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Management Accounting, 6e (Atkinson et al.)

Chapter 2 The Balanced Scorecard and Strategy Map

Objective 1

1) Database and information systems are physical assets which create distinctive value forcompanies.

Answer: FAL!

!"planation: Database and information systems are intan#ible assetsDiff: 1

$erms: database and information systems

Objective: 1

AA%&: 'eflective thin(in#

) $he roles of performance measurement systems in or#ani*ations include all of the followin#

!+%!,$:

A) motivate employees to help the or#ani*ation achieve its strate#ic objectives.&) help mana#ers with resource allocation.

%) create value from intan#ible assets as well as their physical and financial assets.D) communicate the company-s strate#ic objectives.

Answer: %

Diff: 1$erms: performance measurement systems

Objective: 1


) /any intan#ible assets:

A) do not appear on the balance sheet since it is difficult to place a reliable financial value onthem.&) should be evaluated with 'O0 and other performance measures.

%) can be measured and mana#ed with current financial control systems.

D) are unimportant because they have no physical substance.Answer: A

Diff:

$erms: intan#ible assets

Objective: 1AA%&: 'eflective thin(in#

1

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) 0ntan#ible assets that are currently reported on the balance sheet include:

A) loyal and profitable customer relationships.

&) or#ani*ational culture.%) employee s(ills and motivation.

D) the cost of a patent #ivin# e"clusive ri#hts to a process.

Answer: DDiff: 1



2) $he sayin# 3what #ets measured #ets done3 refers to measurin# performance:A) so that appropriate disciplinary actions can be ta(en.

&) to ensure that employees perform e4ually in all dimensions of their jobs.

%) so that essential tas(s #et accomplished.D) to ensure that the ethical code of conduct is also bein# enforced.

Answer: %

Diff: 1$erms: performance measurement

Objective: 1


5) 6ive at least two e"amples of intan#ible assets. Are intan#ible assets critical for success7

!"plain.

Answer: 8es9 business has moved from the industrial a#e into the information a#e where(nowled#ebased intan#ible assets create value and are critical for success. !"amples include

loyal and profitable customer relationships9 hi#h4uality processes9 innovative products and

services9 employee s(ills and motivation9 and database and information systems.Diff:


Objective: 1AA%&: Analytical s(ills

/AL: $his 4uestion is not available in /yAccountin#Lab.


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Objective

1) $he financial perspective addresses which processes must we e"cel at to meet our customerand shareholder e"pectations.

Answer: FAL!

!"planation: $he learnin# and #rowth perspective addresses which processes must we e"cel atto meet our customer and shareholder e"pectations

Diff:

$erms: learnin# and #rowth perspectiveObjective:


) $he &alance corecard measures or#ani*ational performance across five different but lin(ed perspectives.

Answer: FAL!

!"planation: $he &alanced corecard ;see !"hibit ) measures or#ani*ational performance

across four different but lin(ed perspectives that are derived from the or#ani*ation-s mission9vision9 and strate#y.

Diff: 1$erms: balanced scorecard

Objective:


) $he learnin# and #rowth perspective addresses what employee capabilities9 information

systems9 and or#ani*ational capabilities we need to continually improve.Answer: $'<!

Diff: 1



) $he customer perspective of the &alanced corecard focuses on e"cellence in processes which

satisfy customers.

Answer: FAL!

!"planation: $he process perspective of the &alanced corecard focuses on e"cellence in processes which satisfy customers

Diff:

$erms: process perspectiveObjective:


2) An important financial metric in the &alanced corecard is return on investment.

Answer: $'<!

Diff:

$erms: balanced scorecard


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Objective:


5) 0mportant measures in the customer perspective usually include the percenta#e of repeatcustomers and #rowth in sales to e"istin# customers.

Answer: $'<!

Diff: $erms: customer perspective

Objective:


=) $he use of multipleperformance measures in the &alanced corecard would be e"pected to

lead to all of the followin# !+%!,$:

A) more e"tensive use of financial measures such as cost and profit.&) employees reco#ni*in# the various dimensions of their wor(.

%) the use of new performance measures such as customer satisfaction and employee morale.

D) #rouplevel performance measures.

Answer: ADiff: 1

$erms: balanced scorecardObjective:


>) $he &alanced corecard-s objectives are in balance when:

A) debits e4ual credits.

