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EKF113 Management Accounting > Book: Strategic Performance Management > Flashcards

Book: Strategic Performance Management Flashcards

1
Q

What are the three generic strategic positions

A

Cost leadership, differentiation, focuse

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2
Q

What does the cost leadership strategy entail

A

Be cheaper at all cost. Can be achieved through scale or favorable access to technology or materials

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3
Q

What does the differentiation strategy entail

A

Quality at all cost

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4
Q

What does a strategy of focus entail

A

To cator to the needs of a specific niche

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5
Q

What is strategic positioning

A

To optimally mix the three general strategies

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6
Q

What is a defender stratrgy

A

A mix of focus and cost leadership adapted to unchanging markets where the perfection of a small array of offerings is prioritized instead of fame and innovation

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7
Q

What is the prospector strategy

A

An adaptation to uncertain markets where innovation, marketing and adaptation to change is prioritized

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8
Q

What is the difference between a performance management system and a performance measurement system

A

Performance measurement is all about interpreting performance data while performance management is about what to do with the data

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9
Q

Mention a couple of performance management frameworks

A

The results/determinants framework, the performance pyramid, the balance scorecard and the performance prism framework

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10
Q

What is the most popular performance management system

A

The balance scorecard

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11
Q

What is the balance scorecard

A

A system where strategy is turned into objectives with measurements to fulfill them

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12
Q

Are numbers always objective and acurate

A

No

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13
Q

Do more measures add more value

A

Not necessarily

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14
Q

Should the same targets apply to everyone

A

No, targets should be adapted for accuracy and motivation in the situation

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15
Q

For what four perspectives does the balance scorecard create objectives

A

The financial shareholder perspective, the customer perspectives, the internal business perspective and the learning and growth perspective

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16
Q

How does the process of creating a balance scorecard look

A

You identify objectives to the strategic teams and create targets and initiatives to fulfill them from all perspectives

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17
Q

What are the three things that encourage the choice of business strategy

A

Revenue growth and mix, cost reduction and asset utilization

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18
Q

How do you improve revenue growth

A

You may increase the number of new products, develop new customers and markets and change to a more profitable product mix

19
Q

How do you measure revenue development for improvement

A

Percentage if revenue per product, percentage of revenue per customer and measure the growth percentage through time for the different segments

20
Q

How do you achieve cost reduction

A

Reduce cost per unit or reduce associated selling or administrative costs

21
Q

How do you measure asset utilization

A

ROE and EVA

22
Q

What are five generic customer related objectives

A

Increasing market share, customer retention, customer acquisition, customer satisfaction and customer profitably

23
Q

What are four customer value propositions

A

Improved product functionality, decreased price relative to competitors, improve quality and improve delivery time

24
Q

What are customer value propositions

A

Measures that make customers perceive the offer as more valuable

25
Q

What three processes exists from the internal business perspective in the balanced scorecard

A

The innovation process, the operation process and the post sale process

26
Q

How do you improve innovation

A

Increase number of new offerings, develop new markets and customers and decrease the development time

27
Q

How do you improve operations

A

By increasing cost efficiency and or quality and by decreasing the time it takes

28
Q

How do you improve post sale service

A

Increase quality efficiency and decrease cost and redundant time

29
Q

What is the production efficiency ratio

A

Standard hours output divided by actual hours input

30
Q

What is capacity usage ratio

A

Actual hours utilized / budgeted hours utilized

31
Q

Why is only processing time value adding

A

Because only processing time creates what the customer wants

32
Q

How is manufacturing cycle efficacy calculated

A

MCE = processing time / (processing time, inspection time, wait time and move time) aka process time / total time

33
Q

How is employee capability mesured

A

Through employee satisfaction, retention and productivity

34
Q

What are some learning and growth related objectives of improvement

A

Increase employee capabilities, information system capabilities as well as motivation, empowerment and alignment

35
Q

How are information system capabilities meaured

A

Percentage of processes with realtime feedback capabilities and percentage of customer facing employees having access to costumer and product information

36
Q

How is motivation and empowerment measured

A

Measures number of suggested improvements per employee and what share is implemented.

37
Q

How is employee alignment measured

A

Measure number of employees with goals aligned with the scoreboard as well as what share fulfills them

38
Q

What are lag mesures

A

Outcome measures of past actions

39
Q

What are lead meaures

A

Current measures linking current performance to strategy

40
Q

What is a strategy map

A

An illustration where the different parts of the balanced scorecard are linked with arrows linking cause to effect, showing how each measure improves the business

41
Q

What does it mean that different perspectives are weighted in a balanced scorecard

A

To assign the percentual importance of each perspectives adherance to its target metrics. This relates to bonuses

42
Q

What are the benefits of using the balanced scorecard

A

Un-abstracts strategy, non financial causes to measurable financial effects and makes it clear what measurements are necessary for what

43
Q

What are some criticisms of the balanced scorecard

A

There is no time dimension, no empiric link between cause and effect, omission of environmental and social perspectives

EKF113 Management Accounting (10 decks)

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