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

Karvale Bank has set a scorecard objective of cutting loan approval time from 10 days to 3 days. Management believes this will raise customer satisfaction, which in turn will lift revenue per customer. Which feature of the balanced scorecard does this chain of reasoning best illustrate?

The scenario shows cause-and-effect linkages between scorecard perspectives, normally displayed in a strategy map. Faster approvals in the internal process perspective are expected to improve customer satisfaction, which then raises financial performance. The scorecard is meant to be a linked strategic system, not a set of isolated measures.

  1. ACause-and-effect linkages between perspectives, usually shown in a strategy mapCorrect
  2. BA set of unrelated measures reported separately by each department
  3. CThe use of lagging financial indicators only
  4. DBenchmarking against competitors' published results

Explanation

A core idea of the balanced scorecard is that measures in the process perspective drive customer outcomes, which in turn drive financial results. Mapping these links is the purpose of a strategy map. The other options describe features that are either not part of the scorecard approach or contradict it.

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