ACCT 241 PRINCIPLES OF MANAGERIAL ACCOUNTING

Spring 2016

Balanced Scorecard Project

The Eagle Consulting Group (ECG) helps companies build balanced scorecards. As part of its marketing efforts, ECG conducts an annual balanced scorecard workshop for prospective clients. As ECGs newest employee, your supervisor has asked you to participate in this years workshop by explaining to attendees how a companys strategy determines the measures that are appropriate for its balanced scorecard. Your supervisor has provided you with the excerpts below from the annual reports of two current ECG clients and has asked you to use these excerpts in your portion of the workshop.

Excerpt from Applied Chipware Applications annual report:

The keys to our business are consistent and timely new product introductions and manufacturing process integrity. The new product introduction side of the equation is a function of research and development (R&D) yield (e.g., the number of marketable chips for applications created relative to the total number of potential applications pursued). We seek to optimize our R&D yield and first-to-market capability by investing in state-of-the-art technology, hiring the highest possible percentage of the best and the brightest engineers that we pursue, and providing world-class training to those engineers. Manufacturing process integrity is all about establishing world-class quality specifications and then relentlessly engaging in prevention and appraisal activities to minimize defect rates. Our customers must have an awareness of and respect for our brand image of being first to market and first in quality. If we deliver on this pledge to our customers, then our financial goal of increasing our return on stockholders equity should take care of itself.

Excerpt from Beyond Resorts Internationals annual report:

Our business succeeds or fails based on the quality of the service that our front-line employees provide to customers. Therefore, it is imperative that we strive to maintain high employee morale and minimize employee turnover. In addition, it is critical that we train our employees to use technology to create one seamless worldwide experience for our repeat customers. Once an employee enters a customer preference (e.g., provide two extra pillows in the room, deliver fresh brewed coffee to the room at 8:00 A.M., etc.) into our database, our worldwide workforce strives to ensure that a customer will never need to repeat it at any of our worldwide destination resorts. If we properly train and retain a motivated workforce, we should see continuous improvement in our percentage of error-free repeat customer check-ins, the time taken to resolve customer complaints, and our independently assessed room cleanliness. This in turn should drive improvement in our customer retention, which is the key to meeting our revenue growth goals.

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ACCT 241 PRINCIPLES OF MANAGERIAL ACCOUNTING

Spring 2016

Required: Submit a report (typed and in good business writing form) that responds to the following:

Based on the excerpts provided above, compare and contrast the strategies of Applied Chipware Applications and Beyond Resorts International.

Select balanced scorecard measures for each company and use the framework provided in Chapter 11 of the text and shown below on page 3 to display each perspective of the balanced scorecard and potential performance measures and relationships for each company. As depicted in the framework, use arrows to show the causal links between the performance measures and show whether the performance measure should increase or decrease over time. Feel free to create measures for each company that may not be specifically mentioned in Chapter 11, but nonetheless make sense given the strategic goals of each company.

What hypotheses are built into each balanced scorecard that you construct? Why do the hypotheses differ between the two companies?

Your response should be in good business writing form and free from spelling and grammatical errors. You must cite all sources (that is, provide specific references in footnotes) that you used to create each scorecard.

Your score will be based on the quality and completeness of your responses, as well as the quality of your business writing.