4.

How can Schmall and his team use the scorecard to deal with the challenges faced by the
company in January 2009? What should Schmall do in January 2009?
The global financial crisis started at the early of 2009. Regarding this matter, VWB is
seeing a depression and reduced growth rate in the Brazilian economy. In order to handle the
uncertainty for the future period, Schmall and his team should focus to the parts of the BSC
(balance scorecard). They should work more closely with organization dealers as well as develop
new techniques and service to attract new customers or potential customer. For example, the
dealer can provide a free maintenance for the customer if they purchase a new cars and also
giving an extra discount if the customers purchase car more than one. Schmall and his team
should also be more focus on achieving the maximum production capacities which is by closely
monitoring dealers weekly sales and increase the process efficiency by minimizing the work
hour per car. Furthermore, investing on innovative techniques to reduce the car cost and sustain
its reliability can be good time to invest during recession.
The company also should produce and implement an effective strategy. For instance,
Activity-based costing (ABC) can be used as an effective strategy for the budgeting. There are
three linkages between the ABC and BSC, which are operational linkage, customer profitability
linkage, and budgeting linkage. In the operational linkage, the activity-based costing can identify
the driver for indirect cost and support cost. When the management used the activity base
costing, they can trace expenses accurately to the processes of product development, marketing
and sales, manufacturing, distribution, and service delivery. This cost driver will able to allocate
the cost, quality, and time accurately. The second linkage occurs when the ABC model used to
measure the profitability of individual customer. It is included customer satisfaction and
customer loyalness. In relation with the budgeting, ABC model is used for activity-based
budgeting to combining information on the forecasted volume and mix products and produce
efficiencies to produce a bottom-up budget. In the bottom-up budget, the non-executive also
involve in producing the budget.
Last but not least, Schmall need to conduct meeting frequently with the all of the
divisional manager as to increase the performance as well as discuss about the new strategy and

the progression of the company. Therefore, when all of the managers seat together and making a
decision, it will make the decision to be more accurate.