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41 Cards in this Set

  • Front
  • Back
An organization's intangible assets include:
-loyal and profitable customer relationships
-High-quality processes
-Innovative products and services
-Employee skills and motivation
-Databases and information systems
Provides a system for measuring and managing all aspects of a company's performance
The Balanced Scorecard (BSC)
Balances traditional financial measures of success, such as profits and return on capital, with non-financial measures of the drivers of future financial performance
The Balanced Scorecard (BSC)
Measures organizational performance across different perspectives
The Balanced Scorecard (BSC)
Four different but linked perspectives:
-Learning and Growth
How is success measured by shareholders?
How do we create value for customers?
At what internal processes must we excel to pacify customers and shareholdlers?
Learning and Growth
What employee capabilities, information systems, and organizational climate do we need in order to continually improve internal processes and customer relationships?
Provides a visual representation of the linkages in the four perspectives of the BSC
Strategy map
Learning and Growth Perspective
Employees' Process Improvement Skills
Internal Perspective
Process Qualit; Cycle Time

On-Time Delivery
Customer Perspective
Customer Loyalty
Financial Perspective
Return on Investment
A widely recognized measure of financial success; repeated and expanded sales from existing customers, the result of a high degree of loyalth among existing customers, could be one driver of this financial measure
Return on investment (ROI)
Short cycle times and high-quality production processes are two processes of?
On-Time Delivery
It identifies and makes explicit the hypotheses about the cause and effect relationships between:
The Balanced Scorecard (BSC); outcome measures in the Financial and Customer perspectives; and the performance drivers oft hose outcomes that are measured int he Internal and Learning and Growth perspectives
Increase revenues through expanded sales to existing customers
Financial perspective
Become service oriented
Customer perspective
Achieve excellence in order fulfillment through continuous process improvements
Internal perspective
Align employee incentives and rewards with the strategy
Learning and Growth perspective
Establish the level of performance or rate of improvement required for a measure; should be set to represent excellent performance
The short-term programs and action plans that will help achieve the stretch targets established for its measures
Vision =
External POV
Mission Statement =
Internal POV
Mission + vision =
Selecting the set of activities in which an organization will excel to create a sustainable difference in the marketplace
Sustainable difference may be to:
-Deliver greater value to customers than competitors
-Provide comparable value at a lower price than competitors
Indicate whether the company's strategy, implementation, and execution are contributing to bottom-line improvement
Financial performance measures
A company's financial performance can be improved in two ways:
Revenue growth and increased productivity
Companies generate revenue growth by:
-Selling new products
-Selling to new customers
-Selling in new markets
Increased productivity occurs by:
Lowering direct and incirect expenses; Utilizing their financial and physical assets more efficiently
Managers identify the targeted customer segments in which the business unit competes and the measures of the business unit's performance in these targeted segments
Customer Perspective
A unique mix of product, price, service, relationship, and image offered to the targeted customers
Defines the comany's strategy; Should communicate what the company expects to do for its customers better or differently from its competitors
The basic, day-to-day process by which companies produce their existing products and services and deliver them to customers
Operating Processes
Process by which companies expand and depend on relationships with targeted customers
Customer management process
Process by which companies develop new products, processes, and services, often enabling the company to penetrate new markets and customer segments
Innovation Process
Process by which companies ensure that they meet or exceed regulations on business practices
Regulatory and Social Processes
Identifies how executives mobilize their intangible assets (human, information, and organization) to drive improvement in the internal processes most important for implementing their strategy
The Learning and Growth Perspective
BSC developed from
A performance measurement system to a new strategic management system
5 Principles for Becoming Strategy-Focused
1. Translate the Strategy to Operational Terms
2. Allign the Organization to the Strategy
3. Make Strategy Everyone's Job
4. Make Strategy a Continual Process
5. Mobilize Leadership for Change