Activity Instructions: Divisional Performance Analysis
You should be familiar with the basics of management control systems from the completion of the Required Readings and the Lecture and Research Update. Carefully review the depiction of management control systems in Exhibit 9-1 (p. 353). A management control system should be designed around the organization’s goals, objectives, and performance measures as illustrated in Exhibit 9-2 (p. 354).
Look carefully at the bases for identifying subunits as cost, profit, or investment centers under a responsibility accounting system. To ensure a feedback mechanism for evaluating performance, a balanced scorecard, including indicators for financial strength, customer satisfaction, business process improvement, and organizational learning, has been developed by Kaplan and Norton at Harvard University. See Exhibit 9-3 (p. 357) for examples of key indicators for each of these four (4) components of the balanced scorecard. The Summary Problem for Your Review, including Exhibit 9-4 (p. 360), provides a good illustration of the balanced scorecard for Luxury Suites Hotels.
Among key non-financial indicators are quality, cycle time, and productivity. The Required Readings provide an overview of these statistics as indicators of performance. This Activity is comprised of two (2) parts. Your Activity responses should be both grammatically and mechanically correct and formatted in the same fashion as the Activity itself. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your response and document them in a bibliography using APA style. (100 points) (A 3-page response is required for the combination for Parts A and B.)
Select at least two (2) articles from Strategic Finance, Management Accounting Quarterly, or Journal of Cost Management that include a description of a company’s design and implementation of a Balanced Scorecard. (80 points)
For the company selected, include the following
Description of the Balanced Scorecard
Assessment of the Benefits of the Balanced Scorecard
Discussion of the Implementation of the Balanced Scorecard
For an application of this knowledge base in performance measurement, propose at least one (1) measure of performance for each of the four (4) goals/objectives listed for Zenon Medical Instruments Company (ZMIC). Problem 9-44 (p. 385) provides the information for the company and its goals and objectives. (20 points)