Top 5 Balanced Scorecard Blunders Students Make In Accounting Assignments

What is a Balanced Scorecard?

Balanced Scorecard (BSC) is one of the widely used performance measurements tools that provide both financial and non-financial performance indicators for an organization. However, there are several complex facets of the BSC that many accounting students encounter when doing their coursework. To guide you on the things that you should avoid when taking tests and coursework, this guide has identified the five most frequent mistakes seen in students and has provided real-life examples and situations for each of them so that you can easily learn and apply the correct approaches.

Blunder 1. Misunderstanding the Four Perspectives

Blunder: The four perspectives within the Balanced should be properly understood by students, but there are cases when students mix them or simplify too much. Scorecard: Financial, Customer, Internal Business Processes, and Learning & Growth.

Illustration: Suppose there is a new technology firm that is all focussed with increasing sales revenue and net margins while not concerned with things like customer satisfaction and organizational productivity. This results to a situation whereby organizations attain short term prosperity while experiencing long term volatility.

Case Study: Kodak is one of the firms that have been cited to have failed to achieve balance across the BSC perspectives. Even though the firm exhibited strong financial condition in the 1990s, the Learning & Growth perspective was entirely ignored when Kodak failed to invest in such digital technology.

Tip: It is important not to make this mistake, so it is necessary to pay attention to the perspectives of BSC. The Financial perspective is established to assess the extent to which the strategy aligning with the internal and external environment is yielding the organisation’s value. The Customer perspective measures the satisfaction level and loyalty of the customers. The Internal Business Processes relate to the superior operations efficiency and effective implementation of business ideas. Learning & Growth evaluates the extent of the corporation’s training programs and organizational culture.

Blunder 2. Setting Vague or Unrealistic Objectives

Blunder: Another common mistake is the setting of objectives that are either broad or unattainable and this becomes a problem when it comes to measurement of performance.

Illustration: A retail company using an objective as ‘to increase customer satisfaction’ without laying down the goals or measures will not have a clear idea of how to achieve process optimization and implement changes.

Case Study: Lack of well-defined strategic goals inherent in Retail giant Sears’ operations contributed to their business decline. Their strategy of striving to ‘be more customer-centric’ was not very smart and lacked target measures and inconsistent implement of changes that led to its bankruptcy.

Tip: It is recommended to apply the SMART criteria (Specific, Measurable, Achievable, Relevant, Time-bound) when it comes to the establishment of objectives.  For instance, instead of "improve customer satisfaction," a SMART objective would be "increase Net Promoter Score (NPS) by 10 points within the next 12 months."

Blunder 3. Ignoring Cause-and-Effect Relationships

Blunder: Students commit the mistake of working with the BSC perspectives separately, without putting into consideration the flow of cause and effect between these perspectives.

Illustration: Financial perspective such as a reduction in the manufacturing cost may well be pursued by a manufacturing firm without much attention to quality (Internal Business Process), thus resulting in a low level of satisfaction among the customers (Customer perspective).

Case Study: Nokia’s decline can also be attributed to their seeming neglect of these relationships. To reduce its expenses, they limited their spending on Learning & Growth which "Internal Business Processes" and also "Customer perspective" as they were producing mediocre products. Subsequently, financial perspective was affected due to less sales.

Tip: When creating the strategic map of any BSC, define the cause-and-effect relationships. For instance, learning and growth that may involve training the staff shall enhance internal business processes and hence enhances customer satisfaction, revenue and profits. 

Blunder 4. Overloading the Scorecard with Metrics

Blunder: Adding more number to the BSC metrics confuses the strategy and slows down the execution, and doesn’t prove to be good for the managers, as well as the employees to handle.

Illustration: An healthcare organization expecting to achieve a lot by tracking numerous performance indicators with extensive checklist of KPIs may struggle to identify goals that are worth pursuing and monitor performance efficiently.

Case Study: One of the main concerns regarding the use of Balanced Scorecard by NHS in the UK is overloading the BSC with a lot of metrics which brings confusion and hampers effective performance management.

