Topic 5

Question 1

Strategy to ________ how an organization to _______ its own capabilities with the opportunities in the market place to _______ its objectives

Answer 1

specify

match

accomplish

Question 2

Strategy to _______ how an organization can create value for its customers while differentiating itself from its competiors.

Answer 2

describe

Question 3

To _______ its strategy, an organization must first thoroughly understand its industry: 5 forces: competitors, potential entrants into the market, equivalent products, barganing power of customers, and bargaining power of input suppliers

Answer 3

formulate

Question 4

To ______ to these challenges, the company must choose between two basic strategies: differentiating its product or achieving cost leadership

Answer 4

respond

Question 5

Product differentiation to _____ products or services its customere perceive to _______ superior and unique

Answer 5

offer

be

Question 6

Managers use differentiation to ________ brand loyalty and _______ higher prices.

Answer 6

increase

charge

Question 7

Cost leadership is to _______ lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control.

Answer 7

achieve

Question 8

To _______ the success of its strategy, a company must trace the sources of its profitability to product differentiation or cost leadership.

Answer 8

evaluate

Question 9

To _______ cost leadership strategy, the company must further improve its own internal capabilities

Answer 9

achieve

Question 10

Reengineering is the fundamental rethinking and redesign of business processes to ______ improvements in critical measures of performance, such as cost, quality, service, speed, and customer satisfaction.

Answer 10

achieve

Question 11

To _____ successful, reengineering efforts must focus on an entire process, change roles and responsibilities, eliminate unnecessary activities and tasks, use information technology and develope employee skills

Answer 11

be

Question 12

Balance scorecard translates an organization’s mission and strategy into a set of performance measures to _______ the framework for implementing its strategy.

Answer 12

provide

Question 13

Balance scorecard to ________ financial objectives and its also highlights the nonfinancial objectives to _______ and _______ its financial objectives

Answer 13

achieve

meet

sustain

Question 14

The set of measures used to _______ performance depend on strategy is called a “ a balanced scorecard”

Answer 14

trace

Question 15

Balance scorecard to __________ the use of financial and nonfinancial performance measures to ________ short-run and long-run performance in a single report

Answer 15

balance

evaluate

Question 16

Strong improvement in nonfinancial measures usually to _________ future economic value

Answer 16

create

Question 17

A strategy map is a diagram to _______ how an organization creates value by connecting strategic objectives in explicit cause-and-effect relationships with each other in the financial, customer, internal-business-proces, and learning-and-growth perspecitives.

Answer 17

describe

Question 18

The strategy map help to ________ whether these activities are generating financial returns

Answer 18

evaluate

Question 19

Finanacial perspective to _______ the profitability of the strategy and the creation of shareholder value

Answer 19

evaluate

Question 20

Customer perspective to _______ targeted customers and maret segments and to _______ the company’s success in these segments

Answer 20

identify

measure

Question 21

Internal - business - process perspective focuses on internal operations to _______ value for customers that, in turn, help to ______ financial performance

Answer 21

create

achieve

Question 22

The problems with non-financial performance measures

- Wide choice of non-financial _______ available

- Their development can be _______ and undirected

- Managers must necessarily make trade-offs between achieving some measures and not others

- Some measures lack integrity

+ Accuracy of the data, opportunity for manipulation

- Some measures not easily translated into financial outcomes

Answer 22

measures

ad-hoc

Question 23

VISION AND MISSION

- Before determining the objectives and measures, an organization should already have a ______ and ______ statement

+ And a general idea of its strategy

- These high-level statements can then be translated into detailed objectives and measures

- The exact definitions of vision and mission can vary, but the following examples should provide helpful guidelines

Answer 23

vision

mission

Question 24

VISION

• A concise statement that defines the mid to long-term (______ year) goals of the organization
  
• The vision should be ______ and ________ and should express, often in colorful or “visionary” terms, how the organization wants to be perceived by the world

Answer 24

3 - 10

external

market-oriented

Question 25

MISSION - A concise, _________ statement of how the organization expects to compete and deliver value to customers  - It often states the reason for the organization’s existence, the basic purpose towards which its activities are directed, and the values that guide employee’s activities

Answer 25

internally-focused

Question 26

PUTTING VISION IN ACTION - The Vision and Mission set the general direction for the organization  + They are intended to help shareholders, customers, and employees ________ what the company is about and what it intends to achieve  - But these statements are far too vague to guide day-to-day actions and resource allocation decisions  - Companies start to make the statements operational when they define a strategy of how the vision and mission will be achieved