&) financial performance measurements are less than the majority of the performancemeasurements.

%) the measurements are fair.

D) the measurements reflect an improvement over the previous year.Answer: &

Diff:



?) $he &alanced corecard is said to be 3balanced3 because it measures:A) shortterm and lon#term objectives.

&) financial and nonfinancial objectives.

%) internal and e"ternal objectives.D) All of the above are correct.

Answer: &

Diff: 1$erms: balanced scorecard

Objective:



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1@) translate;s) an or#ani*ation-s mission9 vision9 and strate#y into a comprehensive

set of performance measures that provide the framewor( for implementin# its strate#y.

A) %ritical success factors&) $he value proposition

%) Objectives

D) $he &alanced corecardAnswer: D

Diff: 1



11) $he perspective of the &alanced corecard as(s9 3Bow is success measured by our shareholders73

A) learnin# and #rowth

&) customer

%) financialD) shareholder

Answer: %Diff:

$erms: financial perspective

Objective: AA%&: 'eflective thin(in#

1) $he perspective of the &alanced corecard focuses on creatin# value forcustomers.

A) Calue

&) Financial%) ta(eholder

D) %ustomer

Answer: DDiff: 1

$erms: customer perspective

Objective:


1) /easures of employees- s(ills and capabilities are included in the perspective of

the &alanced corecard.A) financial

&) internal

%) customer D) learnin# and #rowth perspective

Answer: D

Diff: 1

$erms: learnin# and #rowth perspective2


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Objective:


1) A chain of causeandeffect relationships that appropriately lin( the four balanced scorecard perspectives is:

A) a hi#h return on investment causes customer loyalty that results in s(illed production wor(ers

that improve process 4uality.&) s(illed production wor(ers help to produce process 4uality that results in customer loyalty

that helps to increase return on investment.

%) customer loyalty results in a hi#h return on investment that results in the ability to attracts(illed production wor(ers that improve process 4uality.

D) improved process 4uality results in a hi#h return on investment that causes customer loyalty

that results in the ability to attract s(illed production wor(ers.

Answer: &Diff:


Objective:


12) Defect rates for products and yield percenta#es in manufacturin# are measures of 4ualityincluded in the perspective of the &alanced corecard.

A) financial

&) production%) process

D) internal

Answer: %

Diff: $erms: process perspective

Objective:


15) 0f a performance measure in the customer perspective of the &alanced corecard wascustomer loyalty9 then a driver from the process perspective would /O$ li(ely be:

A) implementin# cuttin#ed#e technolo#y.

&) repeat sales.

%) hi#h4uality production processes.D) increased profits.

Answer: %


Objective:


5


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1=) 0f process perspective measure from the &alanced corecard was shorter cycle times9 then a

driver from the learnin# and #rowth perspective would /O$ li(ely be to:

A) lower cost of ac4uirin# materials.&) achieve justintime supplier capability.

%) offer a complete product line.

D) e"pand product offerin#s.Answer: &

Diff:

$erms: process perspectiveObjective:


1>) hat is the primary purpose of the &alanced corecard7Answer: $he primary purpose of the &alanced corecard is to translate an or#ani*ation-s vision9

mission9 and strate#y into a set of performance measures that put that strate#y into action with

clearlystated objectives9 measures and tar#et.

Diff: $erms: balanced scorecard

Objective: AA%&: Analytical s(ills


Objective

1) A properly constructed &alanced corecard tells the story of a business unit-s strate#y.

Answer: $'<!Diff: 1



) trate#y creates a competitive advanta#e by positionin# the company in its e"ternalenvironment where its internal resources and capabilities deliver somethin# to its customers

better than or different from its competitors.

Answer: $'<!

Diff: 1$erms: strate#y

Objective:


=


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) hich of the followin# statements is true7

A) Cision and mission statements set the #eneral direction for the or#ani*ation.

&) trate#y is a concise9 internallyfocused statement of how the or#ani*ation e"pects to competeand deliver value to customers.

%) /ission is a concise9 e"ternallyfocused statement that e"presses how the or#ani*ation wants

to be perceived by the e"ternal world.D) Cision is about selectin# the set of activities to create a sustainable difference in the

mar(etplace.