Tip: Concentrate on the most significant measures, which make up strategic objectives. The ideal number of is often considered to range between 20 and 25 metrics. It is important that each measure is linked to strategic goals and offers clear and meaningful insights.

Blunder 5. Failing to Communicate and Align the BSC

Blunder: The achievement of a BSC’s success lies in it’s transparent communication and alignment with the company’s objectives, strategies and employee action.

Illustration: A financial services firm that establishes a BSC at the executive level but neglects to pass the information to the employees at the field level will not experience much improvement.

Case Study: This situation was particularly evident in Enron where the top executives established certain strategic goals that were not in harmony with the practices at the subordinate level. This situation resulted to unethical practices and financial failure.

Tip: The BSC should be effectively communicated to all stakeholders at different organizational levels. Organization should consider daily training, standard workshops, and feedback meetings to ensure everyone is on the same page.

How Accounting Assignment Help Service Overcomes BSC mistakes

The Balanced Scorecard (BSC) is one of the significant topics that students pursuing commerce and business in usa universities learn during their coursework and often face challenges in solving case studies involving BSC. Accounting assignment help services act as a useful tool for students to avoid common mistakes they might face while seeking to succeed in their academic pursuits.

1. Understanding the Four Perspectives: Offering professional and individual lessons, tutors explain the peculiarities of the four perspectives of the BSC. By engaging the student with more specific cases and examples that involves all the four perspectives of BSC, the student can gain a clearer insight on how to effectively maintain a balance.
2. Setting SMART Objectives: Professional homework help with accounting makes it possible for students to understand the need to learn the SMART objectives to solve case studies.  
3. Recognizing Cause-and-Effect Relationships: Tutors explain how the different BSC perspectives or categories relate to one another, to explain how the metrics used in one may affect other perspectives. In this way, an approach contributes to the improvement of students’ strategic thinking and applied practice.
4. Avoiding Metric Overload: In this process, students initially identify key performance indicators (KPIs) with the help of experts and do not make a mistake of including too many items in the scorecard. This focus helps in the measurement and especially the analysis of the performance.
5. Effective Communication and Alignment: The accounting homework assistance services help the students obtain skills required to present and synchronize their BSC with company strategies. This makes their presentation logical and effective.

Overall Improvement in Course Grades and Growth

Accounting assignment solutions not only correct BSC specific mistakes but also help improve academic performance. The students will be able to increase their awareness of various aspects concerning accounting as well as get a better understanding of the subject through the help received from professionals whereas, the work submitted will also be of a higher quality. This helps in getting better grades, gain confidence and comprehension of the subject matter.

Accounting Homework Support Highlights

Affordability: The services are developed to be affordable, which allows getting high-quality assistance for every student.

Timeliness: Timely delivery helps the students meet the set deadlines so that they can be able to go through the feedback before submission.

Professionalism: Tutors are trained professionals with specialization in accounting and business, therefore the help offered is credible.

Expertise: The services cater for the needs of each student basing on the accounting principles and educational requirements set out by the academic institutions.

By leveraging accounting assignment helper service, students can navigate the complexities of the Balanced Scorecard with confidence, avoid common mistakes, and achieve academic excellence in their commerce and business studies.

Helpful Resources and Textbooks

To deepen your understanding of the Balanced Scorecard and avoid these common mistakes, consider the following resources:

Books:

• The Balanced Scorecard: Translating Strategy into Action by Robert S. Kaplan and David P. Norton.
• Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results by Paul R. Niven.
• Performance Measurement and Control Systems for Implementing Strategy by Robert Simons.

Learning the Balanced Scorecard is crucial as it enables accounting students to build sufficient knowledge in performance management. Thus, by avoiding the most common mistakes like misunderstanding the perspectives, setting unrealistic goals, overlooking cause-effect relationship, overlisting metrics, and neglecting communication and BSC, you can build more qualitative assignments. Use the provided resources to further your knowledge and apply these insights to real-world scenarios, ensuring a comprehensive and strategic approach to performance measurement.

Brian Posted on 07-Jul-2024 19:05:00