Accounting Q&A · Cost and Management Accounting · Topic 20
Work through the questions, then reveal the answers to check your reasoning.
25 short-answer questions. Try each question before revealing its answer.
Worked example
A service team links staff training to first-contact resolution and customer retention. Track training completion as an input, resolution as an operating outcome, and retention as a later customer outcome.
Core concepts
1. What is strategic performance management?
Using objectives, measures and review routines to guide execution of strategy.
2. What is a balanced scorecard?
A set of linked measures covering financial results and factors expected to drive them.
3. What are the usual four perspectives?
Financial, customer, internal process, and learning and growth.
4. What does the financial perspective ask?
How the strategy affects financial outcomes such as profitability or cash flow.
5. What does the customer perspective ask?
How the organisation delivers value to its target customers.
6. What does the internal process perspective track?
Processes important to delivering the strategy.
7. What does learning and growth track?
Capabilities such as skills, systems and culture that support improvement.
8. What is a strategic objective?
A specific outcome the organisation wants to achieve.
9. How does a measure differ from a target?
A measure defines what is tracked. A target sets the desired level and date.
10. What is an initiative?
A project or action intended to improve performance against an objective.
Worked applications
11. What is a strategy map?
A diagram of proposed links among strategic objectives.
12. Why test a link in a strategy map?
A plausible relationship may fail in practice or be influenced by other factors.
13. Which perspective typically includes customer retention?
Customer, when retention represents customer value or loyalty.
14. Where might first-pass yield belong?
Internal process, when it measures process quality.
15. Where might employee certification belong?
Learning and growth, when certification supports required capability.
16. How do you measure first-contact resolution?
Divide issues resolved at first contact by eligible issues.
17. A team resolves 360 of 450 eligible cases on first contact. What is the rate?
80%.
18. If the target is 85%, what is the gap?
Five percentage points.
19. Why specify a baseline?
It shows the starting point and helps distinguish improvement from target attainment.
Review and exam practice
20. Why assign a measure owner?
Someone must maintain the definition, check the data and follow up on results.
21. Can the same metric be leading for one outcome and lagging for another?
Yes. Resolution is an outcome of service work and can precede customer retention.
22. What is a guardrail measure?
A metric that flags harm while another target is being pursued, such as quality while reducing time.
23. Why limit the number of measures?
A focused set makes it easier to see priorities and act on results.
24. What should be reviewed when a metric improves but strategy outcomes stall?
Check data quality, the assumed causal link, time lags and external changes.
25. What should a scorecard review produce?
A decision about corrective action, who owns it and when progress will be checked.