Highland State Company provides cable and Internet services in Barcelona. There are many competitors that provide similar services. Highland State believes that the key to financial success is to offer a quality service at the lowest cost. Highland State currently spends a significant number of hours on installation and post-installation support. This is one area that the company has targeted for cost reduction. Highland State’s balanced scorecard for 2020 follows.

Required

1. Was Highland State successful in implementing its strategy in 2020? Explain.

2. Do you agree with Highland State’s decision to include measures of developing innovative services (research and development costs) in the internal-business-process perspective of the balanced scorecard? Explain briefly.

3. Is there a cause-and-effect linkage between the measures in the internal-business-process perspective and the customer perspective? That is, would you add other measures to the internal-business process perspective or the customer perspective? Why or why not? Explain briefly.

4. Why do you think Highland State included balanced scorecard measures relating to employee safety and community engagement? How well is the company doing on these measures?

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Objectives Financial Perspective Increase shareholder value Customer Perspective Increase customer satisfaction Increase customer acquisition Increase installation efficiency Increase community involvement Decrease workplace injuries Internal-Business-Process Perspective Develop innovative services Learning-and-Growth Perspective Increase employee competence Increase leadership skills Increase employee safety awareness Measures Operating-income changes from productivity Operating-income changes from growth Increase in revenue from new customer acquisition Positive customer survey responses New customers acquired through company sponsored community events Research and development costs as a percentage of revenue Installation time per customer Number of new programs with community organizations Number of employees injured in the workplace Number of annual training-hours per employee Number of leadership workshops offered Percent of employees who have completed safety certification training Actual Target Performance Performance $1,200,000 $260,000 $25,000 70% 475 5% 5 hours 12 3 10 2 100% $400,000 $125,000 $12,000 65% 350 6% 4.5 hours 15 7 11 1 95%