An experiential approach to learning about the balanced scorecard

www.elsevier.com/locate/jaccedu

Anexperientialapproachtolearning

aboutthebalancedscorecard

WayneG.Bremsera,LourdesF.Whiteb,*

aDepartmentofAccountancy,CollegeofCommerceandFinance,VillanovaUniversity,Villanova,

PA19085-1678,USA

bAccountingArea,MerrickSchoolofBusiness,UniversityofBaltimore,

1420NorthCharlesStreet,Baltimore,MD21201-5779,USAReceived1July1999;receivedinrevisedform1May2000;accepted1September2000

Abstract

Thebalancedscorecard(BSC)isanintegratedstrategicperformancemanagementframe-workthathelpsorganizationstranslatestrategicobjectivesintorelevantperformancemea-sures.Thispapero󰀱ersguidelinesforimplementinganexperientialapproachtolearningabouttheBSCthroughthestudyof``real-world''organizations.Thisapproachemphasizeshands-onexperiencewiththeteam-based,cross-functional,andstrategicaspectsofmanage-mentaccountingdesignedtoaddressseveraleducationalobjectives,including:understandingorganizationalstrategyandcriticalsuccessfactors;gaininginsightintohowtomeasureper-formance;anddevelopingoralpresentationandteam-buildingskills.Speci®cexamplesofclassroommaterialstofacilitateimplementationofthisapproachinmanagementaccountingcoursesatbothgraduateandundergraduatelevelsarealsoo󰀱ered.#2001ElsevierScienceLtd.Allrightsreserved.

1.Motivationforthebalancedscorecardproject

Accountingeducatorshavebeenencouragedbyseveralprominentgroupsinthepastdecadetoconsidersigni®cantchangesintheaccountingcurriculum,bothintermsofcontentanddeliverymethods(Rebele,Apostolou,Buckless,Hassell,Paquette,&Stout,1998).Acommonthemeamongrecentcallsforchangesinaccountingeducationisthatemployersrequiregraduateswhoknowmorethanjusttechnicalaccountingcon-cepts.Studentswhowillbecomesuccessfulprofessionalsunderstandhowaccounting

*Correspondingauthor.Tel.:+1-410-837-5090;fax:+1-410-837-5722.E-mailaddress:lwhite@ubmail.ubalt.edu(L.F.White).

0748-5751/01/$-seefrontmatter#2001ElsevierScienceLtd.Allrightsreserved.PII:S0748-5751(00)00016-6

242W.G.Bremser,L.F.White/J.ofAcc.Ed.18(2000)241±255

relatestootherbusinessareas.Theyknow``howtolearn''andpossessskillsinareassuchaswrittenandoralcommunication,teamwork,anduseoftechnology.

Thisarticledescribesatermprojectthato󰀱ersstudentshands-onexperiencewiththeteam-based,cross-functional,andstrategicaspectsofmanagementaccountingthroughthestudyoftheBalancedScorecardorBSC.Theauthorshaveimple-mentedthisprojectinrequiredmanagementaccountingcoursesattheunder-graduate(sophomore)andgraduate(MBAandMSinAccounting)levels.Inharmonywithcallsforchangesinaccountingeducation,thisprojectinvolvescriticalthinking,writtenandoralcommunication,teamwork,anduseoftechnology.Theexperientialnatureofthisprojectisalsoconsistentwitheducationalresearchshow-ingthatstudentstendtocomprehendcomplexconceptsmuchbetter,andretainthemaspartoftheirbodyofknowledgemuchlonger,whentheybecomepersonallyinvolvedinthelearningprocess(Light,1990).Thisisespeciallytruewhenstudentsarerequiredtopresenttheirideastoothers.

TheBSCwasintroducedbyKaplanandNorton(1992,1993,1996a,b)asanintegratedstrategicperformancemanagementframeworkthathelpsorganizationsarticulate,communicate,andtranslatestrategyintoaction.WeadoptedtheBSCframeworkinourmanagementaccountingcoursestoemphasizethekeyroleplayedbymanagementaccountinginin¯uencingandassessingperformancefromthefourperspectivesoutlinedbytheBSC:

1.The®nancialperspectiveaddressesthequestion,``Tosucceed®nancially,howshouldweappeartoourshareholders?''

2.Thecustomerperspectiveaddressesthequestion,``Toachieveourvision,howshouldweappeartoourcustomers?''

