AYB321 Lecture Notes - Espn Bottomline, Customer Satisfaction, Customer Retention
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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
leads to poor
lack of new
share and a
and flow new
share and funds
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