Answer 26

understand

Question 27

STRATEGY AND THE BSC It identifies and makes explicit the hypotheses about ____________ relationships between:  - Outcome measures in the Financial and Customer perspectives  + E.G., ROI and customer loyalty  - and the _________ of those outcomes that are measured in the Internal and Learning & Growth perspectives  + Such as zero defect processes, short cycle times, and skilled, motivated employees

Answer 27

the cause and effect performance drivers

Question 28

OBJECTIVES - Are concise statements that articulate what the organization hopes to accomplish  - Best stated as action phrases  + May include the means and the desired results  - Tell the story of the strategy through the cause-and-effect relationships in each of the four balanced scorecard perspectives E.g: ________

Answer 28

Obj. 1=> To achieve a 40% market share within 5 years. | Obj. 2=> To achieve an ROI of 10% within 5 years.

Question 29

Typical objectives found in each of the four BSC perspectives include:  - Increase revenues through expanded sales to existing customers ( __________ perspective)  - Become service oriented ( __________ perspective)  - Achieve excellence in order fulfillment through continuous process improvements ( _________ perspective)  - Align employee incentives and rewards with the strategy ( _________ perspective)

Answer 29

Financial Customer Internal Learning & Growth

Question 30

MEASURES - Describe how ________ in achieving an objective will be determined.  - Provide specificity and reduce the _________ that is inherent in word statements  - Specifying exactly how an objective is measured will give employees a __________ focus for their improvement efforts  - Once the objectives have been translated into measures, managers select _________ for each measure

Answer 30

success ambiguity clear targets

Question 31

NON-FINANCIAL MEASURES for OPERATIONAL CONTROL ``` - Customer satisfaction  ---> Measured by survey administered to customers  - __________ measures  ---> Measurement of faults in a product that occur during the manufacturing process  ---> Support a _________ strategy  - Quality  ---> Periodic inspections or testing of products  - Accident report  ---> Safety statistics  - Multi-skilling  ---> Number of employees who have attained skills to allow them to undertake a range of operational tasks  - Machine downtime & Productivity  ---> Number of hours, or percentage of total production hours, that machines are unable to operate  ---> Labour Productivity  - Delivery on time  ---> Prompt delivery to customers is an important driver of customer value ```

Answer 31

Defect high-quality

Question 32

FINANCIAL PERSPECTIVE - Reflects perspective of the shareholder  - Summarises the financial outcomes of decision and actions  - Measures include various cost and product measures, __________, cash flow measures, shareholder value measures.

Answer 32

return on investment

Question 33

CUSTOMER PERSPECTIVE  - Measures the company’s success in ________ customer value  - Outcome (lag) measures include customer profitability, market share, number of _________.  - Lead indicators include on-time delivery, number of defects

Answer 33

achieving new customers

Question 34

INTERNAL BUSINESS PROCESSES  - Objectives relate to ________ processes that contribute to achieving customer and financial objectives  - Processes critical to delivering products to customers and achieving financial strategies  - Product design, operations, marketing, sales, customer service processes  - Measures of cost, product quality, time-based measures, ________ development

Answer 34

specific new product

Question 35

LEARNING AND GROWTH - Focuses on the capabilities of the organisation to achieve ____________ that create both customer and shareholder value.  - To deliver long-term growth and ________  - Measures focus on employee capabilities, capabilities of information systems and organisational climate  - Employee satisfaction, training, skills, employee suggestions

Answer 35

superior internal processes improvement

Question 36

Measures in the balanced scorecard provide balance between  - Short-term and ________ objectives  - Financial and customer measures, and measures of business processes, and learning and growth  - Objective and easily quantified measures and subjective performance measures  - Outcome measures and _______ of those outcomes, i.e. lead and lag measures.

Answer 36

long-term drivers

Question 37

LAG INDICATORS - Monitor progress towards the organisation's ________.  - Difficult to monitor directly  - Summary financial measures, market share, customer satisfaction

Answer 37

objectives

Question 38

LEAD INDICATORS - Measures that drive the outcomes and provide information that is actionable and manageable  - Relate to the _______ and _______ of the business  - Improvements in these measures should, over time, flow through to improvements in lag indicators

Answer 38

processes activities