3.Theinternalbusinessprocessperspectiveaddressesthequestion,``Tosatisfyourshareholdersandcustomers,whatbusinessprocessesmustweexcelat?''4.Thelearningandgrowthperspectiveaddressesthequestion,``Toachieveourvision,howwillwesustainourabilitytochangeandimprove?''Whilethereisnode®nitiveempiricalevidencetoshowthatadoptingtheBSCactuallyleadstosuperiorperformance,anecdotalevidencesuggeststhattheBSCisincreasinginpopularityinavarietyofmanufacturingandservice®rms,aswellasgovernmentandnonpro®torganizations(e.g.Chow,Haddad,&Williamson,1997;Epstein&Manzoni,1997;Meyer&Markiewicz,1997).Ithasbeenpredictedthatbytheyear2000atleast40%ofFortune1000companieswillhaveimplementedaBSC(BalancedScorecardCollaborative,2000).ThisisalsoconsistentwithevidencefromtheInstituteofManagementAccountants'CostManagementGroup,whichfoundthat40%ofthesurveyed®rmsreportedthattheyplantouseascorecardmeasure-mentsystemwithinthenexttwoyears(FrigoandKrumwiede,2000).2.Educationalobjectives

Forourmanagementaccountingcourses,weidenti®ed®veprimaryandthreesecondaryobjectivesfortheBSCproject.AnimportantoverallpurposeoftheBSC

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projectistohavestudentsresearcha``real-world''organizationtoobtainanunderstandingofthebusiness.Thisunderstandinginvolvesthreeprimaryeduca-tionalobjectives:beingabletoexplainwhatdrivesvalueinaparticularindustry,beingabletoarticulatetheuniquestrategyofanorganization,andbeingabletoidentifythecriticalsuccessfactors(fortheindustryingeneralandfortheorganiza-tioninparticular)thatarenecessarytoimplementthestrategyandachievetheorganizationalgoals.Theseeducationalobjectivesareeasierforgraduatestudentstoachieve,astheytendtobemorefamiliarwithconceptssuchascriticalsuccessfactorsandcompetitivestrategy.Theseconceptsoftenrequiremoreclari®cationforundergraduatestudents.

TheBSCprojectisalsodesignedtohelpstudentsappreciatethelinkagesbetweenstrategyandperformancemeasurement.Thisappreciationtranslatesintotwopri-maryeducationalobjectives:gaininganinsightintohowtomeasureperformance,andsimulatingthecomplexprocessorganizationsfollowtoselectactualperfor-mancemeasures.StudentsarerequiredtoidentifystrategicobjectivesforeachBSCperspectiveandtodevelopperformancemeasuresrelatedtotheseobjectives.Wechallengestudentstodesignanintegrated,balancedsetofperformancemeasuresthatcutsacrosstraditionalfunctionalareas.Theirproposedscorecardsshouldincorporateshort-termandlong-termgoals,objectiveandsubjectivefactors,®nan-cialoutcomesandnon®nancialperformancedrivers.Theseeducationalobjectivesrelatedtoselectionofperformancemeasuresapplytoallstudents,butwehavepursuedthemindepthmorewithaccountinggraduatestudentsbycomparingdif-ferentperformancemeasuresandassessingtheirimpactonmanagementdecisions.AllteamsarerequiredtopresenttheirBSCprojectsinclass,wheretheaudiencetakesanactiveroleindiscussingthemeritsandshortcomingsoftheproposedBSCforeachorganization.Weidenti®edthreesecondaryeducationalobjectivesrelatedtotheexperienceofworkinginteamstopreparetheBSCpresentations:developingteam-buildingskills,improvingpresentationskills,anddevelopingskillsusingtech-nologyandvisualaids.

Insteadofatypicalteamprojectthatallowsmemberstosplitthetasksandworkindividuallywithoutmuchsynergy(Porter,1993),theBSCprojectrequiresextensiveinteractionamongteammembers.Studentsmeetseveraltimestoformulateoverallcompanystrategiesandtocoordinatetheire󰀱orttodevelopBSCmeasuresthatareconsistentandcomplementaryacrossallfourBSCperspectives.Basedonstudentfeedback(seesectiononStudentresponsesbelow)welearnedthattheBSCprojectpromotesmuchdebateamongteammembersaboutwhichBSCperspectiveshouldtakepriority,whatthemaindistinguishingcharacteristicsofthestrategyshouldbe,andhowtotranslatetheoverallstrategyintoactionableperformancemeasures.Thestudentteamsarealsorequiredtousetechnologytoconductliteraturesearchesandtocreatee󰀱ectivepresentationswithvisualaidssuchaspresentationsoftware.Thisexperienceaddressesemployers'demandforemergingcompetenciesthatgobeyondsimpletechnicalknowledgetoincludepresentationandinterpersonalskills(Deppe,Sonderegger,Stice,Clark,&Streuling,1991).Thesesecondaryeducationalobjectivesareparticularlyrelevantforundergraduates,astheyneedmoreopportunitiestodevelopcommunicationskillsbeforetheytakeonmoreresponsibilityintheirjobs.