Answer: ADiff:

$erms: strate#y

Objective:


) $he purpose of the &alanced corecard is &!$ described as helpin# an or#ani*ation:

A) develop customer relations.

&) mobili*e employee s(ills for continuous improvements in processin# capabilities9 4uality9 andresponse times.

%) introduce innovative products and services desired by tar#et customers.D) translate an or#ani*ation-s mission9 vision9 and strate#y into a set of performance measures

that help to implement the strate#y.

Answer: DDiff:


Objective:


2) $he F0'$ step in developin# strate#ic objectives for the &alanced corecard is:

A) definin# the lon#run financial objectives.&) identifyin# the tar#et customer.

%) articulatin# the or#ani*ation-s vision.

D) select objectives for the customer value proposition.Answer: A

Diff:

$erms: strate#y9 objectives


>


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Da(ota %orporation plans to #row by offerin# a hand held application9 the ,oc(et Analyst 9

which is superior and uni4ue from the competition. Da(ota believes that puttin# additional

resources into 'ED and stayin# ahead of the competition with technolo#ical innovations iscritical to implementin# its strate#y.

5) Da(ota-s value proposition is:A) product innovation and leadership.

&) lowest total cost.

%) complete customer solutions.D) employees reco#ni*in# customer needs.

Answer: A

Diff:

$erms: value propositionObjective:


=) $o further Da(ota-s strate#y9 measures on the &alanced corecard would /O$ li(ely

include:A) shorter cycle times.

&) manufacturin# 4uality.

%) yield.

D) lowest cost supplier.Answer: &

Diff:

$erms: strate#yObjective:


plashdown %orporation manufactures water toys. 0t plans to #row by producin# hi#h4uality

water slides at a low cost that are delivered in a timely manner. $here are a number of other

manufacturers who produce similar water slides. plashdown believes that continuouslyimprovin# its manufacturin# processes and havin# satisfied employees are critical to

implementin# its strate#y.

>) plashdown-s value proposition is:A) product innovation and leadership.

&) complete customer solutions.

%) employees reco#ni*in# customer needs.D) lowest total cost.

Answer: D

Diff: $erms: value proposition

Objective:


?


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?) $o further the company-s strate#y9 measures on the balanced scorecard would /O$ li(ely

include:

A) number of process improvements.&) first to mar(et.

%) lon#er cycle times.

D) number of new products.Answer: A

Diff:

$erms: strate#yObjective:


Objective

1) Once the company selects and defines its objectives for the four &% perspectives9 it can

select measures for each objective.

Answer: $'<!Diff:



) $o create the &alanced corecard9 first measures are identified and then translated into

objectives.

Answer: FAL!!"planation: A company should start its process of buildin# a &alanced corecard by developin#

word statements of strate#ic objectives that describe what it is attemptin# to accomplish with its

strate#y.Diff:



) $he focus of the learnin# and #rowth perspective of the &alanced corecard includes

employee capabilities that continually improve customer relationships.Answer: $'<!

Diff:



1@


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) are the basic9 daytoday processes that produce products and services and deliver

them to customers.

A) /easures&) $he value proposition

%) Operations mana#ement processes

D) $he balanced scorecardAnswer: %

Diff:

$erms: operations mana#ement processesObjective:


2) 0dentify the &!$ description of the &alanced corecard-s customer perspective. $o achieveour firm-s vision and strate#y:

A) Bow do we lower costs7

&) Bow do we motivate employees7

%) Bow can we obtain #reater profits7D) Bow does the company intend to attract9 retain9 and deepen relationships with tar#eted

customers by differentiatin# itself from competitors7Answer: D

Diff:

$erms: customer perspectiveObjective:


5) All of the followin# 4uestions relate to the &alanced corecard-s learnin# and #rowth

perspective !+%!,$:

A) Bow do we achieve #reater employee satisfaction7&) Bow do we increase profits and return on capital7

%) Bow do we provide information systems with updated technolo#y7

D) Bow will we sustain our ability to chan#e and improve7Answer: &

Diff:

$erms: learnin# and #rowth perspective


11


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=) 0dentify the &!$ description of the &alanced corecard-s learnin# and #rowth perspective.

