MANAGEMENT ACCOUNTING

GROUP-D
1. 2. 3. 4. 5. 6. 7. 8. Sneha Sharma Debasmita Lahiri Debojyoti Chowdhary Abhish
ek Gupta Kawsik Roy Monodip Sen Samipan Das 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 impro
ve their internal processes (product development, service etc.) which are critic
al for creating customer satisfaction and loyalty Customer value creation in per
formance and profitability turn drives financial

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 h
is 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 it

s strategy.
STRATEGY MAP LINKS BSC

STRATEGIC MAPS
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 obje
ctives within each of the perspectives are selected, and then the cause-effect c
hain 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 emb
raced 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 adjustin
g 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 a
nd 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 al
l 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 whol
e 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 lowe
r levels, so that unit managers, operators, and employees can see what s require
d 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 f
actors A framework firms can use to achieve a desired organizational change in s
trategy, by drawing attention to and rewarding achievement on factors that are p
art of a new strategy.

A fair and objective basis for firms to use in determining each manager’s compensa
tion and advancement A framework that coordinates efforts within the firm to ach
ieve critical success factors. BSC enables managers to see how their activity co
ntributes to the success of others.
LIMITATIONS

Nonfinancial information is subject to the reliability of the source and process

es used Some information are required to be handled confidentially. require time
ly, 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 nee
d to be taken is contingent upon the kind of environment, industry and the busin
ess 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 organiza
tion.
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 F
uture group Has over 1000 stores across 71 cities in India and employs over 30,0
00 people.

Pantaloon Retail was recently awarded the International Retailer of the Year 200
7
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 10
0th store in Siliguri, West Bengal, marking the fastest ever organic expansion o
f a hypermarket. The first set of Big Bazaar stores opened in 2001 in Kolkata, H
yderabad and Bangalore.
ROAD MAP OF THE COMPANY FOR BALANCE SCORE CARD:::::-----------The road to develo
ping 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 incorporate
d, which would be applicable to the people in the corporate boardroom at Pantalo
on 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 l
ike 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 t

he 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 accide
nts
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 Net Sales Growth (%) FY 2005 65.51 FY 2006 80.81 FY 2007 73.06 FY 2008
56.06
PAT Growth (%) ROCE (%) D/E Total Assets Turnover
94.89 14.63 2.49 2.14
66.43 12.00 1.31 1.74
87.01 7.75 1.14 1.42
5.85 10.17 1.19 1.31
EPS
17.53
23.86
8.18
7.91