actual operations
C) Short-term financing
D) Short-term resource allocation

Question 24

Which of the following best describes the relationship between strategies and operating plans?

A) Operating plans form the basis for strategies.
B) Operating plans are the same as strategies.
C) Strategies lead to operating plans.
D) Strategies and operating plans are unrelated to one another.

Question 25

Managers have traditionally relied on which of the following measures to evaluate performance?

A) Qualitative factors
B) Financial measures
C) Nonfinancial measures
D) Core competencies

Question 26

FPM Corporation's strategic plan includes the following statement: "We deliver high-quality and timely service to our internal and external customers." That statement is best described as a(n)

A) Mission statement
B) Specific performance objective
C) Operating plan
D) Strategy

Question 27

Analysis of the gaps between actual operations and performance objectives can be used to I. Compensate employees
II) Prepare financial statements
III) Improve future strategies

A) I and II only
B) I and III only
C) II and III only
D) I, II, and III

Question 28

Components of organizational strategy include

A) Short-term financing
B) Actual operations
C) Financial structure
D) Comparing actual results to the budget

Question 29

Balanced scorecards can improve communication and consensus throughout an organization.

Question 30

Which of the following are inputs to the development of organizational strategy?

A) Organizational vision and operating plans
B) Operating plans and core competencies
C) Actual operations and operating plans
D) Organizational vision and core competencies

Question 31

An organization's core competencies are related to its strengths relative to competitors. Those strengths can include I. Productivity and skills
II) Reputation and legal rights
III) Mission and core purpose

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 32

Nonfinancial measures include I. Cost variances
II) Defect rates
III) Customer satisfaction surveys

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 33

Financial and nonfinancial indicators are used to assess organizational performance and effectiveness under which of the following approaches?

A) Balanced budget
B) Balanced scorecard
C) Variance analysis
D) Proforma financial statement

Question 34

The primary aim of the balanced scorecard is to

A) Put less emphasis on financial measures because they are too narrowly focused
B) use performance indicators that are highly objective
C) Translate elements of a company's strategic plan into measurable performance indicators
D) Provide a truthful basis for evaluating managers' performance

Question 35

Balanced scorecards, when properly implemented, can guide managers in making more effective decisions.

Question 36

Which of the following is a synonym for an organization's vision?

A) Purpose and ideology
B) Core competencies
C) Organizational strategies
D) Operating plans

Question 37

Lack of senior management support is one of the major causes for failed balanced scorecard initiatives.

Question 38

The balanced scorecard approach to performance evaluation I. Is less time consuming and expensive than other approaches
II) Helps managers integrate strategies across divisions and functions
III) Assists managers in predicting possible future problems

A) I and III only
B) I and II only
C) II and III only
D) I, II, and III

Question 39

An organizational vision is concerned with creating value for stakeholders, including I. The community and society
II) Employees and suppliers
III) Customers and owners

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 40

Financial measures used for organizational evaluation can pertain to I. Divisions
II) Product lines
III) Departments

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 41

"Percent of funding received from clients" would most likely be a measure in which perspective of AAI's balanced scorecard?

A) Innovation perspective
B) Financial perspective
C) Internal business process perspective
D) Employee development perspective

Question 42

Which of the following measures would most likely be found in the learning and growth perspective of the balanced scorecard?

A) Change in market share
B) Training days per employee
C) Residual income
D) Percent capacity utilization

Question 43

The measures in a balanced scorecard are guided by

A) Vision and strategy
B) Budget plans
C) Stockholders
D) The board of directors

Question 44

The perspectives in a typical balanced scorecard include all of the following except

A) Qualitative
B) Financial
C) Customer
D) Learning and growth

Question 45

Which of the following measures would least likely be included in a balanced scorecard's customer perspective?

A) Customer satisfaction rating
B) revenue growth by product line
C) Total operating income by product line
D) Percent of repeat sales

Question 46

The steps and cycles in the value chain are most closely associated with which balanced scorecard perspective?

A) Financial
B) Customer
C) Internal business process
D) Learning and growth

Question 47

Which of the following statements is true? I. Traditionally, internal operations were monitored to improve financial performance
II) In the balanced scorecard approach, monitoring for improvement is not valued
III) Managers believe that monitoring performance measures related to an organizations' learning and growth should lead to improvements in financial performance

A) I and II only
B) II and III only
C) I and III only
D) I, II, and III

Question 48

Which of the measures below would most likely be found in the customer perspective of the balanced scorecard?

A) Change in market share
B) Training days per employee
C) Residual income
D) Percent capacity utilization

Question 49

Upon completion of an adoption process, AAI's clients complete a questionnaire regarding their experience. The results of that questionnaire would most likely be summarized and reported as a part of which of the following perspectives?

A) Customer
B) Internal business process
C) Learning and growth
D) Nonfinancial

Question 50

Which of the following measures would least likely be included in a balanced scorecard's financial perspective?

A) Customer satisfaction rating
B) Percent of sales from return customers
C) Average revenue per customer
D) Increase in sales by geographic region

Question 51

The balanced scorecard's perspectives

A) Are linked through careful managerial analysis
B) Are not linked in any meaningful way
C) Are a relatively unimportant part of the scorecard
D) Are exclusively focused on internal measures in not-for-profit organizations

Question 52

The perspectives in a balanced scorecard

A) Can be adapted to an individual organization's priorities
B) Cannot be changed because of copyright restrictions
C) Include qualitative and quantitative
D) Are externally focused only in for-profit organizations

Question 53

Which of the following measures would least likely be included in a balanced scorecard's learning and growth perspective?

A) Number of patent applications for new products
B) Average training cost per employee
C) Percent of revenue from new products
D) Rank in customer surveys

Question 54

Which of the following measures would least likely be included in a balanced scorecard's internal business process perspective?

A) Percent change in throughput time
B) Customer satisfaction rating
C) Percent capacity utilization
D) Average waiting time per customer

Question 55

Steps in the operations cycle of the value chain include

A) Identifying customer preferences
B) Designing products and services
C) Building products and services
D) Providing customer service

Question 56

Steps in the innovation cycle of the value chain include

A) Delivering products and services
B) Designing products and services
C) Building products and services
D) Providing customer service

Question 57

Steps in the post-sales service cycle of the value chain include

A) Identifying customer preferences
B) Designing products and services
C) Building products and services
D) Providing customer service

Question 58

Which of the following measures would most likely be found in the internal business process perspective of the balanced scorecard?

A) Change in market share
B) Training days per employee
C) Residual income
D) Percent capacity utilization

Question 59

Which of the following measures would most likely be found in the financial perspective of the balanced scorecard?

A) Change in market share
B) Training days per employee
C) Residual income
D) Percent capacity utilization

Question 60

The internal business process perspective in a balanced scorecard is often broken down into its value chain components. Those components include all of the following except the

A) Innovation cycle
B) Operations cycle
C) Post-sales service cycle
D) Budget cycle

Question 61

Which of the following measures is least likely to be included in the financial perspective of NBOC's balanced scorecard?

A) Prime rate
B) Total loans outstanding
C) Profit margin
D) Total demand deposits

Question 62

Internal business process measures on NBOC's balanced scorecard would likely include I. Average wait time per customer
II) Training and development costs per internal employee
III) Cost per customer served

A) I and II only
B) I and III only
C) II and III only
D) I, II, and III