Chapter 12: Measurement and Knowledge Management for Performance Excellence
TRUE/FALSE
1. An emphasis on machine utilization in an organization encourages having fewer, but larger,
general-purpose machines, which results in decreased inventory and throughput time.
2. The purpose of the balanced scorecard is “to translate strategy into measures that uniquely
communicate your vision to the organization.”
3. A good balanced scorecard contains only leading measures and indicators.
4. Leading indicators of a balanced scorecard represent long-term results.
5. Workforce-focused outcomes used for performance measurement in the Baldrige criteria show how
well the organization has created and maintained a productive, engaging, and caring work
environment.
6. Financial measures of performance measurement in the Baldrige criteria are generally tracked by
senior leadership to gauge overall organizational performance and are often used to determine
incentive compensation for senior executives.
7. A balanced scorecard greatly helps in identifying the real drivers of customer satisfaction.
8. An organization must align its performance measurement system to its vision and strategy and select
meaningful measurements.
9. Setting targets for each performance measure provides the basis for strategy deployment.
10. Google is one of the most prominent vendors for ERP software.
11. Interlinking is the term that describes the quantitative modeling of cause-and-effect relationships
between performance measures, such as the customer satisfaction and product quality or employee
performance.
12. Data mining is the most effective method of establishing cause and effect relationship among
variables.
13. Performance reviews in an organization are usually conducted on a daily or weekly basis for long-term
control decisions, and periodically throughout the year for short-term decisions and improvement.
14. Measurement reliability in manufacturing demands careful attention to metrology, the science of
measurement.
15. A useful approach to ensuring data reliability is for internal cross-functional teams or external auditors
to conduct periodic audits of the processes used to collect the data.
16. The quality of information can be improved by capturing data multiple times and as away from the
origin of the data as possible
17. Data accessibility empowers employees and encourages their participation in quality improvement
efforts.
18. Organizations that share quality, customer satisfaction, and financial performance results with its
employees and customers often exhibit poor performance in comparison with organizations which do
not share such information.
19. Leading organizations continually improve their performance measurement systems, staying abreast of
new techniques.
20. Confidentiality and security are critical in managing data, particularly with the increasing use of
electronic data transfer.
21. Physical and financial assets have become more important than knowledge assets in many
organizations.
22. Compared to money, labor, and capital equipment, knowledge is always the easiest to manage.
23. An effective knowledge management system should include a common framework for managing
knowledge and some way of validating and synthesizing new knowledge as it is acquired.
24. The transfer of knowledge within organizations and the identification and sharing of best practices
often set high-performing organizations apart from the rest.
25. The American Productivity and Quality Center (APQC) noted that executives have long felt frustrated
by their inability to identify or transfer outstanding practices from one location or function to another.
26. A knowledge-enabled culture is created when an organization employs a system of aligned human
resource policies, tactics, processes, and practices that ensure knowledge is created, captured, used,
and reused to achieve superior organizational results as a sustainable advantage.
MULTIPLE CHOICE
1. To achieve a high level of performance excellence, an organization requires a much broader set of
performance measures that are aligned to an organization’s strategy; this became known as the:
a.
quality trilogy.
b.
balanced scorecard.
c.
quincunx.
d.
Taguchi loss function.
2. Who among the following first developed the concept of a balanced scorecard?
a.
Edwards Deming
b.
Art Schneiderman
c.
Joseph Juran
d.
Kaoru Ishikawa
3. Which of the following perspectives of the balanced scorecard measures the ultimate results that the
business provides to its shareholders?
a.
Financial perspective
b.
Internal perspective
c.
Innovation perspective
d.
Customer perspective
4. Which of the following perspectives of the balanced scorecard includes profitability, revenue growth,
return on investment, economic value added (EVA), and shareholder value?
a.
Internal perspective
b.
Learning perspective
c.
Customer perspective
d.
Financial perspective
5. Which of the following perspectives of the balanced scorecard includes such measures as quality
levels, productivity, cycle time, and cost?
a.
Innovation perspective
b.
Customer perspective
c.
Internal perspective
d.
