Business Performance Management Balanced Scorecard Framework 1 — Questions and Answers
Question 1: Who developed the Balanced Scorecard framework?
- Peter Drucker and Henry Mintzberg
- Robert Kaplan and David Norton (Correct answer)
- Michael Porter and Gary Hamel
- W. Edwards Deming and Joseph Juran
Correct answer: Robert Kaplan and David Norton
Robert Kaplan and David Norton introduced the Balanced Scorecard in a 1992 Harvard Business Review article.
Question 2: Which of the four Balanced Scorecard perspectives asks 'How do we look to shareholders?'
- Customer perspective
- Internal process perspective
- Learning and growth perspective
- Financial perspective (Correct answer)
Correct answer: Financial perspective
The financial perspective evaluates performance from the shareholder's viewpoint, focusing on profitability, revenue growth, and cost efficiency.
Question 3: What is the primary advantage of the Balanced Scorecard over purely financial performance measurement?
- It eliminates the need for financial reporting
- It incorporates non-financial drivers that lead to future financial success (Correct answer)
- It simplifies reporting to a single composite score
- It replaces the need for strategic planning
Correct answer: It incorporates non-financial drivers that lead to future financial success
The Balanced Scorecard complements financial measures with non-financial perspectives like customer satisfaction and internal processes that drive future performance.
Question 4: In the Balanced Scorecard, the 'Learning and Growth' perspective focuses on:
- Customer retention strategies
- Employee capabilities, culture, and technology infrastructure (Correct answer)
- Supply chain efficiency improvements
- Revenue diversification initiatives
Correct answer: Employee capabilities, culture, and technology infrastructure
The learning and growth perspective addresses the organizational capabilities — human capital, systems, and culture — needed to execute strategy.
Question 5: A 'strategy map' in the Balanced Scorecard context is used to:
- Plot geographic market expansion opportunities
- Visualize cause-and-effect relationships between strategic objectives across perspectives (Correct answer)
- Chart employee career development paths
- Map customer journey touchpoints
Correct answer: Visualize cause-and-effect relationships between strategic objectives across perspectives
A strategy map shows how objectives in each Balanced Scorecard perspective link together to create value and drive financial outcomes.
Question 6: Which Balanced Scorecard perspective asks 'To achieve our vision, how must we appear to our customers?'
- Financial perspective
- Internal process perspective
- Learning and growth perspective
- Customer perspective (Correct answer)
Correct answer: Customer perspective
The customer perspective focuses on how the organization delivers value to customers, including satisfaction, retention, and market share.
Business Performance Management Balanced Scorecard Framework 1
Who developed the Balanced Scorecard framework?