Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 33

Balanced Scorecards and Strategy Maps

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?

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b. What are the strengths and weaknesses of the strategy map as developed by HSC?

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c. Recommend changes to the map that will better communicate the strategy for HSC and incorporate your recommendations from requirement (a).

Step 1 of 5

Business strategy

It is an approach used by a company for deploying its resources, assets and capabilities to provide maximum returns to its investors and meeting customer expectations. It is component of high-level strategy plan and defines value preposition.

Balance scorecard