Accounting
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unit64.docxAfter reading information on how performance measurement is used to support business strategy in Chapter 18 of the Fundamentals of Cost Accounting text, complete the problems listed below. The problems will help you apply your knowledge of core asset capabilities and use of a balanced scorecard in the development of strategy maps.
Complete the following problems:
· Problem 18-41, "Core Assets and Capabilities," page 728.
· Problem 18-42, "Balanced Scorecards and Strategy Maps," page 729.
18-41. Core Assets and Capabilities
(LO 18-1)
Consider the following well-known companies and their key products and services:
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Company |
Primary Product/Service |
Core Asset or Capability |
Non-core Asset or Capability |
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Apple |
Computers, personal digital assistants (PDAs), mobile phones |
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The American Red Cross |
Disaster relief and various medical, health, and well-being assistance programs |
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Hyundai Motors |
Automobile manufacturer |
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Target Stores |
Retail consumer and household goods and groceries |
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Sysco |
Supplier of bulk food purchases to restaurants |
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Nike |
Athletic apparel and equipment |
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Required
Identify one thing that is a core capability for each. For example, for Apple, a core capability is the creativity of its product design people. Also identify one capability that companies have that is not core. For example, for Apple, the competence of the accounting and finance group, while important, has not been core to the company’s success.
18-42. Balanced Scorecards and Strategy Maps
(LO 18-4)
Hill Street Company (HSC) manufactures plastic parts for the home construction industry. The market is extremely competitive and margins are thin. The company recently adopted a balanced scorecard for performance evaluation. As part of that exercise, managers at HSC developed the following strategy map.
Required
a. Using the strategy map, comment on the performance measures used for each of the four perspectives of the scorecard. Would you recommend any changes to the measures? If so, what changes would you make? Why?
b. What are the strengths and weaknesses of the strategy map as developed by HSC?
c. Recommend changes to the map that will better communicate the strategy for HSC and incorporate your recommendations from requirement (a).
Operational Performance Measures
After reading information on operational performance measures with employee involvement in Chapter 18 of the Fundamentals of Cost Accounting text, complete the problems listed below. The problems will help you apply your knowledge of evaluating efficiency reports to measure operational performance, and involving employees in the decision-making process.
Complete the following problems:
· Problem 18-50, "Operational Performance Measures," page 732.
· Problem 18-54, "Employee Involvement," page 733.
Submit your completed problem response as an attachment in the assignment area.
18-50. Operational Performance Measures
Zuma Company manufactures surfboards. The controller prepares a weekly production efficiency report and sends it to corporate headquarters. The data compiled in these reports for a recent six-week period follow:
ZUMA COMPANYProduction Efficiency Report |
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Week |
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|
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|
1 |
2 |
3 |
4 |
5 |
6 |
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Percentage of manufacturing cycle efficiency |
70 |
69 |
72 |
65 |
66 |
62 |
|
Percentage of on-time deliveries |
98 |
95 |
96 |
92 |
94 |
90 |
|
Number of customer complaints |
20 |
18 |
22 |
25 |
23 |
27
|
Required
a. Write a memo to the company president evaluating the plant’s performance.
b. If you identify any areas of concern in your memo, indicate an appropriate action for management to take. Indicate any additional information you would like to have to make your evaluation.
18-54. Employee Involvement
The interaction between customers and line employees is often more direct in service industries than in manufacturing firms. At the same time, we often observe that employees in many service firms (for example, in hotels and airlines) are given authority to respond to customer concerns without having to seek approval from their supervisors. Desk clerks in hotels or gate agents for airlines, for example, are often allowed to offer upgrades, early check-ins, late check-outs, special seats, and so on, as a way to apologize for or remedy problems. It is also a way to proactively build customer satisfaction.
Required
a. How can policies that allow employees to make these decisions help the organization? How might they harm the organization?
b. You observe these policies less frequently in other service organizations such as banks and other financial institutions. Why might this be the case?
