Term
| Why does a company need well formulated strategy? |
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Definition
| Without a strategy, businesses won’t know how to address alternative courses of action. No way to allocate resources for a plan. Difficult to capitalize on the opportunities. |
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Term
| What is business performance management? |
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Definition
| Set of analytical business process that analyzes the business processes, methodologies, metrics, and technologies used by enterprises to measure, monitor and manage the business performance. |
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Term
| What are the key elements of a diagnostic control system? |
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Definition
| Set goal in advance, measure outputs, compute or calculate absolute or relative performance variances, and use variance information as feedback to alter inputs to bring performance back in line with present goals and standards. |
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Term
| What are the basic tasks in the strategic planning process? |
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Definition
1. Conduct current situation analysis
2. Determine the planning horizon
3. Conduct environment scan
4. Identify critical success factors
5. Complete a gap analysis
6. Create strategic vision
7. Develop a business strategy |
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Term
| How does a KPI differ from an operational metric? |
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Definition
| KPI’s are the outcomes and operational metrics deals with the operational activities and performance of a company. |
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Term
| What are the components of business performance management? |
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Definition
1. Closed-loop management and analytical processes that is supported by technology that addresses financial and operational activities
2. Tools to define strategic goals and how to measure and manage performance goals
3. Core set of processes that is linked to the organizational strategy |
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Term
| What are some of the sources of the gap between formulating a strategy and actually executing the strategy? |
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Definition
1.Communication
a.Not everyone knows or understands it
2.Alignment of rewards and incentives
a.Related to short term financial results, not to strategic plan
b.Maximizing short term goals leads to less than rational decision making
3. Focus
a. Management spends time on periphery of issues than on the core elements
b. Too much time debating on budget than to the strategy
4.Resources
a. Poorly unfunded and resourced |
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Term
| What is management by exception? |
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Definition
| exception is bringing issues to the attention of management if results represent substantial differences from the budgeted or expected amount |
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Term
| What is Malcolm Baldrige Performance Excellence Program |
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Definition
| Program is an award for performance excellence while offering criteria, assessments, tools, training and a community for those dedicated to helping organizations improve. |
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Term
| What is one of the pitfalls of variance analysis, from a managerial perspective? |
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Definition
| if the costs are above the plan, they are told to stop spending. |
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Term
| What are the critical questions that a comprehensive monitoring framework should address? |
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Definition
| what to monitor and how to monitor. |
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Term
| What is a performance measurement system? |
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Definition
| compares actual results against strategic goals and objectives. |
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Term
| What is a balanced scorecard framework? |
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Definition
| a performance measurement and management methodology that helps an organization’s financial, customer, internal process and learning and growth objectives and targets into a set of actionable initiatives. |
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Term
| How is Malcolm Baldrige Performance Excellence Program related to Lean and Six Sigma? |
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Definition
| Note the systematic method by which the Baldrige-based culture of excellence is established, waste is eliminated from processes through Lean Thinking, processes are moved toward perfection using Six Sigma. |
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Term
| What type of organizations could apply for the Malcolm Baldridge Performance Excellence Program award? |
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Definition
| Education, Health Care, Manufacturing, Nonprofit/Government, Service, Small Business |
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Term
| According to Michael Hammer, what are the seven sins of performance measurement? |
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Definition
1. Vanity - on-time shipping
2. Provincialism – rewarding one dept while not the other
3. Narcissism - computer software company were to ship 9 of 10 components, giving itself a 90 percent score.
4. Laziness - speed of installation vs reliability of the service.
5. Pettiness - focused on reducing the number of OSHA-recordable accidents
6. Inanity – reduce waste by not cooking food until ordered, turning fast food to slow food
7. Frivolity – having too few metrics to measure |
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Term
| What are some of the drawbacks of relying solely on financial metrics for measuring performance? |
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Definition
| financial measures are reported by organizational structures not by the processes that produce them, financial measures are lagging indicators, doesn’t tell why it happened or likely to happen in the future, financial measures are not related to the underlying processes that generate them, and is focused on the short term and provide little information. |
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Term
| What does Michael Hammer recommend in order to have a good performance measurement system? |
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Definition
1. Select the right things to measure
2. Measure the right way
3. Embed those metrics for performance improvements
4. Create organization culture and value system that encourages the use of metric for ongoing performance |
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Term
| What is the criteria used for judging performance excellence? |
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Definition
1 Leadership
2 Strategic Planning
3 Customer Focus
4 Measurement, Analysis, and Knowledge Management
5 Workforce Focus
6 Operations Focus
7 Results |
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Term
| What is a KPI, and what are its distinguishing characteristics? |
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Definition
| represents a strategic objective and measures performance against a goal, it is multidimensional and has a variety of features: strategy’s, targets, ranges, encodings, time frames, and benchmarks. |
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Term
| What are balanced scorecard framework advantages? |
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Definition
1. Translates the strategy into measurable parameters
2. Everyone understands the strategy, goes from top down.
3. Aligns the individuals goals with the strategic goals |
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