AYB 321 Strategic Management Accounting
AYB321 Strategic Management Accounting Discussion Leadership Questions TUTORIAL 5 Balanced Scorecard (1) 1. The Maycomb Grocery Company (MGC) operates a chain of small supermarkets in rural Queensland. They have achieved considerable commercial success over the 27 years they have been in existence, and have expanded steadily from one store in the mid 1980s to 25 stores throughout Queensland today. Lately, however, they have experienced increased competition from a cut-price overseas operator, Ilda, who are beginning to set up competing stores in the same towns as Macomb. The senior management of Macomb are divided on how best to respond. Charlie Harris, the retail manager, wants to immediately cut costs so that MGC are able to compete on price. In particular, Harris wants to reduce the variety of goods sold in the store to cut down on space and obsolescence, and also to abandon a customer service training program for all frontline staff. In contrast Tom Robinson, the CFO, wants to expand their product line and accelerate the customer service training. Required: Discuss these two approaches within the context of the 'vicious circle' and 'virtuous circle', and advise on which approach you believe is superior, and why. Also, provide some ideas on what other actions could be taken by MGC to maintain competitiveness. 2. Refer to the 'Real Life', Customising the Balanced Scorecard, on page 653 of LTH (p195 in the composite text) and answer the following three questions: The National library of Australia uses a BSC with five perspectives: customer; stakeholder; financial; process; learning and growth. Why do you think they have added 'stakeholder' as a fifth perspective? Give two examples each of who you consider would be their customers and who would be their stakeholders. a) Centrelink has three perspectives: government and stakeholders, ongoing and emerging services, and customers. Describe how the different objectives of Centrelink (as contrasted with the objectives of a for-profit company) would lead to this very different looking balanced scorecard. b) Some not-for-profit organisations use the four perspectives of the Kaplan and Norton balanced scorecard, but place 'customers' at the top and 'financial' below. Why would they swap these two around? c) 1 AYB321 Semester 1, 2014 Page 3. Hutchins Specialised Furniture Corporation has provided you with the following data in relation to the manufacture of snooker tables: Activity Assembly of tables Average waiting time (idle time due to machine breakdown) Cutting and fitting cloth Delivery and installation in customer's premises Insertion of table pockets Inspection of completed tables Machining of table legs Materials handling Storage of completed tables awaiting distribution Total Average Hours per Table 5.0 1.5 1.0 3.0 2.0 0.5 4.0 1.0 2.0 20.0 hours You are asked to advise on the following: a) What is Hutchins' MCE? (Show all workings.) How could Hutchins improve their MCE, and how might this provide them with a competitive advantage? b) Why would an improvement in MCE be particularly important to a firm whose main customers are switching to JIT manufacturing? c) *** 2
