Question 1

Which of the following is most appropriate as an objective of a not-for-profit organisation?

Accepted Answer

To make efficient use of resources

Answer

To maximise shareholder wealth

Answer

To achieve long term growth in earnings

Answer

To minimise input costs

Question 2

Value for money is an important objective for not-for-profit organizations Which of the following actions is consistent with increasing value for money?

Accepted Answer

Decreasing waste in the provision of a service by the not-for-profit organization

Answer

Focusing on meeting the financial objectives of the not-for-profit organization

Answer

Using a cheaper source of goods and thereby decreasing the quality of non-for-profit organization services

Answer

Searching for easy ways to diversify the finances of the not-for-profit organization

Question 3

Value for money is an important objective for not-for-profit organisations. Which action is LEAST consistent with increasing value for money?

Accepted Answer

Searching for ways to diversify the finances of the not-for-profit organisation

Answer

Focusing on meeting the objectives of the not-for-profit organization

Answer

Decreasing waste in the provision of a service by the not-for-profit organisation

Answer

Using a cheaper source of goods without decreasing the quality of not-for-profit organisation services

Question 4

In the context of managing performance in 'not for profit' organisations, which of the following definitions is INCORRECT?

Accepted Answer

Efficiency means doing things quickly: minimising the amount of time that is spent on a given activity

Answer

Value for money means providing a service in a way which is economical, efficient and effective

Answer

Effectiveness means doing the right things: spending funds so as to achieve the organisation's objectives

Answer

Economy means doing things cheaply: not spending $2 when the same thing can be bought for $1

Question 5

The degree to which a predetermined objective or target is met is known as ________.

Accepted Answer

effectiveness

Answer

efficiency

Answer

economy

Answer

variance

Question 6

Efficiency is ________.

Accepted Answer

the relative amount of inputs used to achieve a given output level

Answer

the degree to which a predetermined objective or target is met

Answer

the continuous process of comparing a firm's performance levels against the best levels of performance in competing companies

Answer

the difference between an actual input quantity and a budgeted input quantity

Question 7

A school decides to have larger classes and examination results suffer as a result. In terms of the ‘value for money’framework, which one of the following statements is true?

Accepted Answer

Efficiency has increased but effectiveness has decreased

Answer

Economy has increased but efficiency has decreased

Answer

Economy has increased, but efficiency and effectiveness have decreased

Answer

Economy has increased but effectiveness has decreased

Question 8

Which of the following is an ‘efficiency’ target that a not-for-profit organization might put in place?

Accepted Answer

Staff productivity

Answer

Negotiation of bulk discounts

Answer

Customer satisfaction ratings

Answer

Pay rates for staff of appropriate levels of qualification

Question 9

The JUTC (bus company) is planning on using VFM. The JUTC could measure efficiency with all the following measures EXCEPT:

Accepted Answer

Percentage of customers satisfied with cleanliness of buses

Answer

Utilisation rate for buses (utilisation rate = hours on the road/total hours available)

Answer

Occupancy rate of buses

Answer

Utilisation rate for drivers

Question 10

The JUTC (bus company) is planning on using VFM. The JUTC could measure effectiveness with all the following measures EXCEPT:

Accepted Answer

The number of passengers per bus

Answer

Percentage of customers satisfied with cleanliness of buses

Answer

Percentage of on time arrivals

Answer

Percentage of carbon emissions relative to target set

Question 11

Which of the statement below is NOT a benefit of league tables:

Accepted Answer

There is the danger than management will focus on some areas to the detriment of others

Answer

The use of a single figure gives a clear and immediate answer to the question of performance

Answer

It can indicate areas of best practice leading to improve performance

Answer

It benchmarks performance which can have a positive effect on behaviour

Question 12

Which of the following is NOT a drawback of league tables

Accepted Answer

It can indicate areas of best practice leading to improve performance

Answer

Comparable information may be difficult to obtain.

Answer

The best performance based on the league table may be below the best performance in the industry or worldwide(best in class)

Answer

It may be time consuming

Answer

It may be unfair, judging individuals on areas outside their control

Question 13

All the statements below explain why non-financial indicators are particularly useful for public sector organisations EXCEPT:

Accepted Answer

Defining a cost unit is fairly easy .

Answer

Lack of profit motive or measure

Answer

Difficulty in defining a suitable financial measure

Answer

Multiple objectives (which to prioritize)

Question 14

All the following are weaknesses with financial performance indicators EXCEPT:

Accepted Answer

Provide better information about key areas such as quality, customer satisfaction, employees

Answer

Focus only on variables which can be expressed in monetary terms ignoring other important variables which cannot be expressed in monetary terms

Answer

Focus on historic perspective

Answer

Focus on the short term

Answer

Measure success but do not measure the factors that ensure success; a business's critical success factors

Answer

Do not convey the full picture of a company's performance in a modern business environment eg. quality, customer satisfaction

Question 15

In the context of branding which of the statements is FALSE?

Accepted Answer

Branding is not part of the competitive advantage of a business

Answer

Brand awareness is an indicator of the strength of a product’s/organisation’s place in the customers’ minds

Answer

Loyalty results in repurchase and continued use of the products

Answer

Brand identity quickly conveys an image of quality and price that helps customers to identify the products and so helps to create customer loyalty to the brand.

Question 16

Brand awareness is difficult to measure. However, the options below can be used EXCEPT:

Accepted Answer

The amount of money spent on marketing

Answer

Surveys

Answer

Social media rankings and interactions

Answer

Very crudely through the revenue and market share that the enjoys

Question 17

Brand loyalty can be measured using the options below EXCEPT:

Accepted Answer

Through price reductions

Answer

The percentage of customers that recognize the brand name

Answer

The ability of a brand to be able to push through price increases with little loss of demand (price elasticity of demand)

Answer

Size of profit margins compared to other companies that make similar products but without such a strong brand

Question 18

Brands are increasingly important in conveying information about products and services to customers. Which statement below is FALSE?

Accepted Answer

Branding is not linked to differentiation .

Answer

Branding could make it easier for a company to launch new products

Answer

Branding could increase switching costs

Answer

Branding can create customer loyalty

Answer

Branding could reduce price comparisons

Question 19

Which of the following statements about non-financial performance indicators is FALSE?

Accepted Answer

NFPIs are not open to manipulation unlike like FPIs

Answer

Can be quantitative or qualitative.

Answer

Information can be provided quickly for managers (eg. per shift, daily or hourly) unlike traditional financial performance reports.

Answer

NFPIs are more susceptible to manipulation due to the subjective nature of these metrics

Answer

Provide better information about key areas such as quality, customer satisfaction, employees.

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