$o achieve our firm-s vision and strate#y:

A) Bow do we obtain a #reater mar(et share7&) hat do our noncustomers consider to be most important7

%) hat new processes do our customers value7

D) Bow do we identify the objectives for the people9 information technolo#y9 and or#ani*ationalali#nment that will drive improvement in the various process objectives7

Answer: D

Diff: $erms: learnin# and #rowth perspective

Objective:


>) $he returnoninvestment ratio is an e"ample of a &alanced corecard-s measure of the:

A) internal perspective.

&) customer perspective.

%) learnin# and #rowth perspective.D) financial perspective.

Answer: DDiff:

$erms: return on investment ratio9 financial perspective


?) $he number of customer complaints about a product is an e"ample of a &alanced corecard-s

measure of the:A) process perspective.



Answer: &


Objective:


1@) /anufacturin# cycle efficiency is an e"ample of a &alanced corecard-s measure of the:

A) process perspective.&) customer perspective.

%) learnin# and #rowth perspective.

D) financial perspective.Answer: A

Diff:

$erms: process perspective

Objective: 1


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11) urveys of employees- satisfaction is an e"ample of a &alanced corecard-s measure of the:A) process perspective.



Answer: %

Diff: $erms: learnin# and #rowth perspective

Objective:


1) /easures of the &alanced corecard-s learnin# and #rowth perspective include:

A) time to mar(et compared with competitors.

&) number of ontime deliveries.

%) number of process improvements.D) revenue #rowth.

Answer: ADiff:

$erms: learnin# and #rowth perspective


1) 0n the &alanced corecard9 operatin# income and return on investment

A) indicate whether the company-s strate#y and its implementation are increasin# shareholders-value.

&) are learnin# and #rowth measures.

%) are more important process measures than mar(et share.D) are direct measures of customer satisfaction.

Answer: A

Diff: $erms: strate#y9 balanced scorecard

Objective:


1) 0t is useful to thin( of the process perspective of the &alanced corecard within four

#roupin#s that include all of the followin# !+%!,$:A) operatin# mana#ement processes.

&) customer mana#ement processes.

%) innovation processes.D) re#ulatory and social processes.

Answer: &

Diff:

$erms: customer mana#ement processes1


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Objective:


1


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12) /ana#ers for the learnin# and #rowth perspective of the &alanced corecard must invest in

all of the followin# !+%!,$:

A) improve asset utili*ation.&) improvin# the s(ills of their employees.

%) enhancin# information technolo#y and systems.

D) ali#nin# employees to the company-s objectives.Answer: A

Diff:



15) 6rapevine %orporation plans to #row by offerin# a cellular phone model9 the !'$8

$ouch creen9 which is superior and uni4ue from the competition. 6rapevine believes that

puttin# additional resources into 'ED and stayin# ahead of the competition with technolo#icalinnovations are critical to implementin# its strate#y.

Required:

a. 0s 6rapevine-s strate#y one of product innovation and leadership9 lowest total cost9 or completecustomer solutions7 &riefly e"plain.

0dentify at least one (ey element that you would e"pect to see included in the &alanced

corecard:

b. for the financial perspectiveG

c. for the customer perspectiveGd. for the process perspectiveG and

e. for the learnin# and #rowth perspective.

Answer: a. 6rapevine-s strate#y is one of product innovation and leadership because thecompany plans to offer a product that is superior and uni4ue from the competition.

$he company-s &alanced corecard should describe the product innovation and leadershipstrate#y. Hey elements should include:

b. operatin# income #rowth from char#in# hi#her prices for !'$8 $ouch creen for the

financial perspectiveGc. mar(et share in the cellular phone mar(et9 customer satisfaction9 and number of new

customers for the customer perspectiveG

d. manufacturin# 4uality9 new product features added9 and order delivery time for the process perspectiveG and

e. improvements in manufacturin# technolo#ies9 employee education and s(ill levels9 and

employee satisfaction for the learnin# and #rowth perspective.Diff:


Objective: 9 9

AA%&: Analytical s(ills12


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1=) ports Fanatic %orporation manufactures colle#e football banners. 0t plans to #row by

producin# hi#h4uality colle#e football banners at a low cost that are delivered in a timely

manner. $here are a number of other manufacturers who produce similar colle#e football banners. ports Fanatic believes that continuously improvin# its manufacturin# processes and

havin# satisfied employees are critical to implementin# its strate#y.