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3.Thebalancedscorecardproject

WehaveusedtheBSCprojectinavarietyofeducationalcontextsoveraperiodofseveralyears.Oneauthorhasassignedtheprojectinrequiredintroductoryman-agementaccountingcoursesattheundergraduate(sophomore)andgraduate(MBA)levels.TheotherauthorhasusedtheBSCprojectinarequiredintroductorymanagementaccountingcourseatthegraduatelevel(MBAprogram)andinarequiredadvancedmanagementaccountingcourseatthegraduatelevel(MSinAccountingprogram).BelowwedescribethevariousphasesoftheBSCproject,highlightingwhatwehavelearnedovertheyearsandhowwehaveadaptedtheprojecttodi󰀱erentcontexts.Allinstructionsregardingtheprojectareavailablefordownloadingfromthecoursewebsites(seeAppendicesA±C).Informationintheseappendicesillustratesthetypesofhandoutsthatmaybedistributedtostudents.Instructorsmaywishtomodifythesehandoutstore¯ecttheirparticulareducationalobjectives,studentcharacteristics,andtypesofprojects.3.1.IntegratingtheBSCprojectinacourse

TheBSCprojectrequiresin-classtimeforintroductionofBSCconcepts,andforteampresentations.BeforestudentteamsbeginworkingontheirBSCprojects,theBSCframeworkisintroducedinclass,usingeithertwo75-minsessionsorthree50-minsessions.ThisintroductiontotheBSCcanoccuratanypointinthecourse,butwehavelearnedthattheearlier,thebetter.Oneauthororganizedthecoremanage-mentaccountingcourseintheMBAprogramaroundthefourperspectivesoftheBSCandintroducedtheBSCframeworkinthe®rstclass.Thisprovidedastructurefortheentirecourse,sothateventraditionalmanagementaccountingtopicssuchasbudgetingandtransferpricingwerediscussedwithintheframeworkoftheBSC'sfourperspectives.Asampleoutlinefora14-weekcourseusingtheBSCastheorganizingframeworkappearsinTable1.SpecialactivitiesrelatedtotheBSCpro-jectareshowninitalics.Inadditiontotheintroductorysessions,thisoutlinerequiresthatenoughtimebededicatedtotheteampresentations.Thetotalin-classtimedevotedtotheBSCprojectwillobviouslydependonthenumberofteamsandthelengthofthepresentations.

WehavealsousedtheBSCprojectincoursesthatwerenotorganizedaroundtheBSCframework.Inthosecourses,theBSCisintroducedafterthe®rstthirdofthecourse,withtheteamproposaldueinthemiddleofthecourse,andthe®nalpre-sentationscheduledtowardstheendofthecourse.RegardlessofwhetherornottheinstructorchoosestoorganizethecoursearoundtheBSC,thetimerequiredforthisprojectresultsinlesstimeforothertopics.Forexample,wespendlesstimeonjoborderandprocesscosting,givelessemphasistovarianceanalysis,anddonotcovercapitalbudgeting.

TointroducetheBSC,wehaveusedjournalarticles(e.g.Kaplan&Norton,1992,1993,1996a),andinformationavailableonBSC-relatedwebsites[e.g.BalancedScorecardCollaborative(2000),BalancedScorecardTechnologyCouncil(2000),Blodgett(1996)andRenaissanceWorldwideInc.(1998),andothersitesmaintained

W.G.Bremser,L.F.White/J.ofAcc.Ed.18(2000)241±255245

bytheBig5accounting®rms].Thesematerialsareeasytoreadandappropriateforundergraduatestudents.Forgraduatestudents,werecommendaddingoneormorecasestudiessuchasMobilOil(Kaplan,1996)orChemicalBank(Klein&Kaplan,1995),orotherBSCmaterialssuchasaCD-ROM-basedinteractiveBSCsimulation(Kaplan&Norton,1999).3.2.Teamproposal

Afterafewweeks,weprovidestudentswiththedocumentinAppendixA.Thisassignmentsheet,whichhasevolvedovertheyearsinresponsetoquestionsfromstudents,containsproposalguidelinesfortheBSCproject.Studentsarealloweduptotwoweekstogatherinformationaboutanindustry,selecttheorganizationtobestudied,andprepareaprojectproposal.Bothfor-pro®tandnonpro®torganizationscanbeselected.Mostgraduatestudentteamschooseanorganizationthatemploysoneoftheteammembers.Sincethisoptionisgenerallynotavailableforunder-graduatestudents,theywillneedmorehelptoidentifyasuitableorganization.Formostgraduatestudents,theassignmentsheetwithproposalguidelinesisoftentheonlyguidancetheyneedfromtheinstructor.

Somestudents,especiallyundergraduates,mayneedguidanceonhowtoconductresearchaboutanorganization'sstrategyanditsindustry.Areferencelibrarianmaybeinvitedtogiveapresentationoncampusresourcesthatarerelevanttothispro-ject.Suchresourcesmayincludeannualreports,articles,investmentadvisoryreports,andwebsites.ItisimportanttoremindthestudentsthattheirliteraturereviewneednotberestrictedtosourcesthatexplicitlydiscusstheBSC;information

Table1

SamplecourseoutlineusingtheBSCastheorganizingframework(MBAcoremanagementaccountingcourse)Week1.2.3.4.5.6.7.8.9.10.11.12.13.14.

