A prime perspective of the implementation of process of balanced scorecard approach is the adoption of proper performance measures. Furthermore, the relevance of engaging middle-management in the measurement selection is also clearly associated with the usefulness of balanced scorecard approach. Nevertheless, departments are already aware of their key measures of performance and prime success factors and hence, they are in a best position to frame their own scorecard measures (Rompho, 2011). Balanced scorecard’s strategic management and planning system has been used for industry and business, government, and non-profit corporations throughout the world.
It is very useful for business affairs like strategy and vision of corporation to enhance external and internal communication to supervise the performance of organizations against all objectives. The approach has been designed in a way that can assist managers and executives to attain a balanced view of the organizational performance (Peirson et. al, 2015). In the previous days, this approach was only utilized for measurement of simple performance measures. However, in contrast to this, the new system transforms a company’s strategic plan from efficient document into marching orders for the companies daily.
The measures of balanced scorecard provide the managers a rapid but comprehensive aspect of the company’s performance and encompass both results and procedure measures. For instance, in relation to flying an airplane, the pilot requires descriptive information about the air speed, fuel, bearing, altitude, and other signs that can summarize the present and expected environment (Brown, 2013). This is because dependence on one single instrument can be risky and similarly, the complications of managing a company require that the managers are properly able to view performance in various parts simultaneously. This valuable information can be offered only through the adoption or implementation of a balanced scorecard measure.
In relation to accumulation of information for attaining the usefulness of a balanced scorecard approach, it is notable that there are four relevant perspectives. Firstly, there is a customer’s perspective wherein the managers are bound to know if their company can address the requirements of customers. Furthermore, they must ascertain the solution to the query how do customers view them. Secondly, there is an internal business perspective wherein managers must focus on the critical internal affairs of business that allows them to cater the needs of customers (Hopper & Biu, 2016). Thirdly, there comes a learning and innovation perspective wherein a company’s ability to improve, innovate, and learn interconnects directly to its value as a company.
Lastly, there is a financial perspective wherein in the private sector, the measures of balanced scorecard approach have primarily concentrated on the market share and profits. Furthermore, for the public sector, financial measures can accommodate the outcome-oriented measures needed by the GPRA (government performance and results act). The psychology behind these four perspectives plays a key role in representing a balanced view of a company and by establishing measures under each of these previously mentioned headings and all the relevant areas of business can also be taken into consideration (Venanci, 2012). Besides, it is crucial to note that the balanced scorecard approach itself is primarily a framework and it does not reflect what the measures must be.
Nevertheless, it is a significant matter for the people within the company to decide upon the same. Moreover, much of the success of the balanced scorecard measure relies on how the measures are agreed and the way they are adopted and how they are acted upon (Rompho, 2011). In relation to these four perspectives, it is crucial to note that any company is not bound to adopt or abide by the same (Hopper & Biu, 2016). Instead, they can freely frame or develop their own viewpoints to look at relying on what is beneficial to the success of the organization. This sheds light on the usefulness of such an approach because in other words, the approach assists in addressing all these four perspectives, thereby facilitating in the attainment of maximum efficacies.
Moreover, due to these perspectives, the companies have now been deviating from the traditional scorecard approach and framing ones that are better for their overall environment and by relying on the ultimate objectives (Petty et. al, 2012). This has facilitated in the allowance of assessment to come into light. In other words, the approach of balanced scorecard has significantly evolved to offer a framework that can not only offer measurement of performance but can also assist all the planners in recognizing what must be measured and done on a whole.
Furthermore, what must be viewed as a benchmark, the final outcomes of a scorecard are now assessed by interpreting the information and thereafter, exploring the options available for improvement. Moreover, evaluation or assessment is not only utilized after the production of balanced scorecard approach is undertaken and instead, it also plays a benevolent role in the original development of the scorecard.
Management accounting practice
In relation to management accounting practice, it is notable that the same approach has a potential influence on the performance of companies. Besides, this approach does not have any variations from one market or business to another and therefore, the kind of business or industry does not have any type of influence on such approach. This is the reason why small and medium enterprises based in Malaysia have adopted MAP’s like traditional costing and budgeting on a diversified scale. Nevertheless, there are potential number of small and medium enterprises that have introduced or implemented MAP’s like non-financial and financial measures to assist in the decision-making on the part of management.