Required:a. 0s ports Fanatic-s strate#y one of product innovation and leadership9 lowest total cost9 or

complete customer solutions7 &riefly e"plain.

0dentify at least one (ey element that you would e"pect to see included in the &alanced

corecard:

b. for the financial perspectiveGc. for the customer perspectiveG

d. for the process perspectiveG and

e. for the learnin# and #rowth perspective.

Answer:a. ports Fanatic-s strate#y is one of lowest total cost because there are a number of other

manufacturers who produce similar colle#e banners. $o succeed9 ports Fanatic will have toachieve lower costs relative to competitors throu#h productivity and efficiency improvements9

elimination of waste9 and ti#ht cost controls.

$he company-s &alanced corecard should describe the lowest total cost strate#y. Hey elements

should include:

b. operatin# income #rowth from productivity #ains and revenue #rowth for the financial perspectiveG

c. #rowth in mar(et share9 new customers9 customer responsiveness9 and customer satisfaction

for the customer perspectiveGd. yield9 time to complete customer jobs9 and order delivery time for the process perspectiveG and

e. hours of employee trainin#9 and employee satisfaction for the learnin# and #rowth perspective.


Objective: 9 9

AA%&: Analytical s(ills

15


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Objective 2

1) describe;s) specifically how success in achievin# objectives in a &alancedcorecard is determined.

A) /easures

&) $he value proposition%) $ar#ets

D) $he &alanced corecard

Answer: ADiff:

$erms: measures

Objective: 2


) establish the level of performance or rate of improvement re4uired for a measure inthe &alanced corecard.

A) %ritical success factors

&) $he value proposition%) $he &alanced corecard

D) $ar#ets

Answer: D

Diff: $erms: tar#ets

Objective: 2


) are #enerally written as action phrases and may also include the means and desired

results.A) /ission statements

&) Objectives

%) $ar#etsD) trate#ies

Answer: &

Diff:

$erms: objectivesObjective: 2


1=


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) $he followin# statements are true re#ardin# the customer perspective in the &alanced

corecard !+%!,$:

A) %ustomer satisfaction leads to customer retention&) A customer tar#et mi#ht be to reduce cash e"penses by I.

%) %ustomer retention #enerally leads to increased customer profitability

D) uccess in the customer perspective should lead to improvement in the financial perspective.Answer: &

Diff:

$erms: tar#etsObjective: 2


2) Draw a strate#y map that identifies the causeandeffect lin(a#es of the followin# objectives:,rocess 4uality

%ustomer loyalty

(illed production wor(ers

'eturn on investmentAnswer: (illed production wor(ers J,rocess 4ualityJ%ustomer loyaltyJ'eturn on

investmentDiff: 1

$erms: strate#y map

Objective: 2AA%&: Analytical s(ills

5) Draw a strate#y map that identifies the causeandeffect lin(a#es of the followin# objectives:/ar(et share

trate#ic technolo#y availability

6row revenuesDesi#n and develop new products

Answer: trate#ic technolo#y availabilityJDesi#n and develop new productsJ/ar(et

shareJ6row revenuesDiff: 1

$erms: strate#y map

Objective: 2


=) hat are the four (ey perspectives in the &alanced corecard7 0n a strate#y map9 what are the

causeand effect lin(a#es amon# these four perspectives7Answer: $he four (ey perspectives in the &alanced corecard are:

Diff:

$erms: balanced scorecardObjective: 9 2



1>


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Objective 5

1) Konprofit and #overnment or#ani*ations success must be measured by their effectiveness in providin# benefits to constituents.

Answer: $'<!

Diff: $erms: #overnment and nonprofit or#ani*ations

Objective: 5


) Outcomes9 rather than activities9 primarily drive the strate#y of nonprofit and #overnment

or#ani*ations.

Answer: $'<!Diff: 1

$erms: #overnment and nonprofit or#ani*ations9 strate#y

Objective: 5


) Konprofit and #overnment or#ani*ations #enerally place an objective related to their socialimpactand mission at the top of their scorecard and strate#y map.

Answer: $'<!

Diff: $erms: #overnment and nonprofit or#ani*ations9 strate#y9 objectives

Objective: 5


) Konprofit and #overnment or#ani*ations:

A) cannot use the &alanced corecard because they have no customers.&) cannot use the &alanced corecard because they have no financial objective.