Topic

Costconcepts,introductiontotheBSCTeamsareformed

Costbehavior,CVPanalysis

Standardcosting,varianceanalysis

Two-stageallocationsandactivity-basedcostingPlanningandcontrol,implementingtheBSCBSCassignmentsheetisdistributed

Thecustomerperspective:customeracquisition,retention,satisfactionandpro®tability;pricingandproductmixdecisions

Theinternalbusinessperspective:totallife-cyclecosting,targetcosting,qualitycosts,benchmarkingandbusiness-processreengineering.BSCproposalisdueMidtermexam

The®nancialperspective:responsibilitycentersThe®nancialperspective:transferpricingThe®nancialperspective:budgeting

Thelearningandgrowthperspective:managerialperformanceandincentivesThelearningandgrowthperspective:ethicsandculture,learningorganizationsBSCteamreportsaredue;BSCteampresentations

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aboutcustomers,businessprocesses,humanresourcesand®nancialperformancewillalsohelpthemdevelopappropriateperformancemeasuresforeachBSCperspective.3.3.Teamreportandpresentation

Aftertheproposalisreviewedandapprovedbytheinstructor,theteamsareprovidedwithguidelinesonhowtopreparethe®nalwrittenreportfortheproject(AppendixB)andtheoralpresentationtotheclass(AppendixC).Aswiththeproposalguidelines,theinstructionsforthereportandpresentationhaveevolvedoverthepastyears,basedonissuesraisedbystudentsfrompreviousclasses.Forexample,wehavelearnedabouttheimportanceofsettinga®rmtimelimitforthepresentations,andofrequiringthatthepresentingteamdistributeasummaryoftheirrecommendedBSCtotheaudi-ence.Thesetwofeaturesalonehavecontributedtoimprovedclassroomdiscussions.Twentyto30minforeachteampresentationhasbeenadequate.Forunder-graduatestudents,theinstructormay®nditusefultoprovideachecklistofneces-sarystepstopreparefortheprojectpresentations.Oneauthorrequiresthatundergraduatesdoateamrehearsal,whiletheotherauthorcommentsondraftsgivingteamstheopportunitytorevisetheirreportsbeforetheduedate.Dependingonwhetherornottheinstructorwantstoemphasizewrittencommunicationskills,the®nalwrittenreportmaybeeliminated.Eventhen,westillrequestthateachteamturninasummary(beforeorafterthepresentation),withindustryandorganiza-tionalbackground,strategystatement,andrecommendedbalancedscorecard.

WehaveweightedtheBSCprojectheavilyinthecoursegrade.Ourweightshaverangedfrom25to40%,whichemphasizestheimportanceofthisteamproject.Previousresearchhasrecommendedthataminimumof20%weightshouldbeplacedonteamworkinordertoo󰀱erameaningfulincentiveforactiveparticipation(Fiechtner&Davis,1992).Wehavelearnedfromexperiencethatweightsbelow20%oftenresultinprojectsbeingdoneatthelastminute.

Teamsarerequiredtorespondtoquestionsfromtheirclassmatesduringtheirpresentations.Wehavefoundthatthediscussionsbetweenthepresentingteamandtheaudiencecanbecomelivelyforumsforlearning.Oncethepresentationisover,theinstructormaywanttoemphasizeaparticularaspectoftheBSCbyaskingquestionsoro󰀱eringcomments.AlistofsamplequestionsthatwehaveusedtostimulateclassdiscussionappearsinAppendixD.Iftimeallows,theinstructormaybreaktheclassintosmallgroupsafterthepresentationtoaddressthesediscussionquestions.Thisworkswellwithgraduatestudentswhotendtohavemorematurityandrelevantjobexperience.Theaudience'sattentivenessandinvolvementinthepresentationsarelikelytobeenhancedifthestudentsareadvisedthattheymay,orwill,begivenagradedassignmentregardingthepresentations.4.Studentresponses

About600studentshaveparticipatedinthisBSCproject.Inthe®rst®vesectionswhereweimplementedtheBSCproject,werequiredstudentstocompleteanonymous

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evaluationquestionnaires.Weobtained378usableresponsesfromthese®rst®vesections.Studentshaveconsistentlyratedtheprojectfavorably,especiallyintermsofhowtheprojectprovidedanunderstandingofstrategyandhelpedthemgainaninsightintohowtomeasureperformance.Studentsrespondedfavorablybothasmembersofthepresentingteamandaudience.Comparedtograduatestudents,undergraduatesreportedhighersatisfactionwithhowtheprojecthelpedthemdeveloptheirpresentationandteam-buildingskills.

