Week 3 - Balanced Scorecard

Question 1

What is the balanced scorecard? What does it try to do?

Answer 1

A system incorporating financial and non financial measures into org mment systems.

Aims to translate org goals to performance measures that can be monitored over time.

Question 2

Name the 4 aspects usually considered in a balanced scorecard

Answer 2

Financial perspective - desired fin results.

Customer perspective - what type of customer do we want, how do we keep them?

Internal business process - the methods and procedures used to deliver goods and services = cust sat & efficiency

Learning and growth - success through learning and developing new strategies

Remember vision drives the choice of measures in each perspective.

Correlation between the non fin perspectives and fin perspectives.

Question 3

List common measures of financial perspective

Answer 3

ROI & RI
Profit
Income
Working captical
Cash flow
Cost per service provided

Question 4

Customer perspective is evaluated using outcome measures & performance measures.

List common measures of the customer perspective

Answer 4

Customer survey results
Market share
Repeat order rate
Complaints

Question 5

List common measures of the Internal business process perspective

Answer 5

% reduction process time
Number of engineering changes
Capacity utilisatoin
Order response time
Process capability
Time to order

Question 6

list common measures of the learning & growth perspective

Answer 6

Employee surveys
% patent protected turnover
Training days per employe
TQM improvements

Question 7

BSC and Simon’s levers of control.

Answer 7

Simons levers of control are:
Belief, boundaries, diagnostics & interactive.

BSC can be used diagnostically ie measure, monitor, feedback

Interactively - measures reflect on success of strategy

Question 8

List the strengths of the BSC

Answer 8

Communicates & links activity to strategy
Guide for improvements
Motivates - aligns & measures effort

Question 9

List weaknesses of the BSC

Answer 9

• Expensive; time consuming
• No garentee of certainty
• Mistakes in implementation ie amiguous, i
• Biases - managers pick measures
• May not work well for compensations
• may not capture core values eg environmental

Question 10

What is the value of BSC regarding management decisions

Answer 10

Better info leads to
better reports leads to
better decision making processes leads to
better decisions