Explorers, Limited will adopt a balanced scorecard system next year and has comp

Question

Explorers, Limited will adopt a balanced scorecard system next year and has compiled the list of possible performance measures shown below. Select the aspect of the balanced scorecard that matches each performance measure and explain the connection between each performance measure and the aspect of the balanced scorecard system that you matched to that performance measure.

Performance Measure

Balanced Scorecard Aspect

1.         Residual income

A.         Financial (investors)

2.         Consumer satisfaction              

B.         Learning and growth (employees)

3.         Employee absenteeism

C.         Internal business processes

4.         Increase in profits

D.         Customers

5.         On-time deliveries

6.         Manufacturing process time

Performance Measure

Balanced Scorecard Aspect

1.         Residual income

A.         Financial (investors)

2.         Consumer satisfaction              

B.         Learning and growth (employees)

3.         Employee absenteeism

C.         Internal business processes

4.         Increase in profits

D.         Customers

5.         On-time deliveries

6.         Manufacturing process time

Explanation / Answer

A. Financial (investors)

Performance Measure: Increase in profits

The investors are interested mostly on the profitability of the company, they want to know how much money they can make on the shortest amount of time that is why the match between investors and profits. The higher the profit most likely the investors will invest more money in the company.

B.         Learning and growth (employees)

Performance Measure:   Employee absenteeism

The relationship is that as long as your employees keep learning, they have fair opportunities from growing in the organization the absenteeism will be minimal because they will feel a part of the company.

C.         Internal business processes

Performance Measure:  Manufacturing process time

The relationship is that by improving the manufacturing time the internal business processes will improve as well. This will transform in less reprocess orders and higher quality standards.

D.         Customers

Performance Measure: On- time deliveries, consumer satisfaction.

Customers will be happy when their orders are delivered on time, the satisfaction rate will be higher, this will lead to more profits and also will lead to an increase of customers. If the customers are unhappy the sales will decrease, they will also decrease of orders are not deliver on time and customers will be lost.

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