Onekeyfeatureofthebalancedscorecardisitsabilitytointegratetraditional®nancialperformancemeasures,whichtendtofocusonhistoricalperformance,withmorecustomizednon®nancialmeasures,whichoftenaddressfutureperformance.Wewereinterestedinassessingstudents'perceptionsabouttherelativeimportanceofthefourBSCperspectives,giventheparticularstrategyofeachorganizationexamined.Studentshaveconsideredthecustomerperspectivethemostimportantforachievingoverallstrategy,followedbythe®nancial,internalbusiness,andlearn-ingandgrowthperspectives.Thestudents'opinionthatthecustomerperspectiveisthemostrelevantsuggeststhattheyarereceptivetotheuseofperformancemanage-mentsystemsthatincludenon®nancialindicators.Thelowrankingattributedtothelearningandgrowthperspectiveisconsistentwithstudents'commentsabouttheirdi󰁑cultyintranslatingthisdimensionofperformanceintomeasurableindicators.EventhoughtherelativeimportanceofeachBSCdimensionshouldvaryfromorganizationtoorganizationandovertime,wehavefoundthatthis``customerfocus''isacommonperceptionamongstudentswhohavecompletedthisproject.Theemphasisoncustomer-related,strategicmeasuresisalsoconsistentwithrecentstudiesontheuseofnon®nancialmeasures.Ernst&Young'sCenterforBusinessInnovation(1997),forexample,hasreportedthatinvestorstypicallygiveaone-thirdweighttonon®nancialmeasureswhenmakingdecisionsaboutbuyingorsellingcompanystock,andthattheuseofthosemeasureshasastatisticallypositivecor-relationwiththeaccuracyofearningsforecasts.

Basedonstudentresponsestotheprojectevaluationquestionnaires,weestimatethattheyspend,onaverage,21hworkingontheprojectoutsidetheclassroom.Duetotheanonymousquestionnaires,wewerenotabletoassessiftimespentontheprojecthadanyimpactonlearningoutcomesoroverallcoursegrades.

Studentsalsoreportthatmorethanhalfthetimedevotedtothisprojectisspentworkingdirectlywithteammembers.Intheopen-endedsectionoftheself-evalua-tionquestionnaire,studentsoftenmention``interactionwithpeers''asanenjoyablefeatureoftheBSCproject.However,wehavealsolearnedthatinteractionwithpeersmaysometimesbe®lledwithcon¯ict.Teamsarethereforeadvisedtokeepabinder(oneperteam)containingallprojectdraftsandalogofmeetingsheldoutsideoftheclassroom,indicatingwhichteammembershaveattendedeachmeetingandtheagendafollowed.Students®ndtheinformationinthesebinderstobeusefulindicatorsofeachindividual'scontributiontotheteamproject.

Whileteamsarenotrequiredtopresentthebinderstotheinstructor,theinfor-mationtheycontainmaybeusedifateamconsiderstheoptionof``®ring''amem-berwhodoesnotful®llhisorherresponsibilities.Insuchsituations,theteamisrequiredtosubmitthebinderforinstructor'sapprovalofthedecisionto®reateam

248W.G.Bremser,L.F.White/J.ofAcc.Ed.18(2000)241±255

member.Wehaveobservedthatteambindershelptopromotecommitmenttotheteamanddiscourage``free-rider''problems.Anotherpracticethathashelpedtopromoteteaminvolvementandlearningisfortheinstructortoscheduleweeklymeetingsduringthelastmonthofthecoursetodiscusstheteam'sprogressontheproject.

5.Summaryandconclusion

ThispaperreportsonanexperientialapproachtolearningabouttheBSCthroughthestudyof``real-world''organizations.TheBSCprojecto󰀱ersstudentshands-onexperiencewiththeteam-based,cross-functionalandstrategicaspectsofmanage-mentaccounting.Theprojectisdesignedtoaddressseveraleducationalobjectives,including:understandingorganizationalstrategyandcriticalsuccessfactors;gaininginsightintohowtomeasureperformance;anddevelopingoralpresentationandteam-buildingskills.

TheprojecthasseveraladvantagesoverthestudyofBSCcasesalreadyavailableintheliterature,asstudentsareencouragedto``learnbydoing.''Thisexperientialapproachrequireseachteamtoinvestigateanactualorganization,®ndinformationabouttheorganization'scompetitivestrategy,anddevelopaBSCthatre¯ectstheorganization'suniquestrategy.Studentslearntoresearchabouta®rm'sstrategyfrompublicsourcesandthroughinterviews.Insteadofdiscussingthelinkagesbetweenstrategyandperformancemeasurementinavagueway,studentslearnhowtoselect®nancialandnon®nancialperformancemeasurestosupportimplementa-tionandevaluationofthestrategiesofaconcreteorganization.Thisprojectalsoprovidesaframeworkforintegratingtraditionalmanagementaccountingtopics(e.g.®nancialmeasuressuchasreturn-on-assets)withnewer,interdisciplinaryonessuchastargetcosting,customerpro®tability,qualitymanagement,andthedevel-opmentoflearningorganizations.Inaddition,theprojectservesasanopportunityforthestudentstopracticetheirteam-buildingandoralpresentationskills.Whileinstructorscandecidehowmuchstructuretoapplytothisproject,thereisstillmuch¯exibilitylefttothestudents'imaginationandcreativity.Acknowledgements

Theauthorswishtoacknowledgehelpfulcommentsbytheeditor,associateedi-tor,twoanonymousreviewers,andparticipantsattheAnnualMeetingsoftheAmericanAccountingAssociationandEuropeanAccountingAssociation.AppendixA.AssignmentsheetandproposalguidelinesfortheBSCprojectThebalancedscorecardrequirestheorganizationtosetstrategicgoalsandrelatedmeasuresforfourcriticalaspectsofperformance.Thebalancedscorecardlinks

W.G.Bremser,L.F.White/J.ofAcc.Ed.18(2000)241±255249

performancemeasurementswithstrategy.Thefourperspectivesprovidedbythebalancedscorecardare:1.2.3.4.

