Multiple Choice Questions
1. Which of the following statements about the balanced scorecard is true?
a. The four perspectives of the balanced scorecard revolve around measures of quality, productivity, efficiency and timeliness, and marketing success.
b. The balanced scorecard approach requires looking at performance from four different but related perspectives: financial, customer, internal business, and learning and growth.
c. The balanced scorecard approach integrates financial and nonfinancial performance measures.
d. All of the above are true.

2. Which of the following is least likely to be a benefit of the balanced scorecard?
a. The approach helps balance short-term and long-term performance perspectives.
b. The approach combines financial and nonfinancial measures in a manner that provides a more balanced view of a company.
c. The approach combines financial and nonfinancial measures, but weighs the nonfinancial measures more heavily.
d. The approach often requires companies to design information systems that capture nonfinancial measures.

3. The efficient and effective use of employees is a measure of performance under which perspective of the balanced scorecard?
a. Financial
b. Customer
c. Internal business
d. Learning and growth

4. The number of warranty claims and returned products are measures of performance under which perspective of the balanced scorecard?
a. Financial
b. Customer
c. Internal business
d. Learning and growth

5. Which of the following is least likely to be a critical success factor within the internal business perspective of the balanced scorecard?
a. Increasing productivity
b. Decreasing productivity
c. Improving quality throughout the production process
d. Increasing efficiency and timeliness

6. Which balanced scorecard perspective addresses objectives across the company’s entire value chain: from research and development to post-sale customer service?
a. Financial
b. Customer
c. Internal business
d. Learning and growth

7. Which of the following statements about quality costs is true?
a. Both external and internal failure costs can be reduced (theoretically to zero) by paying more attention to quality issues early in the value chain.
b. Increasing expenditures related to prevention and appraisal can result in significant overall cost savings in the long run.
c. It may be prudent to increase expenditures in one or more areas in order to decrease other costs.
d. All of the above are true.