Week_11_Management_Accounting

Week_11_Management_Accounting - WEEK11: Objectives Explain...

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Prepared by Bonnie Hampson WEEK 11: Performance Measurement - The Balanced Scorecard Objectives Upon successful completion of this module you should be able to: Explain   the   concept   of   Kaplan   and   Norton’s   Balanced   Scorecard  (BSC); Describe the BSC and discuss why it emerged; Discuss various aspects of the BSC as a framework for performance  measurement; and Understand the application of the BSC. Introduction The   Balanced   Scorecard   (BSC)   is   one   of   the   latest   innovations   in  management accounting practices that has received a significant amount of  attention in recent years.  This week’s material introduces you to the concept  of Kaplan and Norton’s Balanced Scorecard (BSC).  It begins by describing  the BSC, discussing why it emerged, and providing some examples. The  material then focuses on the four perspectives of the BSC and discusses its  strategic as opposed to operational role, before concluding with an overview  of the research into the use of the BSC. The readings provide you with an  understanding of how to prepare a BSC.  Readings are also provided to assist  in you gaining an understanding of some of issues facing organisations which  use the BSC. Through conducting research you will find numerous published journals and  articles relating to the BSC in both the private and public sectors.   I have,  however, selected a  number of those  which should provide you  with an  appreciation of the application of the BSC. A note about the Reading Materials for this course: I have spent a fair amount of effort to summarize and discuss the key points  contained   in   the   Required   Readings.   These   summaries   and   discussion  points   appear   in   the   lecture   slides   and   weekly   communication   letter.  Obviously you will benefit from reading the original articles. The content  knowledge of these Required Readings is examinable. 1
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Prepared by Bonnie Hampson Additional Reading is provided for those students who wish to extend their  knowledge beyond the minimum.   What is the Balanced Scorecard? Historically, companies’ operational and management control systems have  been built around short-term financial measures that have not been linked to  long-term strategic objectives. A BSC attempts to overcome this deficiency by  using a set of performance measures that serve to link a company’s long-term  strategy with its short-term actions. The BSC communicates the long-term  strategy   to   all   levels   of   the   organisation   so   that   both   departmental   and  individual objectives are aligned with the company’s goals. Reading 1:
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Week_11_Management_Accounting - WEEK11: Objectives Explain...

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