FinancialÐHowdowelooktoshareholders?CustomerÐHowdocustomersseeus?

InternalBusinessProcessesÐWhatbusinessprocessesmustweexcelat?

LearningandGrowthÐCanwecontinuetoinnovate,improveandcreatevalue?Toachieveourvision,howwillwesustainourabilitytochangeandimprove?

Thebalancedscorecardbringstogetherinasinglemanagementsystemmanyele-mentsofthecompany'scompetitivestrategy.Thisbalancedscorecardprojectinvolvesselectingatargetorganizationforanalysis.Theteamwillhavetogatherinformationabouttheorganizationandgaininsightintoitsbasicstrategies.Possiblesourcesofinformationareannualreports,articlesinthebusinesspressandjournals,books,databases(e.g.StandardandPoors,ValueLine)andmaterialsobtaineddirectlyfromtheorganization.

Theproject's®nalreportandpresentationshouldincludetheorganizationalbackgroundandarecommendedbalancedscorecard.Thisprojectshouldprovideinsightintothedi󰁑cultiesandconsequencesofmeasuringperformance.Theteamshouldbepreparedtodiscussthetradeo󰀱smadeinselectingmeasurements.Notonlyshouldthestrengthsofameasurementbedefended,butalsotheteamshouldbeawareofitspossibledysfunctionalconsequences.Theassignedreadingsrelatedtothistopicprovideguidanceinthisregard.GuidelinesonPreparingtheProjectProposal:1.Thecoversheetshouldcontaintheprojecttitle,teamnickname,namesofteammembers,coursenumberanddate.Theproposalshouldcontainthreepages,typed,double-spaced.

2.The®rstpageshouldmentiontheparticularorganization[orstrategicbusinessunit(SBU)]youselectedfortheproject,andashortdescriptionoftheorga-nizationbackground(itshistory,size,location,linesofbusiness,variousdivi-sions,etc.).Youmaywanttoaddaparagraphabouthowthatparticularorganizationislikelytobene®tfromtheBSCimplementation.

3.ThesecondpageshouldcontainasummaryofthestrategyadoptedbytheorganizationorSBU.Statethestrategyandstrategicobjectivesthatshowhowtheorganizationisimplementingthestrategy:e.g.astrategymaybe``expandbyacquisitions'';acorrespondingstrategicobjectivewouldbe``acquire®ftynewstoreseachyear.''Thispartoftheproposaliscriticalforthesuccessofyourproject,sinceitisbasedonthoseobjectivesthatyouwillbeabletoidentifyappropriateperformancemeasuresforeachdimensionofthebalancedscorecard.

4.Thethirdpageshouldlistthereferencesyoualreadyidenti®edfortheproject.Trytobethorough,butkeepinmindthatyoumayexpandthatlistforthe®nalreport.Ifyouneedhelp,checkwiththereferencelibrarianforinstructionsonhowtosearchABIInform,theBusinessPeriodicalsIndex,andotherdata-bases(includingtheinternet)forinformationaboutthetargetcompanyorits

250W.G.Bremser,L.F.White/J.ofAcc.Ed.18(2000)241±255

industry.Takethetimetodoacarefulliteraturereview(emphasizingquality,notquantity),asaboutathirdofthe®nalreportgradewillbebasedontheliteraturereview.

5.Providecompleteinformationonthereferencelist.Remembertolistyourreferencesinalphabeticalorder,accordingtothelastnameofthe®rstauthorortheinstitutionname.Includethenamesofallauthorsofeachwork(insteadofusing``etal.''),theyearandedition(whenapplicable).Ifusingarticlesfromjournalsorperiodicals,makesuretousethefulltitleofthejournal,withvolume,issueandpagenumbers.SomeusefulguidesforreferencestylearetheChicagoManualandtheAmericanPsychologicalAssociation.

