Four Perspectives of Balanced Scorecard- Akij Food and Bevarage

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Cost Accounting
Four Perspectives
Of
The Balanced Scorecard
Akij Food and Beverages

The Balanced Scorecard

The balanced scorecard translates an organization’s mission and strategy into a set of performance measures that provides the framework for implementing its strategy. The balanced scorecard does not focus solely on achieving financial objectives. It also highlights the non-financial objectives that an organization must achieve to meet and sustain its financial objectives. The scorecard measures an organization’s performance from four perspectives: 1. Financial

2. Customer
3. Internal Business process
4. Learning and Growth
A company’s strategy influences the measures it uses to track performance in each of the perspectives. Why this tool is called balanced scorecard? Because it balances the use of financial and nonfinancial performance measures to evaluate short-run and long run performance in a single report. The balanced scorecard reduces managers’ emphasis on short-run financial performance, such as quarterly earnings. That’s because the key strategic nonfinancial and operational indicators, such as product quality and customer satisfaction measure changes that a company is making for long run. The financial benefits of these long run changes may not appear immediately in short-run earnings; however given the company’s strategy, strong improvement in non-financial measures usually indicates the creation of future economic value. For example, an increase in customer satisfaction as measured by customer surveys and repeat purchases signals a strong likelihood of higher sales income in the future. By balancing the mix of financial and nonfinancial measures, the balance scorecard broadens management’s attention to short run and long run performance. Never lose sight of the key point. In for-profit companies, the goal of the balanced scorecard is to improve a company’s financial performance. Nonfinancial measures simply serve as leading indicators for the hard-to-measure long-run financial goals. We illustrate the four perspectives of the balanced scorecard using Akij Food and Beverages example. The measures Akij’s managers choose for each perspective relate to the action plans for furthering Akij’s cost leadership strategy: improve quality and reengineer process. Company Profile

History of Akij Group stretches back to later part of the forties. In its infancy, the Group started in humble way with jute trading which was known as the golden fiber of the country, earning highest amount of foreign exchange. Akij Group's ceaseless efforts with dynamic management and support from our numerous clients have led this Group in diversifying its business activities. In the second phase, the Group went into manufacturing handmade cigarettes popularly known as ‘biris’. This sector gave a real boost to the revenue earning of the Group as well as making a substantial contribution to government exchequer. With the passage of time, the Group undertook new ventures and presently there are many units of industries under its umbrella like Food & Beverage Ltd, cigarettes, handmade cigarettes, printing & packaging, textiles, hand board, pharmaceutical, leather processing and real-estate business are in operation, catering jobs for more than 32,000 people in various categories. The Group has plans for setting up more projects. The projects are already in pipeline. Foreign investors have shown keen interest in joining with this group for joint ventures. The matter is under the active consideration and will hopefully soon mature. This will also help the nation's economy growth and will create job opportunities to various professionals. Akij Group is also involved in socio-cultural activities. The Group has been operating a sizeable orphanage free of charge in district town. The Group has also acquired a modern mother & children hospital previously owned by Save the Children (UK). The hospital is...
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