Accounting and Financial Management | Case Study

Running Head: Advanced Management Accounting
Accounting and Financial Management
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Executive Summary
The paper aims to discuss related to “Origin Energy Company” which is involved in “gas
exploration”, “production”, “power generation” and “energy retailing”. Identify the key
stakeholders of the Company and discuss each and their strategies to meet the need.
Link the cause and effect of each strategy and objective and discussion on the
performance measurement indicators that are the lag indicator and the lead indicator.
Explain the “Balanced scorecard” along with the 4 strategies of the performance
measurement perspective and relating them with the cause and effect between the
strategies and the measures, along with the discussion on the 5th dimension strategy of
the performance measurement of the balanced scorecard.

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Table of Contents
1. Introduction....................................................................................................................3
2. Discussion......................................................................................................................3
2.1. Key Stakeholders....................................................................................................3
2.2. a. Cause and effect linked between the objective and the strategy.......................4
2.2. b. Lag and lead indicators to measure performance..............................................5
2.3. Balanced scorecard................................................................................................6
2.4. The 5th dimension to the balanced scorecard.........................................................9
3. Conclusion.....................................................................................................................9
Reference........................................................................................................................10

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1. Introduction
The paper discusses the Origin energy company which is involved in “gas
exploration”, “production”, “power generation” and “energy retailing”. It is the huge
power generation company of Australia's that supplies power to its immense customer.
However, the paper discusses its key stakeholders and the strategy implemented on
them. Each strategy is linked with the objective of the environmental, social and
economic and the performance of the company is measured on the “lag” and the “lead”
indicators. However, for the “Balanced Scorecard”, the performance is measured on the
“financial”, “customer”, “internal business process” and “learning and growth
perspectives”. The 5th dimension of the balanced scorecard is the innovation and the
training strategy
2. Discussion
2.1. Key Stakeholders
Stakeholders are those people or a group who are affected and can be affected
by the organization or a company's objectives, policies and actions. Stakeholders can
be any individuals, employees, creditors, suppliers, directors, governments, the
owner(s), union and community from which the Company draws its resources or funds.
Key Stakeholders of the “Origin Energy Company” are their “Customers”,
“Employees”, “Investors”, “Communities” and “Business Partners” along with these
strategies which can meet the need (D’Oca, Hong, & Langevin, 2018).
 Customers
The strategy of the Company is to eliminate the greenhouse gas consumption
effect of its customers. It will be helpful because it reduces the use of carbon and
provide green energy to its customer. The Company increases the rate of
consumption of low carbon and increase the sale by 10% of the total supply
chain of greenhouse gas emission. Reducing the emission of greenhouse gas
has undoubtedly reduced the complaint rates and ombudsman by 30% from its
customers.
 Employees

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Company incorporated the strategies which can reduce the hazardous activities
and working condition in the Company. Increased development opportunities so
that the employees can diversify the work nature and scope. Company provides
opportunities that attract the employees and help gain rewards and recognition in
the workplace. Reduced the scope of accidents, injuries and damage, which
made the employee feel safe working in the Company.
 Investors
Company implementing strategies of providing returns to its shareholders who
invest the shares and efforts in the Company for the development. Providing
shareholder's return will help them to sustain in the Company and also help the
stakeholder to invest more in the Company and increase the economic structure
and development.
 Communities
Strategies that implemented by the Company for the community stakeholders by
reducing the greenhouse gas emission in the electricity supply chain which helps
in reducing the pollution caused in the environment and harm health of the
society and community which may lead to increase respiratory disease and air
pollution in the environment and can cause a severe climate change in the
environment. Company taking measures in reducing the wastes and reusing
them further in supplying electricity. By which communities are benefited by
health and environment.
2.2. a. Cause and effect linked between the objective and the strategy
a) The “Environmental” objective of a company is to reduce “greenhouse gas
effects” on the customer's energy consumption and the environmental strategy
taken by the Company by reducing the use of carbon by 10% in the total supply
chain of greenhouse gas emission by 2012. The strategy will help the Company
to get recognized as a leading provider in respect of supplying green energy
product. Communities’ environmental objective minimizes the adverse effect on
the environment by reducing the waste and by reusing them to sustain in the long
run with the environmental benefits. Reduction of greenhouse emissions will
boost the health of the environment and that will impact on the health and safety

