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ACCA Strategic Professional · Advanced Performance Management · Non-financial performance measurement

Brennan Retail's scorecard shows falling staff skills scores and a rising employee turnover rate. Under Kaplan and Norton's cause-and-effect logic, which sequence best describes the likely downstream effect if left unaddressed?

Weaker learning and growth feeds through to poorer internal process quality, then lower customer satisfaction, and finally weaker financial results. The scorecard's causal chain runs from learning and growth upward to financial outcomes, not the other way round.

  1. ALower financial returns first, then weaker customer satisfaction, then weaker internal processes, then lower staff skills
  2. BWeaker internal process quality, then lower customer satisfaction, then weaker financial resultsCorrect
  3. CLower customer satisfaction, then stronger internal processes, then weaker financial results
  4. DWeaker financial results, then lower customer satisfaction, then weaker internal processes

Explanation

Learning and growth drives internal business processes, which drive customer outcomes, which in turn drive financial results. Option A reverses the chain and C wrongly has internal processes improving. D also reverses the causal direction.

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