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Lecture

AYB321 Lecture Notes - Espn Bottomline, Customer Satisfaction, Customer Retention

4 pages76 viewsSpring 2012

Department
Accountancy
Course Code
AYB321
Professor
All

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AYB321 STRATEGIC MANAGEMENT ACCOUNTING
Lecture 7: The Balanced Scorecard
Financial measures on their own are insufficient to guide companies to success.
o They are measures of past strategies don’t look at future performance
Key factors of future financial success:
o Customer relationships,
o Process improvement and innovation and
o Employee capabilities and motivation
Where financial performance is linked to employees and feedback
Should be systematically measured
Should be included in strategic planning
Financial measures: direct and aggregate.
o Important and useful
o Direct measure of performance
But relying too heavily on financial performance measures can encourage a focus on short-term gains at the
expense of long-term value-creation.
o Fundamental value = NPV of all future cash flows
low
discretionary
spending
(R&D, staff
training)
leads to poor
customer
service and
lack of new
products
reduced
porfitability
lost market
share and a
need to
further reduce
spending
sustained
discretionary
spending (R&D,
staff training)
enhanced
customer service
and flow new
products
improved long
term
profitability
gained market
share and funds
available for
further
discretionary
spending
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