Accounting: Performance Measurement

QUESTIONS (read article below before answering questions):

1. What are some performance measures we could set for each team (Technology, Education, and Digital)?

2. How can we ensure collaboration among the three teams?

3. How can we improve the structure of the organisation?

4. Is the accountant right in classifying all three teams as profit centres? Why or why not? (types of centres: cost, revenue, profit, and investment)

Article:

Mooz Learning Technologies (Mooz) was commenced by Bekkah Selwood. Bekkah had a background in education. Following some changes in circumstances she needed to operate more from her home office; which led to the creation of Mooz. Mooz is developing into an innovative technology company that provides a platform for the best-practice teaching videos and commentary/advice to teachers ands educators. Its strategy is focussed around being the number one enabler of teaching best-practice using a visual medium: videos, recordings and commentary. The platform has developed to the point now where some of the videos are posted by teachers, while others are commissioned by Bekkah herself. Bekkah also provides some of the hardware necessary to facilitate high-quality video production. Best-practice videos now cover primary, secondary and tertiary educational settings; although Bekkah is finding the demands of each of these three settings are becoming more different from each other. Revenue is generated by advertising on the platform, as well as a growing subscription service that offers premium-content.

Changes at Mooz

Bekka has identified some new opportunities, particularly around digital technologies and education. She has been working with a digital designer and programmer to develop a platform service to facilitate online teaching. Moreover, more videos and recordings are becoming available. There is increasing interest in the products and services of Mooz. The number of queries from advertising agents is increasing and quarterly sales revenue is growing rapidly.

Bekkah has decided to restructure and establish three small separate divisional work-units of Mooz (see Exhibit A for a first draft of the new structure). The Technology Unit would focus on the adoption of innovative technology for the Mooz platform, as well as assisting with the production of videos. Bekkah is hoping that the Technology Unit would be able to sell its services externally to other organisations. TheEducation Unit would focus on developing content both inhouse and in collaboration with teachers and educational professionals. The Digital Online Platform Unit would work on the development of a new online learning platform, which she hoped would build-on the existing technologies like Skype.

Bekkahs accountant friend tells her these three work-units are like profit centres; so, he would start on developing some key performance metrics. Bekkah thinks this seems fine; she is more worried about getting them all to work together. She believes that going forward it will be necessary to have a collaborative work culture within the organisation.

Bekkah has made it clear that she is: . more worried about getting them [the new divisions] all to work together. She believes that going forward, it will be necessary to have a collaborative work culture within the organisation.

Exhibit A: Mooz Learning Technologies Structure CEO: Bekkah Centralised services Research and Development Finance and Operations Business Development and Marketing Sales and Customer Support Divisional Units Technology Unit Education Unit Digital Online Platform Unit Exhibit A: Mooz Learning Technologies Structure CEO: Bekkah Centralised services Research and Development Finance and Operations Business Development and Marketing Sales and Customer Support Divisional Units Technology Unit Education Unit Digital Online Platform Unit