Question

Assume you are the management accountant and Tracey Chen has asked you to help her design a comprehensive performance measurement system for the Foleo Scapps business unit.  She has provided you with her observations of the business operations (see Chapter 8), along with the Foleo Group’s overarching objectives.  Below is an excerpt from the company’s latest Annual Report:

“… The long-term goals of the Foleo Group of businesses revolve around growth, stakeholders and technology and can be summed up in the following 4 dot points:

• We aim to grow each business by at least 8 per cent per annum over the next decade;
• We aim to put our customers’ needs first – to do that we will foster good relationships with them, our suppliers and our employees.  
• We aim to use and provide the most up-to-date technology available to ensure our customers receive the best product possible at the lowest price.
• We aim to provide a working environment for our employees that encourages and facilitates a happy and motivated team.”
• Hence, objectives for each of the four perspectives of the BCS for the Foleo Scapps business unit.

  • 1. Increase market penetration- To achieve the first goal of atleast 8% per annum business growth in the next decade, the most important strategy would be market penetration. Market penetration do no imply shifting to a new market or creating a new product. But, market penetration refers to the increase the customer base of market share by with the help of already existing products or services. This goal can be achieved by various means depending upon company to company. We can either decrease the price of our products or services to attract more customers away from our rivals, invest in advertisement and marketing to attract the attention of new customers, observe the requirements of potential customers and upgrade the product or service quality according to their requirements etc.

    2. Cherish each customer, supplier and employee- In order to foster a good relationship with the customers, suppliers and employees, we must ensure that every interaction with them is delightful, cordial and above all respectful. Recognition of customers instantly is another way which makes them feel valued. Listening and responding to the needs, complaints and complements of the customers, suppliers and employees is another most important step in building a healthy relationship. Try to give free information, organise special events and loyalty rewards to them as frequently as possible. All these shows an gesture of appreciation and increases communication among customers, suppliers and employees.

    3.Standardize and  modernise technology- To ensure the availability of most up-to-date technology to customers, modernisation and standardization of the existing technology has to be made for flexibility and speed. All these efforts must cater to the ever increasing needs of the customers, investors and stakeholders. Most modern technologies today are flexible and fast and can rapidly engage in variety of tasks. All these will help in quick increase in production with less effort required. Use of Articficial Intelligence (AI) will be more helpful in ensuring rapid production. As a result the cost of production will fall, leading to a fall in price of the product. Thus, consumers will recieve the most up-to-date product at the lowest possible price.

    4.Empower team members- To provide a encouraging and happy work environment for the employees, we must empower them in various ways such as-open communication and interactions with the bosses and managers, reward based self-improvement, clearly defined roles and duties, support their independence and efforts, be tolerant to their mistakes, be sensible and listen to their problems etc. Apart from these, another important objective is to offer rewards, benefits, perks and incentives to the employees. Employees usually respond to these incentives , recognition and appreciation. All these will provide positive reinforcement and foster positivity and motivation to the employees.

  • Question: Using your four (4) objectives which are " Increase market penetration, Cherish each customer, supplier and employee, Standardize and  modernise technology, Empower team members". Prepare a strategy map that illustrates the cause and effect relationships between them.

  • (HINT:  Do not use a generic strategy map from the text – ensure yours maps YOUR suggested objectives from part (b);  ensure you include arrows to illustrate the cause/effect relationships.)

Answer 1

All the four objectives have a impact on one other and are related to each others. Let us see how.

When the company focuses on increasing market penetration, they are eager to make changes in products selling practises, attracting customers, by various offers and advertisements. This would lead to help make customers more comfortable and they are happy as their needs are met. Also the suppliers and ployees are happy working in such environment where customers are responding back positively and encouraging the employees. While practises of market penetration also leads to changes brought in technology and advancements being made to let the market grow to new heights.

Empowering team members would lead to make a wonderful team who are being appreciated for their work and efforts. This leads them to do their work more sincerely. Thus this helps in the company for its growth. And when employees are doing productive work, productions level increase in quality as well as in quantity. This also help attract customers towards the company. Employees learn the new technology easily and work with full concentration when they are satisfied with the company system.

This employee satisfaction is also very important.

If we talk about, this inhancement in technology has a great affect on other factors or objectives. Technology development leads to more specified and customized products. They are able to attract large volume of customers. Thus customers are more satisfied with enhancement is technology and it leads to increase in market penetration by contributing to produce products which are liked by the customers.

So, we saw here how all these four objectives are contributing to each other and have their affects on each other being their causes or effects.

All these four objectives lead to a healthy growth of the organization and this is the central objective of any organization. So we can say that all these objectives are contributing to the one objective that is positive growth of the organization. And all these sub objectives have their equal contribution to satisfy the central objective.