In an effective balanced scorecard, ________.
A) net income serves as the best indicator for the hard-to measure long-run operational performance
B) the sales budget serves as one of the leading indicator for the hard-to measure short-run financial performance
C) the sales budget serves as a leading indicator for the hard-to measure short-run nonfinancial performance
D) customer satisfaction serves as one of the leading indicator for the hard-to measure long-run financial performance such as the likelihood of higher sales and income

Question

Quizplus · Accepted Answer

In an effective balanced scorecard, customer satisfaction serves as one of the leading indicators for the hard-to-measure long-run financial performance such as the likelihood of higher sales and income. The scorecard should include a mix of financial and nonfinancial metrics, where financial metrics such as net income may serve as indicators for short-term financial performance, while nonfinancial metrics such as customer satisfaction can provide insights into long-term financial performance. The sales budget may serve as an indicator for short-term financial performance, but is not necessarily a leading indicator for nonfinancial performance. Therefore, option D is the best choice.

In an Effective Balanced Scorecard, ________