Maverick Lodging Case Essay

949 Words Mar 22nd, 2014 4 Pages
DEPARTMENT OF ACCOUNTANCY
UNIVERSITY OF ILLINOIS
MEMORANDUM

TO: Professor Wu
FROM: Minghao Tang, AE5
DATE: March 30, 2014
SUBJECT: MAVERICK LODGING CASE

Year 1999 Analysis
In 1999, the Maverick Lodging company implements balanced scorecard to establish a measurement system and control the hotel level management. The balanced scorecard has several attributes, such as tracking financial performance, tracking nonfinancial measures and communicating franchisees and owners objectives of growth. For financial performance, according to Exhibit 7, the Maverick Courtyard has 3.77% growth rate, Maverick Fairfield Inn has 2.22% growth rate and Maverick Residence Inn has 3.5% growth rate. For flow-through flexible budget, both Maverick
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For example, the colors and points system is complex because it is difficult to connect colors and points to the bonus points and the 40% multiply factor may cause managers' confusions. Since it is hard to understand, the scorecard would have problems on acceptance and the implementation process would be difficult. As a result, the scorecard would not reach the maximum effectiveness and efficiency. The second problem is that the scorecard contains uncontrollable factors for managers. For example, managers' performance will be measured by comparing the budgets and actual expenses. However, hotel level managers have no right to determine the budget and this measurement is unfair. As a result, many managers would be reluctant to accept the scorecard. The third problem is that the scorecard is only implemented at the hotel-general-management level. As stated in the case, the hotel-general-management is the last level of the company management and they have no right to discuss the components of the scorecard. In addition, the implementation process lacks communication between different levels of managements. As a result, the scorecard represents the top managements' thoughts and may not be suitable for the bottom level management. Also, the lack of communication may cause hindrance for accepting and implementing the scorecards.
Flow-through Flexible Budget
The

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