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PFMP · Question #220

The balanced scorecard approach uses a scoring process based on:

The correct answer is D. financial and non-financial component benefits. The balanced scorecard evaluates portfolio components across both financial and non-financial performance dimensions, providing a multi-perspective view of value and strategic contribution.

Portfolio Performance Management

Question

The balanced scorecard approach uses a scoring process based on:

Options

  • Areturn on investment and net present value.
  • Balignment to company strategy and financial benefits.
  • Cresource constraints and alignment to company strategy.
  • Dfinancial and non-financial component benefits.

How the community answered

(16 responses)
  • B
    6% (1)
  • C
    6% (1)
  • D
    88% (14)

Why each option

The balanced scorecard evaluates portfolio components across both financial and non-financial performance dimensions, providing a multi-perspective view of value and strategic contribution.

Areturn on investment and net present value.

Return on investment and NPV are exclusively financial metrics; using only these would contradict the balanced scorecard's defining characteristic of incorporating non-financial measures.

Balignment to company strategy and financial benefits.

Strategic alignment and financial benefits represent only two dimensions of the balanced scorecard and do not capture its full multi-perspective scoring methodology.

Cresource constraints and alignment to company strategy.

Resource constraints and strategic alignment are not the defining axes of the balanced scorecard; the framework is built on financial versus non-financial performance perspectives, not resource limitations.

Dfinancial and non-financial component benefits.Correct

The balanced scorecard framework, developed by Kaplan and Norton, scores components across financial and non-financial dimensions - including customer value, internal business processes, and organizational learning and growth - ensuring a holistic assessment that goes beyond purely monetary metrics.

Concept tested: Balanced scorecard financial and non-financial evaluation framework

Source: https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2

Topics

#Balanced Scorecard#Performance Measurement#Strategic Management#Portfolio Performance

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