(d) The requirement is to define the balanced scorecard. Answer (d) is correct because the balanced scorecard is a strategic performance measurement and management framework. Answer (b) is incorrect because it is the definition of a strategy map. Answer (c) is incorrect because it is the definition of a list of strategic initiatives.
(b) The requirement is to identify the focus of valuebased management. Answer (b) is correct because value-based management focuses on financial measures to measure performance. The balanced scorecard uses both financial and nonfinancial measures to measure performance.
(a) The requirement is to identify what illustrates causeand- effect relationships. Answer (a) is correct because a strategy map displays cause-and-effect relationships within the balanced scorecard framework. Answer (b) is incorrect because the value chain is the sequence of business processes that add value to a good or service
(d) The requirement is to identify the item that is not a component of the balanced scorecard. Answer (d) is correct because an assessment of human resources is not a component of a balanced scorecard. Answer (a) is incorrect because a statement of strategic objectives is a component of a balanced scorecard. Answer (b) is incorrect because targets for performance are part of a balanced scorecard. Answer (c) is incorrect because strategy initiatives are part of a balanced scorecard.
(c) The requirement is to identify the description of the value chain. Answer (c) is correct because the value chain is the sequence of business processes in which usefulness is added to the product or service. Answer (a) is incorrect because causeand- effect linkages are used to develop the balanced scorecard. Answer (b) is incorrect because the baseline level of performance is the current level of perfor-mance. Answer (d) is incorrect because there is no chain of financial and nonfinancial measures.
(c) The requirement is to identify which item is not a characteristic of the balanced scorecard. Answer (c) is correct because customer performance is one of the four primary components of the balanced scorecard framework; therefore, it is not excluded. Answers (a), (b), and (d) are incorrect because they are all characteristics of the balanced scorecard.
(d) The requirement is to identify where in the balanced scorecard framework surveys of employee satisfaction should appear. Answer (d) is correct because surveys of employee satisfaction would appear in the learning and growth perspective which includes various employee measures including employee turnover. Answer (a) is incorrect because the financial perspective includes measures such as profitability and return on investment. Answer (b) is incorrect because the customer perspective includes measures like customer satisfaction. Answer (c) is incorrect because the internal business processes perspective includes measures related to cost, quality, and time.
(c) The requirement is to identify the efficiency measure. Answer (c) is correct because an efficiency measure relates output to a measure of input. Answer (a) is incorrect because it does not relate output to input. Answer (b) is incorrect because it is an effectiveness measure. Answer (d) is incorrect because it does not relate output to input.
(a) The requirement is to identify the definition of a strategy objective. Answer (a) is correct because it is the definition of a strategy objective in the balanced scorecard framework. Answer (b) is incorrect because it describes a strategic initiative. Answer (c) is incorrect because it is the definition of a strategy map. Answer (d) is incorrect because it is the definition of a target.
(d) The requirement is to identify the definition of a target. Answer (d) is correct because it is the definition of a target in the balanced scorecard framework. Answer (a) is incorrect because it is the definition of a strategic objective. Answer (b) is incorrect because it is the definition of strategy initiatives. Answer (c) is incorrect because it is the definition of a strategy map.
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