However, such MSE’s are more unlikely to adopt comprehensive management accounting practices in their firms owing to their size of organization (Lary & Christopher, 2012). Furthermore, large companies are also required to possess sophisticated management and cost accounting system to make relevant decisions on the costing and pricing of their goods. Moreover, the size of organization has been regarded as significant in relation to adoption and usefulness of MAP’s in organizations (Merchant, 2012). This is the reason why smaller companies are more likely to implement traditional MAP’s rather than modern MAP’s. However, as companies becomes bigger, managers tend to handle higher amounts of information and quantities.
The reason behind this can be attributed to the fact that bigger organizations possess massive resources and are in a dominant stage to control their surrounding with the utilization of MAP’s. Moreover, in countries like Estonia, this approach has been regarded relevant when the size of manufacturing organizations increased (Phua et. al, 2011). The reason behind this can be attributed to the fact that managers needed more information to measure the performance of organizations in relation to client groups and sales region.
Therefore, organization size may have an influence on the MAP’s as bigger companies tend to implement the same when compared to small and medium enterprises (Lawrie et. al, 2016). The intensity of competition in market also plays a benevolent part in motivating companies to adopt MAP’s. Further, as time passes and market competition enhances, such MAP’s are becoming more crucial as it assists companies to compete with their competitors effectively and it also assists them in making better decisions (Vanderbeck, 2013). In addition, MAP’s in organizations today encounter intense competition from both external and internal factors.
Internal factors are the factors like strategy and technology of the company whereas external factors play a role in featuring the external environment at the accounting and business level that can mould the internal system on a whole. Qualified staff of accounting are also crucial to a company as the accounting knowledge of staff can influence the growth, success, and sustainability of the entire company (Phua et. al, 2011). Besides, bigger organizations generally possess finance and accounting department and this is the reason why bigger firms hire qualified and professional accounting staff to utilize MAP for the purpose of internal reporting and to allow managers in the decision-making procedure (Parrino et. al, 2012).
Nevertheless, these analyses clearly shed light on the usefulness of management accounting practice in the accounting field and in relation to the small and medium enterprises, the MAP’s adopted or implemented by qualified accounting professionals may have a material impact to the growth and productivity of the company. Hence, the qualification of accounting staff is primarily one of the basic factors that may impact the implementation of MAP’s in a company (Shim & Siegel, 2009). In contrast to this, the shortage of qualified accounting professionals may serve as a vital aspect as far as the implementation of contemporary management measures of accounting are concerned.
Therefore, in relation to the previously mentioned discussion, it can be seen that the usefulness of balanced scorecard and management accounting practice has been widely recognized in the entire corporate world and therefore, the same are viewed as significant tools of measuring performance. Besides, the limitations of traditional cost accounting can be easily eradicated through the adoption of measures like balanced scorecard because managers use it for more better evaluation of performance and unlike traditional methods.
it is not biased in nature (Parrino et. al, 2012). In contrast to this, management accounting practices also possess a significant influence on an organization’s performance and therefore, many larger organizations have adopted or implemented the same for an enhanced outcome. Besides, many small and medium enterprises have also attained benefits from the implementation of such approach within their frameworks (Vaitilingam, 2010).
Qantas’s critical success factors
The critical success factors of the company shed light on the performance of the company. The critical factors shed a strong highlight regarding the company. The CSF of the company are as follows:
Strong management – It has a strong hold over the management. They believe in giving the best service to the passengers. Hence, the employees are trained in a manner that will provide premium service (Qantas, 2017).
Competent workforce – The second CSF factor is the competent workforce. It is correctly remarked that the company has a diverse and competent workforce that operates on board. The staffs are highly qualified and competent thereby providing edge. It is vital for the staff at the aviation industry to have string communication skills and the training program at Qantas is designed in a manner that aims at regular enhancement.
Route – The route taken by the airline determines the success and is a key factor. This really means where it should fly and how frequently to reach the destination. Qantas is connected to more than 186 destinations that includes Australia and covers more than 120 countries.
