Ch 12

Question 1

Process measures

Answer 1

Work system performance&raquo_space; improve cost savings or high productivity by using internal/external resources

External: reduced emission levels, waste stream reductions, by-product use, recycling

Internal: cycle times, production flexibility, lead times, set up times, time to market

Question 2

Customer focused measure

Answer 2

Viewed by customers. Include direct measures of cust. Satisfaction and dissatisfaction, customer retentio, gains and losses of customer and accounts, complaints, & warranty claims.

Question 3

Workforce focused measure

Answer 3

How well the org has created and maintained productively, engaging and caring work environment.

Outcome: increased workforce retention&raquo_space; peer recognition program or # of promotions
Or safety, effective training, engagement

Question 4

Leadership & governance measures

Answer 4

Regulatory, legal compliance, results of oversight audits, financial and ethics review results

Outcome: measures of social responsibility & community service

Question 5

Financial and market measures

Answer 5

Tracked by senior leadership to gauge overall org performance, used 2 determine incentive compensation for senior executives

Include revenue, return on equity, return on investment, operating profit, pretax profit margin, earnings per share, other liquidity measures

Market: market shar, business growth, new product and geographical entered, % of new product sales

Question 6

Analytics

Answer 6

Use of data, information technology, statistical analysis, quantitative methods, and mathematical or computer based models to help managers gain improved insight about their business operations and make better

Question 7

Descriptive analytics

Answer 7

Use of data to understand past and current performance and make informed decisions

Question 8

Predictive analytics

Answer 8

Analyzing past performance in an effort to predict the future by examining historical data, detecting patterns

Question 9

Prescriptive analysis

Answer 9

Using optimization to identify best alternatives

Question 10

Disciplines underlying analysis

Answer 10

Statistics, business intelligence & operations research/management science

Question 11

Purpose of performance measurement system

Answer 11

• provide perspective of past, present future
• identify tends & progress
• cause & effect relationships
• provide direction & support 4 cont improvement
• allowing performance comparison to benchmarks

Question 12

Why do balance scorecards fail most of the time?

Answer 12

Not identifying real drivers of customer satisfaction, not defining measures appropriately to focus attention on areas that have greatest impact on org performance; negotiating goals rather than basing them on customer requirements, limitations and improvements

Question 13

Most organizations make two fundamental mistakes

Answer 13

1: not measuring key characteristics critical to organizational performance or customer behavior
2: taking irrelevant or inappropriate measurements

Question 14

Balance scorecard

Answer 14

Identifying right measures by aligning them with org’s vision and strategy.

Org’s have a means of setting targets and allocating resources for short-term planning, communicating strategies, align personal goals to strategies

Question 15

Key performance measures should be align with

Answer 15

Strategies and action plans

Question 16

Enterprise Resource Planning (ERP)

Answer 16

Systems are software packages that integrate org information systems and provide an infrastructure for managing information across the enterprise

Integrate: accounting, customer relationship mgmt, supply chain MGT, manufacturing, sales and HR into a unified info system and provide analysis of reporting sales data

Question 17

ERP system allows organizations

Answer 17

To share database in a networking environment and store and process key data in a unique database, & distribute it to a large group of users,

Question 18

Periodic audit

Answer 18

Examine whether measures are aligned with org’ shoals, whether the right balance btwn leading and lagging measures and btwn operational and strategic measures has been struck the measurement system

Question 19

Analysis

Answer 19

Examination of facts and data to provide a basis for effective decisions

• examine trends/ change in measures using charts & graphs
• Calculate statistical measures (means, proportions, STD DEV)
• correlation & regression analysis to help understand relationships among diff measures
• compare results relative to other business units, competitors, or best benchmarks

Question 20

Interlinking

Answer 20

Describes quantitative modeling of cause-and-effect relationships btwn performance measures. (Customer satisfaction & product quality or employee performance)

Question 21

Data Mining

Answer 21

Process of searching large databases to find hidden patterns in data, using cluster analysis, neutral networks, & fuzzy logic.

Inexpensive, provide new competitive knowledge, but requires clean data, cannot est cause and effect. Easily Lead to useless insights or overlook insights that are important.

Question 22

Comparative Data

Answer 22

Industry averages, competitor performance, world class benchmarks, or performance measures of other organizations w/ similar product offerings.

Use for: needing to know where it stands relative to competitors and to take best practices; provide great breakthrough improvement or change

Question 23

Performance review

Answer 23

• to assess org success and performance relative to competitors
• understand how well plan is being achieved
• identify priorities for improvement and opportunities for innovation for products, services, and process

Question 24

Knowledge assets

Answer 24

Accumulated intellectual resources that an org possesses
-information, ideas, learning, understanding, memory, insights, cognitive & technical skills, and capabilities

-has explicit knowledge, and tacit knowledge

Question 25

Explicit knowledge

Answer 25

Information stored in documents or other forms of media like databases, policies, and procedures, and technical drawings

• easily captures, stored, and disseminated using computer technology
• (THINK GOOGLE)

Question 26

Tacit Knowledge

Answer 26

Information formed around TANGIBLE factors resulting from an org’ sorry individual’s experience, and content specific

• patents, software, or unique understanding or customer requirements that differentiates an org’s from it’s competitors
• EX: knowledge from research or job experience, cross-functional teamwork, or after action reviews

Question 27

Knowledge Management

Answer 27

Process of identifying, capturing, organizing, and using knowledge assets to creat and sustain competitive advantage.
-allows intangible info to be managed as an org asset in a manner similar to tangible assets

Question 28

Internal benchmarking

Answer 28

Ability to identify and transfer best practices within the org

• most mature org may falter are in this area
  1. Identify & collect internal knowledge
  2. Sharing and understanding those practices
  3. Adapting and applying them to new situations and bringing them up to best practice performance levels

Question 29

Rapid knowledge transfer (RKT)

Answer 29

Involves the discovery, learning, creation, and reuse of knowledge that eventually becomes intellectual capital–knowledge that can be converted into value and profits.