Excerpt from Destination Resorts International’s annual report:
Our business succeeds or fails based on the quality of the service that our front-line employees provide to customers. Therefore, it is imperative that we strive to maintain high employee morale and minimize employee turnover. In addition, it is critical that we train our employees to use technology to create one seamless worldwide experience for our repeat customers. Once an employee enters a customer preference (e.g., provide two extra pillows in the room, deliver fresh brewed coffee to the room at 8:00 A.M., etc.) into our database, our worldwide workforce strives to ensure that a customer will never need to repeat it at any of our destination resorts. If we properly train and retain a motivated workforce, we should see continuous improvement in our percentage of error-free repeat customer check-ins, the time taken to resolve customer complaints, and our independently assessed room cleanliness. This in turn should drive improvement in our customer retention, which is the key to meeting our revenue growth goals.
1. Based on the excerpts above, compare and contrast the strategies of Applied Pharmaceuticals and Destination Resorts International.
2. Select balanced scorecard measures for each company and link the scorecard measures using the framework from Exhibit 12-5. Use arrows to show the causal links between the performance measures and show whether the performance measure should increase or decrease over time. Feel free to create measures that may not be specifically mentioned in the chapter, but nonetheless make sense given the strategic goals of each company.
3. What hypotheses are built into each balanced scorecard? Why do the hypotheses differ between the two companies?
4. Create a balanced scorecard for Ariel Tax Services. Link your scorecard measures using the framework from Exhibit 12-5. Indicate whether each measure is expected to increase or decrease. Feel free to create measures that may not be specifically mentioned in the chapter, but make sense given the strategic goals of the company.
5. What hypotheses are built into the balanced scorecard for Ariel Tax Services? Which of these hypotheses do you believe are most questionable and why?
6. Discuss the potential advantages and disadvantages of implementing an internal business process measure called total dollar amount of tax refunds generated. Would you recommend using this measure in Ariel’s balanced scorecard?
7. Would it be beneficial to attempt to measure each office’s individual performance with respect to the scorecard measures that you created? Why or why not?