Financial perspective
6. Which of the following perspectives of the balanced scorecard focuses on market share?
a.
Internal perspective
b.
Customer perspective
c.
Innovation perspective
d.
Learning perspective
7. Which of the following perspectives of the balanced scorecard include service levels, satisfaction
ratings, and repeat business?
a.
Internal perspective
b.
Financial perspective
c.
Customer perspective
d.
Innovation perspective
8. Which of the following perspectives of the balanced scorecard directs attention to the basis of a future
success —the organization’s people and infrastructure?
a.
Innovation and learning perspective
b.
Customer perspective
c.
Financial and internal perspective
d.
Internal perspective
9. Which of the following perspectives of the balanced scorecard includes intellectual assets, employee
satisfaction, market innovation, and skills development?
a.
Financial and internal perspective
b.
Internal perspective
c.
Innovation and learning perspective
d.
Customer perspective
10. _____ balanced scorecard is the only version of performance measurement systems that have emerged
as organizations recognized the need for a broad set of performance measures that provide a
comprehensive view of business performance.
a.
Kaplan and Nortan’s
b.
Raytheon’s
c.
Deming’s and Juran’s
d.
Schneiderman’s
11. Which of the following measures of the Baldrige criteria of performance measurement includes
internal quality measurements, defect levels, service errors, and response times?
a.
Governance outcomes
b.
Product outcomes
c.
Market outcomes
d.
Financial outcomes
12. Which of the following measures of the Baldrige criteria of performance measurement includes
revenue, return on equity, return on investment, and operating profit?
a.
Workforce focused outcomes
b.
Leadership outcomes
c.
Governance outcomes
d.
Financial outcomes
13. With respect to the Balrige criteria performance measures, _____ performance indicators include
measures of business growth and percentage of new product sales.
a.
marketplace
b.
leadership
c.
governance
d.
process-based
14. Which of the following is true about the practical guidelines suggested by Mark Graham Brown for
designing a performance measurement system?
a.
Concentrate on measuring a large number of trivial variables.
b.
Avoid changing and adjusting measures even if the environment and strategy changes.
c.
Measures should be based around the needs of customers, shareholders, and other
key stakeholders.
d.
Measures should start at the bottom and flow up to all levels of top management in the
organization.
15. _____ systems are software packages that integrate organizational information systems and provide an
infrastructure for managing information across the organization.
a.
Enterprise resource planning
b.
Balanced scorecard
c.
Juran’s quality trilogy
d.
Quincunx experimental
16. Which of the following organizations is one of the most prominent vendors of ERP software?
a.
STMicroelectronics
b.
Convergys
c.
Oracle
d.
Analog devices
17. _____ systems allow organizations to share databases in a networking environment and store and
process key data in a unique database, and distribute it to a large group of users.
a.
Juran’s quality trilogy
b.
Quincunx experimental
c.
The balanced scorecard
d.
Enterprise resource planning
18. _____ refers to an examination of facts and data to provide a basis for effective decisions.
a.
Analysis
b.
Data warehousing
c.
Interlinking
d.
Clustering
19. Pal’s Sudden Service uses an automated data collection, integration, and analysis system called _____
to generate store-level and companywide reports on sales.
a.
SysDine
b.
Knowledge Network
c.
Quincunx
d.
eTracker
20. _____ is the term that describes the quantitative modeling of cause-and-effect relationships between
performance measures, such as the customer satisfaction and product quality or employee
performance.
a.
Programming
b.
Mining
c.
Interlinking
d.
Enterprise resource planning
21. _____ of product and service performance and customer indicators is a critical management tool for
defining and focusing on key quality and customer requirements, identifying product and service
differentiators in the marketplace, and determining cause-effect relationships between product and
service attributes and measures of customer satisfaction and loyalty.
a.
Regression analysis
b.
Benchmarking
c.
Correlation analysis
d.
Quincunx experimentation
22. Data _____ is the process of searching large databases to find hidden patterns in data.
a.
mining
b.
interlinking
c.
planning
d.
benchmarking
23. Which of the following is most likely to be used to obtain comparative data?
a.
