Chapter13Solutions-Hansen6e

Chapter13Solutions-Hansen6e - CHAPTER 13 THE BALANCED...

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CHAPTER 13 THE BALANCED SCORECARD: STRATEGIC-BASED CONTROL QUESTIONS FOR WRITING AND DISCUSSION 1. A strategic-based responsibility accounting system converts an organization’s mission and strategy into operational objectives and measures for four perspectives: the financial perspective, the customer perspective, the process perspective, and the learning and growth perspective. It differs from activity- based responsibility accounting because of the formal linkage to strategy and because it adds two perspectives to the responsibility dimension: the customer perspective and the learning and growth perspective. 2. A Balanced Scorecard is a strategic-based performance management system that translates an organization’s vision and strategy into operational objectives and mea-sures for four perspectives: financial, customer, process, and learning and growth. 3. Balanced measures mean that the strategic measures used are made up of a proper mix of integrated financial and nonfinancial measures that are both predictive and his- torical and which may be subjective or ob- jective in nature. 4. Lag measures reflect what has happened. Lead measures reflect what may happen. (They are performance drivers.) 5. Objective measures are quantifiable and verifiable. (Verifiable means that the values are the same from one person to the next.) Subjective measures are less quantifiable and judgmental in nature (indicating that their values can vary from one person to the next). 6. Stretch targets are targets that are set at levels that, if achieved, will transform the or- ganization within three to five years. Their strategic purpose is to bring the organization to the level envisioned by the strategy. 7. A strategic-based reward system is de- signed to encourage and support the imple- mentation of the organization’s strategy. Re- wards are offered for both financial and non- financial performance. (Traditional rewards are mostly tied to financial performance.) 8. The three strategic themes of the financial perspective are revenue growth, cost reduc- tion, and asset utilization. 9. The five core objectives of the customer perspective are market share, customer re- tention, customer acquisition, customer sat- isfaction, and customer profitability. 10. The long-wave of value creation means anti- cipating the emerging and potential needs of customers and creating new products and processes to satisfy those needs. The short- wave of value creation is producing and de- livering existing products to customers. 11. The three processes of the process value chain are the innovation process, the opera- tions process, and the post sales service process. The innovation process anticipates the emerging and potential needs of cus- tomers and creates new products and ser- vices to satisfy those needs. The operations process produces and delivers existing products and services to customers. The postsales service process provides critical and responsive services to customers after
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This note was uploaded on 04/08/2010 for the course ACCT 305 taught by Professor Zhou during the Spring '09 term at Binghamton University.

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Chapter13Solutions-Hansen6e - CHAPTER 13 THE BALANCED...

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