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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 4
Balanced Scorecard, Strategic Alignment
Refer to Exercise 13.13. Suppose that Mandy communicates the following weights to her CEO:
Perspective: Financial, 40%; Customer, 20%; Process, 20%; Learning growth, 20%
Financial objectives: Profits, 50%; Revenues, 25%; Costs, 25%
Customer objectives: Customer satisfaction, 60%; Market share, 40%
Process objectives: Defects decrease, 40%; Supplier selection, 30%; Redesign process, 30%
Learning growth objective: Training, 100%
Mandy next sets up a bonus pool of $100,000 and indicates that the weighting scheme just described will be used to determine the amount of potential bonus for each perspective and each objective.
Required:
1. Calculate the potential bonus for each perspective and objective.
2. Describe how Mandy might award actual bonuses so that her managers will be encouraged to implement the Balanced Scorecard.
3. What are some other ways that Mandy can encourage alignment with the company's strategic objectives (other than incentive compensation)?
Refer to Exercise 13.13. Suppose that Mandy communicates the following weights to her CEO:
Perspective: Financial, 40%; Customer, 20%; Process, 20%; Learning growth, 20%
Financial objectives: Profits, 50%; Revenues, 25%; Costs, 25%
Customer objectives: Customer satisfaction, 60%; Market share, 40%
Process objectives: Defects decrease, 40%; Supplier selection, 30%; Redesign process, 30%
Learning growth objective: Training, 100%
Mandy next sets up a bonus pool of $100,000 and indicates that the weighting scheme just described will be used to determine the amount of potential bonus for each perspective and each objective.
Required:
1. Calculate the potential bonus for each perspective and objective.
2. Describe how Mandy might award actual bonuses so that her managers will be encouraged to implement the Balanced Scorecard.
3. What are some other ways that Mandy can encourage alignment with the company's strategic objectives (other than incentive compensation)?
Explanation
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1. Calculation of the potential bonus fo...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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