Chapter 16 - Strategic performance measurement. The following will be discussed in this chapter: What is strategic decision making? How are financial and nonfinancial measures used to evaluate organizational performance? How are financial and nonfinancial measures used to evaluate organizational performance?...
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• Q1 : What is strategic decision making?
• Q2 : How are financial and nonfinancial measures used to
evaluate organizational performance?
• Q3 : What is a balanced scorecard?
• Q4 : How is a balanced scorecard implemented?
• Q5 : How does the balanced scorecard affect strategic
management and incentives?
• Q6 : What is the future direction of cost accounting?
Trang 3Q1 : Overview of Management Decision Making
Organizational
Vision
Core Competencies
OperatingPlans
ActualOperationsOrganizational
Strategies
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objectives to monitor the results of actual operations.
objectives are compared to management’s expectations.
operations or adjust the long-term
strategies.
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his or her start date,
Trang 7Q3 : Balanced Scorecard
• The balanced scorecard is a method of
organizing the financial and nonfinancial
performance measures used to monitor
operations.
to the organization’s vision and long-term
strategies.
of communicating the organization’s
strategies throughout the organization.
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Trang 9Q3 : Balanced Scorecard (BSC) Perspectives
• A balanced scorecard usually consists of four categories of
measures, with 4 ~ 5 specific measures per category.
• The four common categories are called the balanced
organization’s financial goals.
performance from the viewpoint of customers.
organization’s ability to produce and deliver goods and services.
organization’s ability to change and develop improved strategies.
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Customer Perspective
Learning &
Growth
Financial Perspective
How do shareholders view organization?
How do customers view organization?
How do employees view organization?
How can organization grow and improve?
Performance measurements for
each perspective can be used to
determine appropriate operational and strategic
changes
Trang 11• Income from operations
• ROI, residual income, EVA©
Trang 12• New customer acquisitions
Trang 13Q3 : The Internal Business Process Perspective
three stages:
determined and the products are designed.
produced and delivered to the customer.
customer after the sale.
Trang 14• # of engineering changes
• Order response time
Trang 15• Number of information systems
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of the students are given full scholarships and the parents of the other half pay the expensive tuition Parents who are paying tuition are given the opportunity to pay reduce tuition if they become shareholders The School also receives donations from successful alumni Identify some performance measures the School might use for the financial perspective
on its balanced scorecard
Trang 17Q3 : BSC Example
Identify some performance measures the School for Future Artists might use for the customer perspective on its balanced scorecard
• Percent of graduates who
eventually complete masters
degrees in fine arts or related
fields
• Percent of graduates who
eventually become art professors
• Number of graduates who were
involved in art expositions this
year
• Number of graduates who received federal or state grants this year
• Number of families with 2 or more children at the school
• Responses to satisfaction surveys given to students and parents
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Innovation cycle
• Number of new courses developed
• Course development time
Operations cycle
• Percent of students who graduate
• Art supply costs per student
Post-sales service cycle
• Accounts receivable turnover ratio
• Results of alumni satisfaction surveys
Trang 19Q3 : BSC Example
Identify some performance measures the School for Future Artists might use for the learning and growth perspective on its balanced scorecard
• Teacher turnover
• Number of training workshops attended by teachers this year
• Results of teacher satisfaction surveys
• Teacher and student use of newly purchased kiln equipment
• Number of management efficiency and leadership conferences attended
by administrators this year
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• Clarify vision, competencies, and strategies.
• Analyze the four BSC perspectives to develop objectives and measures.
• Communicate the components of the BSC throughout the organization.
• Establish performance targets and action plans.
• Collect and analyze scorecard data.
• Investigate variances and reward employees.
• Provide feedback and refine the scorecard.
Trang 21Q5 : Barriers to Implementing Strategies
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communication of strategies throughout the
organization.
vision and strategies of the organization.
objectives that are linked to the organization’s
vision and strategies, so short-term and long-term strategies are more likely to be in alignment.
Trang 23Q5 : Balanced Scorecard Potential Weaknesses
strategies, the BSC provides the wrong incentives for managers.
because the data is easy to obtain and familiar, rather than because they are linked to the vision and strategies.
already successful rather than areas that need
improvement.
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from preparing detailed reports.
the best information possible to support
management decision making.
of and understand emerging management tools
(such as the balanced scorecard).