6.Ifavailable,mentionthenamesandpositionsofthepeopleyouplantointer-viewatthetargetorganization.Theteamproposalwillnotbegraded,butIwillreviewitindetailtogiveyoucommentsandsuggestionsforthe®nalreport.Themainpurposeoftheproposalistocreateanincentiveforyoutostartworkingonthetermprojectearlyon,sothatseveralweeksbeforethereportduedate,youwillalreadyhavethetopicwellde®ned,theorganizationselected,andapreliminaryliteraturereviewonthesubject.AnotherpurposeoftheproposalistoprovidemewithenoughinformationsothatIcangiveyoufeedbackaboutpossiblechanges.Forexample,Imayrecommendthatthetopicbenarrowed,expandedorre®ned;suggestotherreferences;orcoordinateyoure󰀱ortswithanotherteamthatmightbeworkingonasimilartopicororganization.Pleasedonothesitatetocontactmeifyouhaveanyquestions.AppendixB.Guidelinesontheprojectwrittenreport

1.Thecovershouldcontaintheprojecttitle,teamnickname,namesofteammembers,coursenumberanddate.

2.Thereportshouldbenolongerthantenpages,typed(tables,graphsandexhibitscanbeincludedandareNOTsubjecttothepagelimit).Thetablebelowshowsthesectionstobeincluded,thepagelimitsuggestedforeachsec-tion,andthecorrespondingnumberofpointsassignedtoeachsectionforgradingpurposes:ReportsectionsExecutiveSummaryCompanyBackgroundTheStrategy

TheFinancialPerspectiveTheCustomerPerspectiveTheInternalBusinessPerspective

#pages0.50.511.51.51.5

#points0.50.51222

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TheLearningandGrowthPerspectiveImplementationIssues

ConclusionsandRecommendationsLiteratureReviewTOTALS

1.511N.A.10

211315

3.Thetotalnumberof10pagesincludestheexecutivesummary.Youdonotneedtochangepageswhenstartinganewsection.Dependingontheparticularnat-ureofyourproject,theabovesectionsmaybechanged(e.g.iftheorganizationalreadyimplementedtheBSC,yourreportwilldescribeandevaluatethemea-surestheorganizationselectedforeachBSCperspective,suggestimprovements,andcommentontheimplementationprocessfollowedbytheorganization).Feelfreetousedi󰀱erentheadingsandsubheadingsasyousee®t.

4.Theexecutivesummaryshouldmentiontheorganizationalunitselectedforthestudy,reasonswhythegroupselectedtodotheBSCprojectonthatparticularorganization,andabriefoverviewofthemainresultsoftheproject.

5.Theliteraturereviewwillincludearticlesonthebalancedscorecard,informa-tionaboutthecompany,andabouttheindustry.Althoughyoudonothaveaseparatesectionofthepaperentitled``LiteratureReview,''itisaveryimpor-tantpartofyourreport.Throughoutthereport,wheneveryoumentionsomethingyoulearnedfromanarticle,companydocuments,orindustrysources,identifythesourceby(nameofauthor,year).Forexample:``Mostcompaniesintheapparelindustryinvestheavilyinadvertising(author'slastname,year).''Then,inthereferencelistattheendofthereport,includecom-pleteinformationaboutthatsource(seeguidelinesfortheproposals).Makesurethateverysourcereferredtointhetextisincludedinthereferencelistattheend,andthatallsourcesinthereferencelistarereferredtointhetext.Whendirectlyquotingfromyoursources,avoidlongquotes.Alsoavoidperforminga``datadump''intheliteraturereview,focusinginsteadonthemainsources.6.Inthecompanybackgroundsection,mentiontheorganizationalunitselectedfortheproject.Giveanoverviewofproductlines,maincustomersegments,sizeoftheorganization,history,etc.Describehowyoucollectedtheinforma-tion(e.g.personsyouinterviewed,theirpositions,orotherdatacollectionmethodssuchasinternetsearches,librarydatabases,etc.).Youmayaddalistofpersonsinterviewedanddatacollectionmethodsasatableattheendofyourreport.

7.Whendescribingthestrategy,youmaywanttofocusontheparticularstrategyadoptedbyoneoftheunitsinsidetheorganization,insteadofaddressingtheoverallcompanystrategy.Makesuretomentionhowthestrategyistranslatedintospeci®cstrategicobjectives.

8.ForeachBSCperspective,recommendappropriateperformancemeasures,anddiscusssomepossiblepositiveandnegativeconsequencesofadoptingthesemeasures.Identifyhowthemeasureshelpguidetheimplementationof

252W.G.Bremser,L.F.White/J.ofAcc.Ed.18(2000)241±255

9.

10.11.12.

13.

thestrategydescribedinthestrategysection.

Implementationissuesrefertoorganizationalaspectsthatmayfacilitateorhindertheimplementationoftheperformancemeasuresyourecommend.Forexample,youmaysuggestthatthecompanystartbenchmarkingtheirperfor-manceagainstsomecompetitors,butadi󰁑cultymaybethelackofindustrydataforbenchmarking.

Intheconclusionsandrecommendationssection,trytoestablishtherelativeimportancethateachofthemeasuresshouldhaveintheoverallperformanceevaluationofkeyemployeesandtheirrewards.

Minimizetheuseofjargonparticulartocertainindustriesorcompanies,unlessthewords/phrasesareessentialtotheissuesdiscussed;inthatcase,includeclearde®nitionsofthosewordsandphrasesinanexhibitorinfootnotes.

