Previous Midterm pt 1

Question 1

What part of the strategy triangle is the balanced scorecard under?

Answer 1

The GOALS section

Question 2

What is the balanced scorecard?

Answer 2

A strategic planning system used to align business activities to the vision and strategy of the organization

Question 3

What are the 4 measures of the balanced scorecard?

Answer 3

1. Financial: data must be timely, accurate, and provided regularly
2. Customer: stresses importance of customer focus and satisfaction so you don’t lose them to competitors
3. Internal Processes: based on the mission, do products conform to customer requirements
4. Innovation & Learning: Based on employee training and corporate cultural attitudes

Question 4

What activities are included under the financial measure of the balanced scorecard?

Answer 4

1. Revenue growth
2. Cost management
3. Asset management

Question 5

What activities are included under the customer measure of the balanced scorecard?

Answer 5

1. Market share
2. Customer retention
3. Customer acquisition
4. Customer satisfaction
5. Customer profitability

Question 6

What activities are included under the internal processes measure of the balanced scorecard?

Answer 6

1. Quality
2. Productivity
3. Delivery
4. After sales service

Question 7

What activities are included under the innovation & learning measure of the balanced scorecard?

Answer 7

1. Employee capabilities
2. Information technology
3. Motivation
4. Alignment

Question 8

What is a leading indicator?

Answer 8

A metric or event that signals future events

Question 9

What is a lagging indicator?

Answer 9

A signal that follows an event. Useful for confirming a specific pattern of events is appearing

Question 10

Which of the balanced scorecard measures is a lagging indicator and why?

Answer 10

Financial is a lagging indicator because it reports on the results of actions already taken. The performance of the other 3 signal possible performance of financial.

Question 11

What are the two measures that make up the performance matrix?

Answer 11

Operating performance and organizational health

Question 12

What is operating performance?

Answer 12

The hard or quantitative measures of financial and market performance

Question 13

What are some typical measures of operating performance?

Answer 13

1. Profitability (profit margin, ROE, value added)
2. Financial position (leverage, liquidity)

Question 14

What is organizational health?

Answer 14

Softer or more qualitative measures of performance.

Question 15

What are some typical measures of organizational health?

Answer 15

Management and worker enthusiasm, problem solving, learning ability, sustainability

Question 16

How is the performance matrix used to assess organizational performance?

Answer 16

Classifies operating performance and organizational health as positive or negative

Question 17

What 3 questions are asked by the performance matrix?

Answer 17

1. Where was your business 3 years ago?
2. Where is your business today?
3. Which way is your business currently moving?

Question 18

What quadrant of the performance matrix are you in if you have high organizational health and operating performance?

Answer 18

Quadrant 1: Desired state

Question 19

What quadrant of the performance matrix are you in if you have high organizational health and low operating performance?

Answer 19

Quadrant 2: Complacent organization

Question 20

What quadrant of the performance matrix are you in if you have low organizational health and high operating performance?

Answer 20

Quadrant 3: Troubled organization

Question 21

What quadrant of the performance matrix are you in if you have low organizational health and operating performance?

Answer 21

Quadrant 4: Crisis

Question 22

How does the output of the performance matrix help strategy formulation?

Answer 22

1. If in quadrant 1, the firm should focus on looking into the future
2. If in quadrant 2, there may be recognition that change is needed but people may not want to face changes to increase performance and getting a strategy review may be difficult
3. If in quadrant 3, you may be doing more work with fewer people leaving everyone burnt out. May need to give thought to employee skills or work processes
4. If in quadrant 4, you need immediate and comprehensive action implemented quickly

Question 23

What are the four basic functions of a general manager as it applies to strategy?

Answer 23

1. Setting direction
2. Assessing performance
3. Creating strategy
4. Implementing change

Question 24

Which of the four basic functions of a general manager should be used as a starting point for strategic management analysis and why?

Answer 24

Assessing performance is the starting point because it tells you where you are and how bad the situation is

Question 25

What is included under the assessing performance function of the general manager?

Answer 25

1. Understanding how the company is really doing
2. Operating performance - scorecarding, profitability, etc
3. Organizational health
   Leads into performance matrix, lets you know how urgent it is for you to act

Question 26

What is included under the setting direction function of the general manager?

Answer 26

1. Creation of a mission and vision to solidify the purpose of the business, its reason for being
2. Creating values which express the basic beliefs that govern the group and shape how the vision is reached

Question 27

What is included under the creating strategy function of the general manager?

Answer 27

1. Choosing a solution from a number of alternatives
   May be performed through Diamond-E analysis

Question 28

What is included under the implementing change function of the general manager?

Answer 28

1. How they implement the chosen strategy