Warning: foreach() argument must be of type array|object, bool given in /var/www/html/web/app/themes/studypress-core-theme/template-parts/header/mobile-offcanvas.php on line 20

What are the four perspectives of the balanced scorecard? Briefly describe each.

Short Answer

Expert verified
  • How are we seen by our shareholders?
  • What do consumers think about us?
  • Which business process must we excel at in order to meet our customers' and financial goals?
  • How can we maintain our progress and add value?

Step by step solution

01

Meaning Balanced Scorecard

Companies use a balanced scorecard as a vital arranging system to arrange their activities, merchandise, and administrations, communicate around their destinations, and plan their ordinary operations.

02

Four perspectives of the balanced scorecard

There are four approaches to the Balancing Scorecard: commerce, financial, customer, and internal learning and development.

  1. The financial perspective helps managers decide how they appear to their shareholders.
  2. Managers can evaluate how customers view us using the customer's perspective.
  3. The theme of "Which commerce process must exceed expectations to achieve customer and financial goals" is from an inside company perspective.
  4. "How can we move forward to create and strive for value?" The issue of assessment is designed from the point of view of learning and development.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Fill in the blanks with the phrase that best completes the sentence.Some phrases may be used more than once and some not at all.

Phrases:

  • cost center
  • revenue center
  • investment center
  • lower
  • profit center
  • higher
  • responsibility center

1. The maintenance department at the local zoo is a(n)___________

2. The gift shop at the local zoo is a(n)____________

3. The menswear department of a department store, which is responsible forbuying and selling merchandise, is a(n)_______________

4. The production line at a manufacturing plant is a(n)

5. A( n)________________is any segment of the business whose manager isaccountable for specific activities.

6. A division of a beverage manufacturing company responsible for aparticular brand of soft drink is a(n)_______________

7. The sales manager in charge of a shoe companyโ€™s northwest sales territoryoversees a(n)

8. Managers of cost and revenue centers are at_____________ levels of theorganization than are managers of profit and investment centers.______

Decentralization divides company operations into various reporting units. Most decentralized subunits can be described as one of four different types of responsibility centers.

Requirements

1. Explain why companies decentralize. Describe some typical methods of decentralization.

2. List the four most common types of responsibility centers, and describe their responsibilities.

Padgett Company has compiled the following data:

Net sales revenue $1,000,000

Operating income 60,000

Average total assets 400,000

Managementโ€™s target rate of return 12%

Compute the following amounts for Padgett:

  1. Profit margin ratio
  2. Asset turnover ratio
  3. Return on investment
  4. Residual income

Using ROI and RI to evaluate investment centers

Tiger Paints is a national paint manufacturer and retailer. The company is segmented into five divisions: Paint Stores (branded retail locations), Consumer (paint sold through home improvement stores), Automotive (sales to auto manufacturers), International, and Administration. The following is selected divisional information for its two largest divisions: Paint Stores and Consumer:

Net Sales Revenue Operating Income Average Total Assets

Paint Stores\( 4,000,000 \) 476,000 $ 1,420,000

Consumer 1,300,000 196,000 1,585,000

Management has specified a 19% target rate of return.

Requirements

1. Calculate each divisionโ€™s ROI. Round all of your answers to four decimal places.

2. Calculate each divisionโ€™s profit margin ratio. Interpret your results.

3. Calculate each divisionโ€™s asset turnover ratio. Interpret your results.

4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results.

5. Calculate each divisionโ€™s RI. Interpret your results, and offer a recommendation for any division with negative RI.

6. Describe some of the factors that management considers when setting its minimum target rate of return.

Explain the difference between a centralized company and a decentralized company.

See all solutions

Recommended explanations on Business Studies Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free