Non-stop flights – it is important that the flight should have the service of nonstop destination. It helps the flight to reduce the travel time in reaching a specified destination. Qantas service is more of nonstop flights and hence provides it a leading edge in catering to the requirements of the customer (Qantas, 2017).
Flight services and promotions – the service promotions in terms of aviation means targeting the customers who are loyal and this lead to focus on the customers who generate revenue. The in flight services pertains to seats, ease of ticket booking, aircraft type, etc and such services make Qantas a premium in comparison to others. Qantas contains cardiac defibrillators that can be used when an emergency arises (Qantas, 2017).
Cost utilization – competitive pricing is the need of the hour and the chief factor for success. It helps in attracting many profitable avenues. Qantas manage the costs and focus on the price and thereby is a key factor when it comes to success of the airline.
Qantas key performance indicators (KPIs)
The KPI’s of Qantas are as follows:
Satisfaction of customer and brand reputation
Customer satisfaction in one of the major factor that helps in attaining success. At Qantas it is the key performing indicator. Qantas has taken time to build the customer base and has attained the level of profit by catering to the need of the customers. It is important that a business should be diverted to meet the customer needs and to manage the brand as perceived by the customers (Qantas, 2017). Qantas has keep a track of the sentiments and measure the satisfaction of the customers.
Management of knowledge
The best part of Qantas is that it has a strong management that ascertains and evaluate the data. This helps in knowing the progress of the company. Knowledge management system are fashioned in a manner that trace the metrics of the indicator thereby helping the organization to learn more about itself. In the absence of knowledge management, the business cannot know about the potential it contains. For Qantas, the knowledge management is derived from internal discipline, process and other strategies. Qantas is able to utilize the performance metrics ate every level from employees to management and hence create a favorable atmosphere (Qantas, 2017).
Social media and awareness of the brand
Social media presence is another added advantage if used in a lucrative manner. The presence of social media has provided a strong support to Qantas thereby driving the business to a considerable height. As Qantas is having a strong business and catering to the need of the customers, the aid of social media has ensured it to reach to a commendable height.
References
Brown, P. (2013). How can we do better?. Accounting Horizons. 27(4), 855–859. DOI
Hopper, T & Bui, B. (2016) Has management accounting research been critical?. Management Accounting Research. [online]. vol. 31, pp. 10-30.
Lawrie, G.V., Abdullah, N.A., Bragg, C. and Varlet, G. (2016) Journal of Modelling in Management. [online]. 11 (4): p. 889–910.DOI:
Merchant, K. A. (2012) Making Management Accounting Research More Useful. Pacific Accounting Review. Parrino, R, Kidwell, D. & Bates, T. (2012). Fundamentals of corporate finance. Hoboken,
Peirson, G, Brown, R., Easton, S, Howard, P. and Pinder, S. (2015) Business Finance, 12th ed. North Ryde: McGraw-Hill Australia.
Petersen, C. and Plenborg, T. (2012) Financial statement analysis. Harlow, England: Financial Times/Prentice Hall.
Petty, J. W, Titman, S., Keown, A. J., Martin, J. D., Burrow, M. and Nguyen, H. (2012) Financial Management: Principles and Applications, 6th ed. Australia: Pearson Education Australia.
Phua, Y. S., M. A. Abernethy, and A. M. Lillis. (2011) Controls as exit barriers in multiperiod outsourcing arrangements. The Accounting Review. [online]. 86, p. 1795–1834. [Accessed 10 September 2018]
Qantas. (2017). Qantas 2017 annual report & accounts.
Robinson, M., & Last, D. (2009) Budgetary Control Model: The Process of Translation. Accounting, Organization, and Society. NY Press
Rompho, N. (2011) Why the Balanced Scorecard Fails in SMEs: A Case Study. International Journal of Business and Management. [online]. 6 (11), p. 39–46.
Shim, J. K & Siegel, J G. (2009) Modern Cost Management and Analysis. Barron’s Education Series
Vaitilingam, R. (2010) The Financial Times Guide to Using the Financial Pages, London: FT Prentice Hall.
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Venanci, D. (2012) Financial Performance Measures and Value Creation. State of art . New York: Springer.
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