Kind Travel is a travel company that specialises in package travel experiences in environmentally sensitive destinations. The popularity of these tours has been growing over the last few years, and Kind Travel has been successful in attracting customers. Competition, however, has also intensified,and even some of the regular tour operators have started to offer eco - sensitive tours. Jenny Wong, the managing director, has asked the financial controller, Mandy Kow, to design and implement a new performance measurement system that will help protect the business from competitors. Jenny Wong recently attended a masterclass on the Balanced Scorecard (BSC) and thought that Kind Travel could benefit from implementing a BSC. She organised a strategy retreat with the senior executives to provide the strategic foundations for the new performance measurement system. They drafted a set of objectives to support the four perspectives of a balanced scorecard, as shown in the table below:

Perspectives ............................Objectives

Financial ........................Improve cash flow

..........................................Improve profit

Customer ..................Increase market share

...............................Increase customer satisfaction

Internal Business ........Process Increase office cost effectiveness

........................................Develop innovative tours

Learning and Growth ......Increase environmental knowledge of employees

Required:

i. For each of the four perspectives, provide lead and lag indicators that would support the objectives. Make sure your measures relate specifically to Kind Travel.

ii. Discuss what problems and challenges can contribute to a poorly functioning balanced scorecard.