%) may use the &alanced corecard by addin# a social impact perspective to the top of the

strate#y map.D) may use the &alanced corecard by not lin(in# it to mission and strate#y.

Answer: %

Diff:

$erms: balanced scorecard9 #overnment and nonprofit or#ani*ationsObjective: 5


1?


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2) uccess for nonprofit and #overnment or#ani*ations is measured primarily by:

A) their financial performance.

&) their effectiveness in providin# benefits to constituents.%) whether they can raise money.

D) whether they can balance their bud#ets.

Answer: &Diff:

$erms: #overnment and nonprofit or#ani*ations


5) $o effectively use the &alanced corecard9 nonprofit and #overnment or#ani*ations:

A) must identify a clear strate#y with outcomes identified.&) must focus on financial success as their primary objective.

%) must shift thin(in# from what it plans to accomplish to what it plans to do.

D) $hese or#ani*ations cannot effectively use the &alanced corecard.

Answer: ADiff:

$erms: strate#y9 #overnment and nonprofit or#ani*ationsObjective: 5


=) %ritical dimensions of the re#ulatory and social performance from the process perspective of

the &alanced corecard include all of the followin# !+%!,$:

A) community investment.

&) health and safety.%) the environment.

D) All of the above are correct.

Answer: DDiff:

$erms: balanced scorecard9 re#ulatory and social processes


>) Bow does a &alanced corecard for nonprofit and #overnment a#encies differ from a for profit scorecard7

Answer: $he or#ani*ation-s mission drives the nonprofit and #overnment a#ency-s &alanced

corecard9 whereas the financial perspective objectives drive the forprofit &alanced corecard.$he forprofit must satisfy customers9 while the nonprofit and #overnment a#ency must satisfy

funders and recipients.

Diff: $erms: balanced scorecard9 re#ulatory and social processes

Objective: 5


/AL: $his 4uestion is not available in /yAccountin#Lab.@


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1


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Objective =

1) %!Os and senior leadership can effectively implement a company-s strate#y by themselves.Answer: FAL!

!"planation: %!Os and senior leadership can effectively implement a company-s strate#y by

involvin# all levels of the or#ani*ation.Diff: 1

$erms: strate#y

Objective: =AA%&: 'eflective thin(in#

) Hey performance indicator scorecards will typically use common measures9 such as customer

satisfaction9 process 4uality9 cost9 and employee satisfaction and morale9.Answer: $'<!

Diff:

$erms: (ey performance indicator scorecard


) 0f the lin( to strate#y is not clearly established9 (ey performance indicator cards will lead to

local but not to #lobal or strate#ic improvements.

Answer: $'<!Diff:

$erms: (ey performance indicator scorecard

Objective: =


) ,oor scorecard desi#n9 rather than a poor or#ani*ational process9 is the bi##est threat to

successful &alanced corecard implementation.Answer: FAL!

!"planation: ,oor or#ani*ational process9 is the bi##est threat to successful &alanced corecard

implementation.Diff: 1


Objective: =


2) 0f a &alanced corecard-s implementation team is really committed9 they can initially developthe perfect scorecard.

Answer: FAL!

!"planation: $here is no perfect scorecard. $he balanced scorecard is adapted to eachor#ani*ation and is chan#ed over time as necessary.

Diff: 1


Objective: =


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5) $he measurement of the objectives for the &alanced corecard:A) creates focus for the future.

&) communicates an important messa#e to all employees.

%) focuses the entire or#ani*ation on strate#ic implementation of company-s outcomes.D) All of the above are correct.

Answer: D

Diff: $erms: measurement9 objectives

Objective: =


=) $ranslatin# a company-s strate#y to operational terms:

A) is an analytical e"ercise.

&) results in the benefit of havin# the end product of the balanced scorecard.

%) often results in team buildin# and employees- commitment to the new strate#y.D) All of the above are correct.

Answer: DDiff:

$erms: strate#y9 objectives


>) hich of the followin# statements re#ardin# ali#nin# the or#ani*ation to strate#ic objectives

is true7A) /easures of individual business units must add up to the corporate measure9 just li(e

a##re#atin# financial measures.

