Question 1

1. Performance measurement systems are used to evaluate efficiencies and performance as the basis for rewards. Compare and contrast four characteristics of the traditional functional-based (responsibility centre) performance-based measurement system (chapter 13) with that of the strategic-based performance measurement system (chapter 16).
2. Briefly describe the following types of pricing strategies and give an example of when organisations will use each pricing strategy:

• Price skimming
• Penetration pricing
• Value-based pricing strategy
• Premium pricing
• Economy pricing
• Psychological pricing

3. Briefly describe the purposes of the four strategic management processes.
4. The four perspectives of the Balanced Scorecard define the strategy of an organisation and provide the structure or framework for developing an integrated, cohesive set of performance measures. Once developed, these measures become the means for organisations to articulate and communicate their strategy to their employees and managers. The measures also serve the purpose of aligning individual objectives and actions with organisational objectives and initiatives.
   1. Describe the financial perspective, including its objective, strategic themes and linkage to other three perspectives.
   2. Describe the customer perspective, including the five key core objectives and possible core measures for each objective.
   3. Describe the internal process perspective, including the four value-creating processes.
   4. Describe the learning and growth perspective, including its three major objectives and at least one outcome measurement for each of these objectives.