![Jacket](/sites/dl/free/0077098595/title/sgn_ma_sm.jpg) Management Accounting Willie Seal,
University of Essex, UK Ray Garrison,
Brigham Young University, Provo, Utah, USA Eric Noreen,
INSEAD, France
Capital Investment Decisions
Internet Exerciseswww: IE10-33 Interpreting the Scores on the Balanced Scorecard
A balanced scorecard involves many different measures of performance ranging
from the company's net income to the amount of time a customer must wait in
line. How does a manager looking at a balanced scorecard know whether a particular
score is good or bad? If a customer waits on average 30 seconds, is that good
or bad? Is a net income of $10 million good or bad? CorVu Corporation is one
of a number of companies that have developed balanced scorecard software. The
company discusses the problem of interpreting performance measures on its web
site www.corvu.com.
Another software developer, Ergometrics, shows how balanced scorecard data can
be visually displayed in the form of gauges on its web site www.ergometrics.com. 1. Explain how CorVu Corporation computes its
normalized scores. 2. Indicate how each of the Key Performance Indicators
(KPIs) in CorVu Corporation's example could be displayed as gauges. 3. Suggest alternative methods for normalizing
scores that might be useful to managers. Your alternatives should allow managers
to tell at a glance whether performance is good or bad and improving or deteriorating. |
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