&) upport functions and shared units are e"empt from the &alanced corecard-s process perspective since they have no e"ternal customer.

%) Bi#hlevel strate#ic objectives on the corporate balanced scorecard #uide the development of

&alanced corecards for the decentrali*ed operatin# units.D) All of the above are correct.

Answer: %

Diff:

$erms: strate#y9 objectivesObjective: =



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?) hich of the followin# statements re#ardin# the use of strate#y in companies is correct7

A) All employees are challen#ed to develop individual personal objectives that support corporate

objectives.&) %!Os and senior leadership can implement a company-s strate#y by themselves.

%) 0t is safe to assume that the wor(force is incapable of understandin# these concepts and ideas.

D) All of the above are correct.Answer: A

Diff:

$erms: strate#y9 objectivesObjective: =


1@) $o become a strate#yfocused or#ani*ation:A) monthly mana#ement meetin#s should focus on variances between actual performance and

what was planned.

&) the bud#etin# process must protect lon#term initiatives from the pressures to deliver short

term performance.%) scorecards and priorities should be updated annually when preparin# ne"t year-s bud#et.

D) All of the above are correct.Answer: &

Diff:

$erms: strate#yObjective: =


11) ,roblems may arise when developin# a &alanced corecard for all of the followin# reasons!+%!,$:

A) poor or#ani*ational process for development and implementation of the &alanced corecard.

&) too few scorecard measures.%) lac( of lin(a#e between drivers in the process and learnin# and #rowth perspectives.

D) none of the above

Answer: %Diff:


Objective: =


1) Hey performance indicator cards are scorecards that are developed:

A) with only a sin#le measure for each of the &alanced corecard-s perspectives.&) without wor(in# from or#ani*ational strate#y.

%) to be more effective than the balanced scorecard.

D) to define the compensation system for e"ecutives.Answer: &

Diff:


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$erms: (ey performance indicator cards

Objective: =


1) Hey performance indicator cards:

A) lead to local but not #lobal or strate#ic improvements if they are not lin(ed to strate#y.&) include only financial measures.

%) are or#ani*ed into ten perspectives.D) measure only a sin#le &alanced corecard perspective.

Answer: A

Diff:

$erms: (ey performance indicator cardsObjective: =


1) $he #reatest threat to successful &alanced corecard implementation is:

A) poor scorecard desi#n.

&) a poor or#ani*ational process for development and implementation.%) too few scorecard measures.

D) too many financial perspective measures.

Answer: &


Objective: =


12) <sin# too few balanced scorecard measures:

A) will not balance desired outcomes with performance drivers of those outcomes.&) is better than usin# too many scorecard measures.

%) results in a lac( of lin(a#e between drivers in the process and learnin# and #rowth

.perspectivesD) All of the above are correct.

Answer: A

Diff:

$erms: balanced scorecardObjective: =


15) uccessful implementation of the &alanced corecard:

A) may be completed by one important member of the senior mana#ement team9 such as the

chief financial officer.&) involves everyone in the or#ani*ation (nowin# and understandin# the strate#y.

%) should not be#in until data are collected for all scorecard measures.

D) starts with a process to ac4uire a new data collection system.

Answer: &2


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Diff:



5


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1=) hat is the (ey in#redient to successful &alanced corecard implementation7 !"plain.

Answer: $he (ey in#redient to successful &alanced corecard implementation is to actively

involve senior mana#ement.Only senior mana#ement understands the strate#y of the whole or#ani*ation and is empowered to

ma(e the necessary decisions. $heir involvement also builds emotional commitment that is as

important as their (nowled#e and authority.Diff:

$erms: balanced scorecard9 strate#y

Objective: =AA%&: Analytical s(ills


1>) hat is a (ey performance indicator scorecard and how does it differ from the &alancedcorecard7 hich is more effective7

Answer: $he &alanced corecard translates an or#ani*ation-s strate#y into a set of performance

measures that put that strate#y into action with clearlystated objectives9 whereas the (ey

performance indicator scorecard does not lin( the performance indicators to a strate#y. $he&alanced corecard is more effective because it lin(s to the performance measures to a

company-s strate#y.Diff:

$erms: balanced scorecard9 (ey performance indicator scorecard

Objective: =AA%&: Analytical s(ills


=


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chapter 2 TB.doc