Case: 10-2(Solartronics, Inc.)
Question1: Why are the reported results for anuary so poor, particularly in li!ht of the e"pected, a#era!e $onthly profit of %&0,000' nser: In the su$$ari*ed inco$e state$ent shos that sales is 1+,000 ut in ud!eted inco$e state$ent it as &00000012/20000 in a#era!e $onthly. n the other hand direct laor, #ariale o#erhead and fi"ed factory o#erhead ere unfa#orale ecause these ere hi!her than those of ud!eted inco$e state$ent. Question2: What additional data ould e useful in analy*in! anal y*in! the fir$s anuary perfor$ance' Why' nser: In ud!eted inco$e state$ent, peratin! #ariance such as direct laor, direct $aterial, #ariale factory o#erhead, fi"ed factory o#erhead-spendin!, fi"ed factory o#erhead-#olu$e ere not !i#en accordin! to $onthly. If there are re#enue #ariance, sellin! price #ariance, $i" and #olu$e #ariance, $i" #ariance, #olu$e #ariance, other re#enue analysis, $aret share #ariance, industry #olu$e #ariance, e"pense #ariance in the analysis state$ent !i#en then it ould e useful data for analy*in! the fir$s anuary perfor$ance ecause these data can infor$ us the difference eteen the re#enue and e"penses. 3alanced Scorecard 3asics 4he alanced scorecard is a strate!ic plannin! and $ana!e$ent syste$ that is used e"tensi#ely e "tensi#ely in usiness and industry, !o#ern$ent, and nonprofit n onprofit or!ani*ations orldide to ali!n usiness usiness acti#ities to the #ision and strate!y of the or!ani*ation, i$pro#e internal and e"ternal co$$unications, and $onitor or!ani*ation perfor$ance a!ainst strate!ic !oals. It as ori!inated y 5rs. 6oert 7aplan (8ar#ard 3usiness School) and 5a#id 9orton as a perfor$ance $easure$ent fra$eor that added strate!ic non-financial perfor$ance $easures to traditional financial $etrics to !i#e $ana!ers and e"ecuti#es e"ecu ti#es a $ore alanced #ie of or!ani*ational perfor$ance. While the phrase alanced scorecard as coined in the early 10s, the roots of the this type of approach are deep, and include the pioneerin! or of ;eneral literally, a ?@uotAdashoard?@uotA of perfor$ance $easures) in the early part of the 20th century. ?@uotA4he alanced scorecard retains traditional financial $easures. 3ut financial $easures tell the story of past e#ents, an ade@uate story for industrial a!e co$panies for hich in#est$ents in lon!-ter$ capailities and custo$er relationships ere not critical for success. 4hese financial $easures are inade@uate, hoe#er, for !uidin! and e#aluatin! the Bourney that infor$ation a!e
co$panies $ust $ae to create future #alue throu!h in#est$ent in custo$ers, suppliers, e$ployees, processes, technolo!y, and inno#ation.?@uotA dapted fro$ 6oert S. 7aplan and 5a#id . 9orton, ?@uotADsin! the 3alanced Scorecard as a Strate!ic Eana!e$ent Syste$,?@uotA 8ar#ard 3usiness 6e#ie (anuary-=eruary 1+): F+. 5esi!n 5esi!n of a 3alanced Scorecard ulti$ately is aout the identification of a s$all nu$er of financial and non-financial $easures and attachin! tar!ets to the$, so that hen they are re#ieed it is possile to deter$ine hether current perfor$ance $eets e"pec tations. 4he idea ehind this is that y alertin! $ana!ers to areas here perfor$ance de#iates fro$ e"pectations, they can e encoura!ed to focus their attention on these areas, and hopefully as a result tri!!er i$pro#ed perfor$ance ithin the part of the or!anisation they lead. 4he four perspecti#es 4he 1st ;eneration desi!n $ethod proposed y 7aplan and 9orton as ased on the use of three non-financial topic areas as pro$pts to aid the identification of non-financial $easures in addition to one looin! at =inancial. =our ?@uotAperspecti#es?@uotA ere proposed: G =inancial: encoura!es the identification of a fe rele#ant hi!h-le#el financial $easures. In particular, desi!ners ere encoura!ed to choose $easures that helped infor$ the anser to the @uestion ?@uotA8o do e loo to shareholders'?@uotA G Custo$er: encoura!es the identification of $easures that anser the @uestion ?@uotA8o do custo$ers see us'?@uotA G Internal 3usiness rocesses: encoura!es the identification of $easures that anser the @uestion ?@uotAWhat $ust e e"cel at'?@uotA G Hearnin! and ;roth: encoura!es the identification of $easures that anser the @uestion ?@uotACan e continue to i$pro#e and create #alue'?@uotA Eeasures 4he 3alanced Scorecard is ulti$ately aout choosin! $easures and tar!ets. 4he #arious desi!n $ethods proposed are intended to help in the identification of these $easures and tar!ets, usually y a process of astraction that narros the search space for a $easure (e.!. find a $easure to infor$ aout a particular oBecti#e ithin the Custo$er perspecti#e, rather than si$ply findin! a $easure for Custo$er). lthou!h lists of !eneral and industry-specific $easure definitions can e found in the case studies and $ethodolo!ical articles and oos presented in the references section. In !eneral $easure catalo!ues and su!!estions fro$ oos are only helpful after the e#ent - in the sa$e ay that a 5ictionary can help you confir$ the spellin! (and usa!e) of a ord, ut only once you ha#e decided to use it proficiently.
=or <"a$ple: 4he 3alanced Scorecard Eeasure$ent of 5<64E<94 = <9<6; =<5<6H 6CD6
