ITPEC IP April 2022 Question 83
Which of the following is an appropriate description concerning a balanced scorecard (BSC)?
Explanation
Converting vision and strategy into specific actions from the financial, customer, business process, and growth and learning viewpoints — the definition of the balanced scorecard.
The BSC (Kaplan and Norton) breaks a vision and strategy down into objectives, KPIs, targets and initiatives for each of the four viewpoints. They form a chain of cause and effect: growth and learning improves business processes, better processes satisfy customers, and satisfied customers produce financial results. "Balanced" means non-financial drivers are measured alongside financial outcomes.
Answer (a)
Why not others:
- •(b) — viewing procurement, development, manufacturing, sales and service as a chain that adds value and cost is value chain analysis (Porter)
- •(c) — finding the combination of products and businesses that distributes management resources most effectively is PPM (product portfolio management)
- •(d) — evaluating strengths, weaknesses, opportunities and threats is SWOT analysis
Key rule: The BSC measures strategy from four viewpoints, three of them non-financial, so that the drivers of future results are managed and not only past financial figures.
Business Strategy Management · AI-written, may contain errors
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