QUESTION 3

a) What are the essential characteristics of contemporary (modern) performance measurement systems?

b) Describe in detail the four key perspectives in the balanced scorecard?

c) This part of the question requires you to demonstrate how a strategy map be used in developing and testing an organisation's strategy. Firstly explain how a strategy map can be used in developing and testing an organisation's strategy.

Then, using the data provided below you should provide an example to illustrate your answer by indicating the measures (listed in alphabetical order below) that you would expect to see under each perspective in the company's balanced scorecard. Demonstrate your answer using a strategy map.

A company might compete and plan to grow by selling high quality products at a low price and delivering them to customers quickly after receiving customers' orders. There are many other manufacturers who produce similar products. The company believes that continuously improving its production processes and having satisfied employees are critical to implementing its strategy.

Cost reductions in key areas.

Customer satisfaction index.

Employee satisfaction ratings.

Market share in motor market

Number of new customers

On time delivery.

Operating profit from growth

Operating profit from productivity gain

Order delivery time

Percentage of employees trained in process and quality management

Productivity