Interlinking approach
b.
Cluster analysis
c.
Benchmarking approach
d.
Cause-and-effect approach
24. Which of the following analytical approach or technology is most likely to be used for data mining?
a.
Histogram
b.
Pareto diagram
c.
Quincunx experiment
d.
Fuzzy logic
25. _____ data refer to industry averages, competitor performance, world-class benchmarks, or
performance measures of other organizations with similar product offerings.
a.
Cross-functional
b.
Comparative
c.
Reviewed
d.
Interlinked
26. In the context of managing information resources, the quality of information can be improved by:
a.
avoiding electronic data capture.
b.
placing accountability on the creators of data and information.
c.
using multiple databases whenever feasible.
d.
using as many intermediaries as possible to handle data.
27. _____ assets refer to the accumulated intellectual resources that an organization possesses, including
information, ideas, learning, understanding, memory, insights, cognitive and technical skills, and
capabilities.
a.
Personal
b.
Knowledge
c.
Strategical
d.
Deployment
28. _____ knowledge includes information stored in documents or other forms of media such as
databases, policies and procedures, and technical drawings.
a.
Tacit
b.
Allusive
c.
Explicit
d.
Indirect
29. _____ knowledge is easily captured, stored, and disseminated using computer technology.
a.
Explicit
b.
Indirect
c.
Tacit
d.
Allusive
30. _____ knowledge is information that is formed around intangible factors resulting from an
organization’s or individual’s experience, and is content-specific.
a.
Lucid
b.
Definitive
c.
Tacit
d.
Explicit
31. _____ involves the process of identifying, capturing, organizing, and using knowledge assets to create
and sustain competitive advantage.
a.
Knowledge mining
b.
Suboptimization
c.
Knowledge management
d.
Lean production
32. The ability to identify and transfer best practices within the organization is sometimes called _____.
a.
enterprise resource planning
b.
interlinking
c.
internal benchmarking
d.
data mining
33. The process in which locations, divisions and functions in an organizational structure focus on
maximizing their own accomplishments and rewards was called _____ by Deming.
a.
suboptimization
b.
return on quality
c.
Interlinking
d.
lean production
34. _____ involves the discovery, learning, creation, and reuse of knowledge that eventually becomes
intellectual capital—knowledge that can be converted into value and profits.
a.
Knowledge costing
b.
Knowledge internationalization
c.
Rapid knowledge transfer
d.
Knowledge interlinking
ESSAY
1. List the reasons for which organizations need good performance measures.
2. Describe significance of the leading and lagging measures in the context of a balanced scorecard.
3. List the purposes of a performance measurement system.
ANS:
4. Why do managers review performance results in an organization?
ANS:
5. What must be included in an effective knowledge management system?
CASE
1. What makes it complex for the U.S. Postal service to balance the interests of its stakeholders?
2. What led to the creation of “customer perfect!” in postal services?
3. What served as the beginning of the balanced scorecard approach in the postal service?
4. Discuss the focus of the voice of the employee, voice of the business, and the voice of the customer.
5. List the four perspectives of Kaplan and Nortan’s balanced scorecard.
6. How are the elements in the balanced scorecard linked to support the strategic objectives of the postal
services?
7. Discuss the results of the rigorous performance review process developed by the Postal Service for
achieving the targets set.
8. What is the result of the improvements in the workplace and the aggressive implementation of
automation in the U.S.Postal services?
9. Convergys has its world headquarters at:
a. Sacramento.
b. Cincinnati.
c. Phoenix.
d. Oklahoma.
10. What are the factors contributing to the rapid and dynamic maturity of the outsourced customer service
industry?
11. What is the vision statement of Convergys which went through a series of acquisitions that number
more than 20 in the last 20 years?
12. What is the two-step approach followed by Convergys to deploy continuous improvement (CI) as a
key part of the company’s culture and achieve its vision?
ANS:
13. Describe the CI portal tool used by Convergys to get all their employees involved in improving the
business.
14. What is the purpose of the Best Practices Knowledgebase introduced by Convergys to the CI portal?
15. Discuss CI tools.