Balanced Scorecard and Benchmarking

Question 1

List five pitfalls that should be avoided with a balanced scorecard.

Answer 1

1. Don’t assume all linkages to be precise
2. Don’t seek improvements across all measures all the time
3. Don’t use only objective measures on the scorecard
4. Don’t fail to consider both costs and benefits of initiative such as spending on information technology and research and development
5. Don’t ignore nonfinancial metrics when evaluating managers and employees

Question 2

List four features of a good balanced scorecard.

Answer 2

1. Articulates a company’s strategies
2. Assists in communicating the strategy
3. Limits the number of measures
4. Highlights suboptimal tradeoffs that managers may make

Question 3

List three important points and features of benchmarking.

Answer 3

1. A company can’t be the best at everything
2. Benchmarking should be an ongoing process within the organization
3. Don’t try to focus on improving in every benchmark area all the time

Question 4

List the four evaluation perspectives for a balanced scorecard.

Answer 4

1. Financial
2. Customer
3. Internal Business Processes
4. Learning, Innovation, and Growth

Question 5

List some examples of measures f performance from the customer perspective.

Answer 5

Market share, product returns as a percentage of sales, number of new customers, percentage of repeat customers, sales trends, etc.

Question 6

Define “benchmarking”.

Answer 6

A process in which organizations compare their own processes and performance with the process and performance of business leaders within or across competing industries.