The Balanced Scorecard
The term balanced scorecard became part of the professional accounting vernacular in the early 1990s. This nontraditional approach to measuring strategic performance was developed by Dr. Robert Kaplan and Dr. David Norton. As the name implies, the goal of the balanced scorecard is to provide stakeholders with a balanced view of the performance of an organization. In this Discussion, you will refer to an example from your professional career to consider the role of balanced scorecards in an organization.
To prepare for this Discussion:
- Consider an example from your professional career of when the implementation of a balanced scorecard might have been beneficial to articulate the organizational goals and objectives to the department, area, or team in which you worked.
Post an analysis of the role of balanced scorecards in an organization, to include the following:
- Describe an example from your professional career, current or past, in which the use of a balanced scorecard might have had a positive impact on your understanding of how the performance of your department, area, or team contributed to the achievement of the organization’s overall goals and objectives.
- As a manager, analyze how you could utilize a balanced scorecard to ensure your department, area, or team met the organization’s goals and objectives. What measurement(s) might you consider and why? (Provide at least one example of a measurement from at least one of the four perspectives of the balanced scorecard: financial, internal operations, customer, and learning and growth.)
Account for Management Decision Making
Week 2 Learning Resources
Performance Report
Decision making must involve good data that is comparable to what is expected. For example, if a company’s budget is based on producing and selling 10,000 toys each month, but instead it produces and sells 15,000 toys in a specific month, it will probably have higher dollar sales as well as higher costs. If these actual data are compared to the budget for 10,000 toys, the sales department will be congratulated, and the production department might be in trouble for overspending. This misuse of data can be avoided by preparing a performance report in which the budget is adjusted for the increased sales.
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 7.4 prepare flexible budgetsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/7-4-prepare-flexible-budgets
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 7.5 explain how budgets are used to evaluate goalsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/7-5-explain-how-budgets-are-used-to-evaluate-goals
· Walden University, LLC. (2021). Preparing a performance report (flexible budget) [Video]. Walden University Canvas. https://waldenu.instructure.com
Balanced Scorecards
Many companies supplement quantitative measures with qualitative measures, also called nonfinancial measures, to better assess performance. One broad-based, nonfinancial measurement is the balanced scorecard. It links performance management with an organization's strategic goals and includes both financial as well as nonfinancial measures.
· Asiaei, K., & Bontis, N. (2019). Using a balanced scorecard to manage corporate social responsibilityLinks to an external site. . Knowledge & Process Management, 26 (4), 371–379. https://doi.org/10.1002/kpm.1616
· Franklin, M., Graybeal, P., & Cooper, D. (2019). Why it mattersLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-why-it-matters
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 12.1 explain the importance of performance managementLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-1-explain-the-importance-of-performance-measurement
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 12.2 identify the characteristics of an effective performance measureLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-2-identify-the-characteristics-of-an-effective-performance-measure
· Franklin, M., Graybeal, P., & Cooper, D. (2019). 12.4 describe the balanced scorecard and explain how it is usedLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/12-4-describe-the-balanced-scorecard-and-explain-how-it-is-used
· Quesado, P., Aibar, B., Lima, L. (2018). Advantages and contributions in the balanced scorecard implementationLinks to an external site. . Intangible Capital , 14 (1), 186–201. https://doi.org/10.3926/ic.1110
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Week 2 Assignment: Using Accounting Information for Decision Making— Performance Report and the Balanced Scorecard
Prepared by: Replace this text with your name.
Date: Replace this text with the submission date.
Walden University
MBAX 6050: Accounting for Management Decision Making
Analyzing the Performance Report—Preparing a Flexible Budget
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Insert your performance report from Excel. Add or remove headings as necessary. For information on inserting data from Excel into Word, refer to the following: Microsoft. (n.d.). Insert a chart from an Excel spreadsheet into Word. https://support.microsoft.com/en-us/office/insert-a-chart-from-an-excel-spreadsheet-into-word-0b4d40a5-3544-4dcd-b28f-ba82a9b9f1e1
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The Balanced Scorecard
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References
[Please delete this note before submitting your Assignment. For more information about formatting your reference list, please visit the following site: https://academicguides.waldenu.edu/writingcenter/apa/references .]
Include appropriately formatted references to support your Assignment. Refer to the Assignment guidelines for further information on the requirements.
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Part 3 – Performance Report
| Performance Report For month ending June 20xx | |||||||||
| I | II | III | IV | V | |||||
| Static Budget | Actual | Variance (II–I) | Favorable (F) or Unfavorable (U) | Flexible Budget | Variance (II–IV) | Favorable (F) or Unfavorable (U) | |||
| Manufacturing Overhead Costs | |||||||||
| Indirect Labor | $ – 0 | $ – 0 | |||||||
| Supplies | $ – 0 | $ – 0 | |||||||
| Utilities | $ – 0 | $ – 0 | |||||||
| Total | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | ||||
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