Whenyouaddtables,®gs.orexhibitstoyouranalysis,theyshouldbemen-tionedinthebodyofthetextandplacedafterthereferencesectionattheendofthereport.Theyshouldbeableto``standalone''(i.e.notrequirereferringbacktothetextforclari®cation),especiallyintermsofcompletetitles,andclearexplanationsofanyassumptionsmade.

Finalcheck:proofreadyourreportfortypos,omissionsorunnecessaryrepeti-tions.

AppendixC.Guidelinesandtipsonteampresentations

1.Presentationswillbegradedbasedonthefollowingcriteria(total=15points):ORGANIZATION

Introduction/mainpoints/conclusionsTiming

Summaryhandout

CLARITYANDCONTENT

Clearandeasytofollow

SubstantivecommentsandrecommendationsVisualaidsanduseoftechnologyPROCESSOFDELIVERYLookedattheaudienceVoiceprojection

Respondedwelltoquestions

TOTAL=4points12

1

TOTAL=8points143

TOTAL=3points111

2.Thepresentingteamshouldgiveacopyofthebalancescorecardreportandslidesusedinthepresentationtotheprofessoratthebeginningofthepre-

W.G.Bremser,L.F.White/J.ofAcc.Ed.18(2000)241±255253

3.

4.5.6.7.

8.

9.

sentation.Thepresentingteammustalsodistributeasummaryofthebalancedscorecard,listinggoalsandrelatedmeasures,toeverystudentintheaudienceatthebeginningofthepresentation.Thissummaryshouldfacilitatetheunderstandingofthebalancedscorecardgoalsandmeasuresforclassroomdiscussion.

Respondtoquestionsfromtheaudienceastheycome,soastokeepyourcol-leagues'interest.Considerthosequestionsseriously;thinkofthemasaninte-gralpartofyourpresentation,notinterruptions.Ifaquestionisnotclear,rephraseitinyourownwordsbeforeansweringit.

DONOTreadfromyournotes,nortalkwhilelookingatthetransparencies.Lookattheclasswhilespeaking,notatme;yourcolleaguesarethereasonwhywescheduledthosepresentations.

Allowenoughtimeforyourconclusionsandrecommendations,bymakingyourintroductionanddescriptionofcompanybackgroundverybrief.

Givesomethoughttowhatyourtransparenciesorslidesshouldlooklike;writejustkeywordsoneachpage,andhighlightwhatismostimportantineachtransparencyorslide.

Letmeknow(atleastoneweekbeforethepresentation)ifyouneedanyspecialequipment.Ifyouhaveachance,checkallaudio-visualequipmentbeforeyourpresentation(i.e.tryouttheclassroomprojectortoensureitworks,focusisok,appropriatelightingintheroom,etc.).Haveabackupsolutionifsome-thingisnotworkingproperly;forexample,makeenoughcopiesofyourslidestobehandedoutincasetheclassroomprojectorfails.Ifyouareplanningonusingalaptopcomputer,makearrangementswithmediaservicestoensurethatyourlaptopiscompatiblewithourclassroomprojector.

Staywithinthetimelimit(max=30minutes);makesuretorehearseindividu-ally,andtimeyourself.Ifpossible,alsorehearseasateam,tocon®rmthateachmemberobservesthetimelimitallottedtothatperson'spresentation.Everyteammemberisrequiredtomakeapresentation.Therearenopenaltiesforendingearly,butyoulosepointsifyougoovertime(inordertobefairtotheothergroups).

Feelfreetoaskmeanyquestionsabouttheseguidelines,andletmeknowifIcanhelpyouprepareforyourpresentation.

AppendixD.SamplediscussionquestionsfollowingtheBSCpresentation

1.Whatweightsofrelativeimportancewouldyousuggestforeachofthefourperspectives?

2.Whatarethepossibleunintendedconsequencesassociatedwithaparticularmeasure?

3.Howfrequentlyshouldmeasuresbereported(i.e.timeliness)?4.Whatalternativemeasurescouldbeused?

5.Howcanamanagermanipulatemeasuresatorneartheendoftheperiod?6.Whichmeasuresmotivatevaluecreation?How?

2W.G.Bremser,L.F.White/J.ofAcc.Ed.18(2000)241±255

7.Whatarethelinkagesbetweennon®nancialand®nancialmeasures?

8.Howwouldyouclassifythemeasuresaseitherperformancedriversorout-comemeasures?

9.Whichmeasuresaregenericforthis®rm'sindustry?

10.ShouldtheBSCbeusedonlyforcommunicationandcoordinationpurposes,

orshoulditalsobeusedforcontrolandincentivecompensationpurposes?11.Ifusedforcompensationpurposes,whichmeasuresshouldbeincludedinthe

bonusplan?

12.DoestheBSCre¯ectthesharedvisionoftopmanagement?13.HowcantheBSCdrivetheprocessofchange?14.HowwouldtheBSCbecascadeddownward?

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