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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Balanced scorecard
Several years ago. United Parcel Service (UPS) believed that the Internet was going to change the parcel delivery market and would require UPS to become a more nimble and customer-focused organization. As a result, UPS replaced its old measurement system, which was 90% oriented toward financial performance, with a balanced scorecard. The scorecard emphasized four "point of arrival" measures, which were
1.Customer satisfaction index—a measure of customer satisfaction.
2.Employee relations index—a measure of employee sentiment and morale. 3.Competitive position—delivery performance relative to competition.
Time in transit—the time from order entry to deliver)'.

a.Why did UPS introduce a balanced scorecard and nonfinancial measures in its new-performance measurement system?
b.Why do you think UPS included a factor measuring employee sentiment?

To determine

(a)

Concept Introduction:

Balance score card is an approach which provides information to management to assist strategic implementation. It emphasizes the need to provide the user with an information.

The reason of introducing Balance scorecard and non financial measure in UPS new system

Explanation

UPS believed that mainly focuses on numbers will not help to determine whether target profit is achieved or not. UPS require performance measurement system which have main focus on the drivers that are underlying and financial success level.

UPS determines that their success is depend upon the different performance measures...

To determine

(b)

Concept Introduction:

The employees are a critical factor in any organization.For customers they are the face of the company. So, employee sentiments are important to measure.

The reason UPS included a factor measuring employee sentiments.

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