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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Balanced scorecard for a service company

 American Express Company is a major financial services company, noted for its American Express® card. Some of the performance measures used by the company in its balanced scorecard follow:

Average card member spending Number of Internet features
Cards in force Number of merchant signings
Earnings growth Number of new card launches
Hours of credit consultant training Return on equity
Investment in information technology Revenue growth
Number of card choices  

 For each measure, identify whether the measure best fits the innovation, customer, internal process, or financial dimension of the balanced scorecard.

To determine

Balanced scorecard: The balanced scorecard is a framework used by managers, to focus on non-financial factors related to internal financial processes which improve the external financial performance.

Balanced scorecard perspectives:

  • Customer service
  • Innovation and learning
  • Internal processes
  • Financial performance

To identify: The given performance measures with the balanced scorecard perspectives

Explanation

The performance measures are identified with balanced scorecard perspectives as shown below:

Performance Measure Balanced Scorecard Perspective Explanation
Average card member spending Customer service Measures customer satisfaction towards using the card
Cards in force Customer service Measures customer response in using the card
Earnings growth Financial performance Measures company’s profitability
Hours of credit consultant training Internal process Measures the efficiency and capability of the employees towards quality improvement
Investment in information and technology Interna...

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