You are on page 1of 24

MANAGEMENT ACCOUNTING

GROUP-D

1. Sneha Sharma
2. Debasmita Lahiri
3. Debojyoti Chowdhary
4. Abhishek Gupta
5. Kawsik Roy
6. Monodip Sen
7. Samipan Das
8. Chandranath Chatterjee
Balanced Scorecard-Pantaloon
THE BALANCED SCORE CARD
 Developed by Harvard Professors Robert Kaplan and
David Norton in early nineties

 The logic of BS is that learning and people management


help organizations improve their internal processes
(product development, service etc.) which are critical for
creating customer satisfaction and loyalty

 Customer value creation in turn drives financial


performance and profitability

 BS enables to translate broad corporate goals into


divisional, departmental and team goals in a cascading
fashion which helps an individual to see clearly how his
performance ties with overall performance of the firm.
WHAT IS A BALANCE SCORECARD

 Balanced scorecard is a comprehensive performance

measurement tool that reflects all the measures critical

for the success of the firm’s strategy.

 It’s a performance report based on a broad set of both

financial and non financial measures.

 It is a crucial part of the firm’s effort to better

understand and to implement its strategy.


STRATEGY MAP STRATEGIC MAPS
LINKS BSC
 It is a one-page graphical
representation of what we must do
well in each of the four perspectives
in order to successfully execute our
strategy
 “What we must do well” is answered
in the form of objectives in a
strategy map
 A few strategic objectives within
each of the perspectives are
selected, and then the cause-effect
chain among these objectives are
defined by drawing links between
them.
 The whole idea is represented in a
compelling way so that it is easily
understood and embraced by all
employees.
USES OF BALANCED SCORE CARD

 Translating the vision into operational goals.

 Communicating the vision and link it to individual


performance

 Business planning.

 Feedback, learning and adjusting the strategy


accordingly.
Advantages of Balanced Score
Card
 It translates vision and strategy into action.
 It defines the strategic linkages to integrate
performance across organizations.
 It communicates the objectives and measures to a
business unit.
 It aligns the strategic initiatives in order to attain
the long-term goals.
 It aligns everyone within an organization so that all
employees understand how they support the
strategy.
Continued..
 It provides a basis for compensation for performance.
o The scorecard provides a feedback to the senior management if
the strategy is working.
 Focusing the whole organization on the few key things needed
to create breakthrough performance.
 Helps to integrate various corporate programs. Such as: quality,
re-engineering, and customer service initiatives.
 Breaking down strategic measures towards lower levels, so that
unit managers, operators, and employees can see what's
required at their level to achieve excellent overall performance.
Continued..
 A means for implementing strategy by drawing managers’
attention to strategically relevant critical success factors, and
rewarding them for achievement of these factors
 A framework firms can use to achieve a desired organizational
change in strategy, by drawing attention to and rewarding
achievement on factors that are part of a new strategy.
 A fair and objective basis for firms to use in determining each
manager’s compensation and advancement
 A framework that coordinates efforts within the firm to
achieve critical success factors. BSC enables managers to see
how their activity contributes to the success of others.
LIMITATIONS
 Nonfinancial information is subject to the
reliability of the source and processes used

 Some information are required to be handled


confidentially.

 require timely, appropriate reporting of


some elements of the scorecard.
Continued..

 It is not easy to implement this tool because it


involves a lot of subjectivity.
 The tool is much more complex compared to the
other tools
 The measures that need to be taken is
contingent upon the kind of environment,
industry and the business the organization is in.
 A lot of refinement is still required to be done so
that it becomes understandable to every
stakeholder associated with the organization.
Pantaloon Retail India
Limited

KISHORE BIYANI,CEO AND MD.


ABOUT THE COMPANY
 Found in 1987, ranked amongst top five retail companies in INDIA

 Subsidiary of Future group

 Has over 1000 stores across 71 cities in India and employs over

30,000 people.

 Pantaloon Retail was recently awarded the International Retailer of

the Year 2007


ABOUT THE COMPANY (CONTD.)
 Emerging Market Retailer of the Year 2007 at the

World Retail Congress

 First Retail company to implement BSC in INDIA

 In 2008, Big Bazaar opened its 100th store in Siliguri,

West Bengal, marking the fastest ever organic

expansion of a hypermarket. The first set of Big

Bazaar stores opened in 2001 in Kolkata, Hyderabad

and Bangalore.
ROAD MAP OF THE COMPANY FOR BALANCE SCORE
CARD:::::------------

The road to developing the Balanced score card at Pantaloon began with
keeping in mind the vision of the company. That to achieve sales of Rs
1000 crore and PBDIT of 11 per cent by the year 2005. And with this
vision in mind, the four parameters - financials, customer service, internal
processes and learning and growth - was incorporated, which would be
applicable to the people in the corporate boardroom at Pantaloon to
employees at the head quarters and the stores. So for the employees to
be rewarded, he or she will have to match up to the targets set in each of
the four parameters. The flow begins with the corporate score card as it
was imperative for the top brasses to be excited and convinced about it
before it percolates to the next level. From thereon, it flows to individual
departments. Departments like category management, operations,
human resources, information technology and accounts...
The effects of the company through balance score card are shown in
next slide through the picture:---
“THE EFFECT OF BALANCE SCORECARD”
CUSTOMER PERSPECTIVE

 Customer returns and complaints

 Customer satisfaction surveys

 Delivery time of the apparels

 Coverage and strength of distribution channel


INTERNAL BUSINESS PROCESS

 Number of defects, amount of rework, number of

returns

 Total cycle time, machine efficiency

 Number of accidents, severity of the accidents


LEARNING & GROWTH

 Number of new apparel designs

 R & D output success rate

 Number of training hours

 Employee turnover, number of complaints

 Employee Satisfaction and retention


FINANCIAL PERSPECTIVE

 Sales growth

 PAT growth

 ROI

 EPS
FINANCIAL PERSPECTIVE (CONTD.)
Pantaloon FY 2005 FY 2006 FY 2007 FY 2008

Net Sales Growth (%) 65.51 80.81 73.06 56.06

PAT Growth (%) 94.89 66.43 87.01 5.85

ROCE (%) 14.63 12.00 7.75 10.17

D/E 2.49 1.31 1.14 1.19

Total Assets Turnover 2.14 1.74 1.42 1.31

EPS 17.53 23.86 8.18 7.91

You might also like