MANAGEMENT ACCOUNTING FOR MULTINATIONAL COMPANIES
PROFESSOR: IGOR N. BARANOV
STUDENTS: IRINA PUTKOVASERGEY KOZLOV
Using Balanced Scorecards (BSC)
forUniversities
• USC Rossier School of Education• hierarchy of relations in Vladivostok University
Content
Examples of BSC map for University
“BSC is like the dials in an airplane cockpit: it gives managers complex
information at a glance.”
R. S. Kaplan and D. P. Norton
Basic BSC premise is:
FINANCIAL
RESULTS
ALONE
CAN NOT
CAPTURE
VALUE ADDING
ACTIVITIES!!!
BSC basics
Idea of BSC evolved in 1990-th, when rising dependence on
non-material resources asked for new management instruments
which used non-financial indicators.
oBrand identification, competence, processes flow =
intangibles
oBSC is a mechanism of giving every particular employee a
view of company strategic goals allowing to control
implementation through Key Performance Indicators (KPI)
oIf measures are successful and truly adopted – credibility for
internal and external shareholders rises ability to satisfy
externally driven demands for accountability (especially important
for non-profit org.).
BSC: 4 perspectives
Measures addressed to: Answer the question:
1 The FINANCIAL perspective How should we appear to our shareholders?
2 The CUSTOMER perspective How should we appear to our customers?
3 INTERNAL business PROCESSES perspective
What processes must we excel at?
4 LEARNING and GROWTH perspective How can we sustain our ability to change and improve?
NB: A critical factor for an effective BSC is the alignment of the 4
perspectives with the company `s vision and strategic objectives.
BSC shows how results are achieved. Because even best objective
can be achieved badly (one area improved at the expense of another) .
BSC for non-profit organizations
Obstacles:
oPoor Oversight
oStrategy
oTransparency
oIncentive cooperation
oCausal linkages
oIntegrated themes
Nevertheless: Those public sector groups that have
started working on BSC report- the process of defining a
strategy and building BSC is far more valuable than
particular measures used.
Why apply the BSC to Education?
oUnlike “good old times”, universities today face growing
expectations and must provide increased accountability for the
outcomes they produce.
oCentral administration: academic scorecard makes easier for
University to accomplish strategic goals though assigning metrics
to every academic unit. Is very important for decentralized (to the
deans level without provost involvement into budget decisions)
institution to see that unit is increasing or declining.
oIt offers a format within which to establish common measures
across academic units, that have shared characteristics (ex.: cluster
of schools within University of Southern California)
oSimplicity of system enables to explain budget decisions by
showing relationship to academic scorecard indicator.
University Stakeholders
oProspective students
oCurrent students
oOrganizations and Individuals seeking for new
knowledge
oFamilies
oAlumni
oEmployers
oColleagues at other Institutions
oGoverning boards
oLocal community
oFriends, Donors, Legislators, the General Public
oFaculty
oStaff
Common University mission
Fundamental missionmission of research universities – excellence in creation, sharing and application of knowledge.
odistinguished facultiesohigh-level research facilitiesoinnovative teaching processosupport technologiesocapable studentsocompetent staffolegislative and public supportoexcellent communication and service-oriented cultureosense of community…
Higher education dashboard indicators
Programes / Courses
Student outcomes
TEACHING AND LEARNINGTEACHING AND LEARNING SCOLARSHIPS AND RESEARCHSCOLARSHIPS AND RESEARCH
Productivity
Impact
University / Professions / Alums
State / Pros Students / Families
Employers
SERVICE / OUTREACHSERVICE / OUTREACH
Faculty
Stuff
WORKPLACE / SATISFACTIONWORKPLACE / SATISFACTION Revenues
Expenditures
FINANCIALFINANCIAL
Observations
o5 dashboard indicators - not prescriptive:
Depending on mission and goals University needs different
components of the board.
oIndividual units might have their own set of indicators:
administrative vs academic units.
oTraditional indicators can`t reflect comprehensive image of
current status of a university and the scope of areas for control
(market position especially)
oCan`t reflect key success factors and don`t offer strategic view of
development:
Ex. In most colleges little attention is paid at measuring students expectations and satisfaction, thus attracting the brightest people is considered a critical success factor.
Ex.: USC Rossier School of Education
Map contains 4 classical BSC perspectives
Ex. OSU
Ex. Vladivostok
Summary
2 main differentiating features of BSC:
1.Simple format of strategic map describes with limited set of
indicators for every perspective.
2.Focus on mutual relationship of perspectives and indicators. Well
articulated map reflects strategic logics of causality between current
activities and long-term success.
The whole process of dialogue focuses, energizes and informs The whole process of dialogue focuses, energizes and informs
faculty and staff thus broadening responsibility for leadership within faculty and staff thus broadening responsibility for leadership within
the unit.the unit.
YOUR QUESTIONS
Thank you for the attention!