1.

Question 1
How can predictive analytics improve performance measurement?
1 / 1 point
All answers are correct Correct
By increasing the organization’s understanding of the key performance drivers that should be
measured.
By assisting in weighing different performance measures based on their relative importance.
By enhancing the setting of performance targets.
Correct.

2.
Question 2
Which of the following is a key attribute of a causal business model?
0 / 1 point
A) It includes employee, customer, operational, and innovation measures. Incorrect
B) It is linked to the organization’s strategy.
C) It articulates the hypothesized drivers of financial performance.
Both A and C
Both B and C
A, B, and C are all correct Incorrect

3.
Question 3
Which of the following choices are important when designing statistical tests of a hypothesized causal
business model? (check all that apply)
0 / 1 point
The expected time lag between changes in nonfinancial performance and resulting changes in financial
performance (e.g., daily, monthly, yearly, etc.).
Correct
The unit of analysis (e.g., customers, employees, projects, product lines, locations, divisions, etc.).
Correct
The department responsible for conducting the analyses (e.g., finance, marketing, etc.).
This should not be selected
The desired economic outcomes (e.g., profits, revenue growth, contract renewal, retention, etc.).
Correct

4.
Question 4
Assume that measure A is expected to lead to improvements in measure B. If no statistically significant
relationship is found between the two performance measures, what could explain the insignificant
relationship?
1 / 1 point
A) Organizational barriers are preventing improvements in measure A from translating into
improvements in measure B.
B) Contrary to the company’s hypothesis, improvements in the performance dimension captured by
measure A do not lead to improvements in measure B.
C) Even though the performance dimension captured by measure A is actually a driver of measure B,
the method used to calculate measure A is bad (e.g., it uses too few scale points, the questions are
misleading, or it asks about performance dimensions that do not drive customers’ purchase behavior).
D) Either b or c could explain the insignificant relationship.
E) Either a, b, or c could explain the insignificant relationship. Correct

Correct

5.
Question 5
Why is the identification of non-linearities important for setting performance targets?
0 / 1 point
Managers do not understand the concepts of increasing or diminishing returns to improvements in
non-financial performance.
If improvements in a non-financial performance metric are characterized by diminishing returns to
scale (i.e., greater improvements yield increasing smaller or nonexistent financial returns), setting non-
financial performance targets that are too high can actually lead to lower profitability. Correct
It is never appropriate to maximize scores on non-financial metrics such as employee or customer
satisfaction.
Non-linear relationships between measures cannot be accommodated in statistical models. Incorrect

Incorrect

6.
Question 6
How can statistical analysis of the linkages between non-financial metrics and financial performance
be used to make better investment decisions?
0 / 1 point
The statistical analyses can ensure that the chosen investments in non-financial performance will
improve financial results Incorrect

The statistical analyses can replace the use of financial justification methods such as net present value
and payback period.
Managers can selectively use the information to financially justify any investment they want
The information can be used to forecast future cash flows from investments in non-financial
performance dimensions. Correct
Incorrect

7.
Question 7
Assume that three non-financial performance measures (denoted X, Y, and Z and all measured on ten-
point scales) are hypothesized to be drivers of future revenues. Statistical analysis reveals that a one-
unit increase in X has the largest impact on future revenues. If the company’s objective is increasing
overall profits, should it focus more effort on improving measure X than on improving measures Y and
Z?
1 / 1 point
A) Yes.
B) Maybe, but only after considering the difficulty of improving performance on X relative to the
difficulty of improving proving performance on Y or Z.
C) Maybe, but only after considering the cost to improve performance on X relative to the cost to
improve Y or Z.
D) Both B and C Correct

Correct

8.
Question 8
Which of the following is a common technical issue that makes it difficult to use analytics to link non-
financial metrics to financial performance?
1 / 1 point
The high cost of data storage.
The limited number of performance metrics that are tracked by most organizations
The difficulty in using statistical software packages.
Financial and non-financial data that reside in different databases that are incompatible (e.g., have
different coding structures, capture data in different levels of granularity, measure the same dimension
differently, etc.). Correct

Correct

9.
Question 9
Which of the following is NOT a common organizational issue that makes it difficult to use analytics to
link non-financial metrics to financial performance?
0 / 1 point
Organizational participants do not want to know the answers, which may contradict their intuition or
beliefs. Incorrect

Lack of resources and appropriate skill sets. Incorrect

Different parts of the organization do not want to share the data.
Most organizations do not care about non-financial performance.
Incorrect

10.
Question 10
Why should organizational mechanisms be established to ensure that ongoing analyses of the linkages
between non-financial metrics and financial performance are conducted?
0 / 1 point
All answers are correct.
Changes in competitive environments can make earlier analyses obsolete.
Performance metrics that previously were key drivers of financial performance may become less
important after the company has achieved its performance targets for those dimensions
Ongoing analysis and questioning of results can help refine strategies, actions, and measures by
revealing the lower-level root causes or drivers of performance. Incorrect

Incorrect