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of the communities and customers to retain in the long run. The strategy of the
Company to reduce the emission to 10% less than the “National Electricity
Market” by 2020 and reducing the production by 15% by 2012.
b) The “Social” objective of the Company has to “maintain”, “support” and “Goodwill”
of the Company from “employees”, “customers”, and “communities”. By resolving
the complaints of the customers and actively solving the ombudsman issues,
using this strategy will gain the customers' trust and support in the long run and
sustain in the market. Must consult all communities by locations where the
Company has a significant impact on the area or location. Supporting the
employees and providing recognition to the employees for excellent work.
Listening to the employees whether they face any problems regarding workplace
and work issues. The social objective for the employee is to eliminate the
hazards and practices which lead to risk one's life, illness, or injuries in the
workplace, which is unacceptable for the Company to suffer for such damage.
Company has implemented a strategy to remove the barriers of employment,
development and opportunities for the employees to sustain and retain in the
work environment. Company provides the opportunity for the employees to
diversify and sustain in the community and operate well for the Company's
needs.
c) “Economic” objective of the Company is related to its investors, stakeholder, or
shareholder who invest in the Company to provide the resources. The
Company's economic objective is to provide sustainable returns that invest for
the Company to make the economic development and to make the Company
sustainable in the long run. However, this company strategy is to provide the
maximum return to its shareholder on investment and to ensure a sustainability
supply of energy to the society or community.
2.2. b. Lag and lead indicators to measure performance
Lag indicator is an output measurement indicator that measures the past
performance of an employee. It can be - number of accidents, the number of death rate,
customer satisfaction. Lag indicator measures the changes when there is a change in
the economy. It checks the past record and uses to confirm the past happening in the

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economy which establishes a trend. It is a measurement of after the event, which is
used to draw a chart of progress. It measures to calculate the change in the labor cost
per unit of the manufacturing output when the number increases the factories produce
less per employee because of slow orders. Lag indicator can evaluate the safety of the
Company like when an employee is injured, then it checks the reason behind of injury
and whether it’s severe or normal one. However, it does not inform about the
Company's performance rate when in preventing accidents or incidental occurrence. It
does not measure the overall prevention and safety due to this sudden occurrence
(Sheehan et al., 2016). Lag indicator examples for safety measures are – frequent injury
and severity, employee's compensation cost, workdays lost and chemical release.
Lead indicator is an indicator to predict the future performance of the employee
or Company. It can be- usage of safety equipment, user guide usage and intake of per
day calories. It predicts the future event and changes the future event as per the
requirement. It includes safety measures and prevents the uncertainty or unfavorable
event occurrence before it happens. It helps to improve safety by initiating awareness
and preventive steps. Show the stakeholders about its Company’s measurement on
taking steps to achieve excellence in safety. It is an indicator of future safety
performance measurement and improvement in nature due to its proper steps, initiation
for control and prevention of accidents and injuries (Sheehan et al., 2016). Lead
indicator can be evaluated based on the behavioral audit, safety audit, safety training
programs, identify the hazardous object or risk assessment and maintenance of
machinery or equipment. Indicators of health include the weight check, physical activity,
mental health and immunity check (DOYLE, 2017).
2.3. Balanced scorecard
“Balanced scorecard” is a measurement of performance which used to evaluate,
control and improve the business or the Company's function and outcomes. It is a vital
measurement of the management system. It focuses on the organizational goal which
laid by organizational strategies to implement the objective. It is the way to look at the
organizational strategic objective and helps to select the appropriate ways to reach its
organizational goal. It focuses on both the high and low-level strategy measurements. It

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is a strategic framework which divided into four perspectives related to organizational
success are “customers”, “finance”, “internal business process” and “learning and
growth” (Muda, Erlina & AA, 2018).
Balanced scorecard performance measurement perspectives
Financial
Financial perspective is one of the significant perspectives of the “Balanced
Scorecard” for measuring the performance level of a company through the net income
and return on investment. For an organization that uses financial help from any
institution and shareholders are excellent support for the Company to fulfill its objective
(Muda et al., 2018). The traditional financial performance measures good work from the
industrial ages which measures its financial measures through contribution margin,
Return on investment, net profit and earning per share (Medel-González et al., 2016).
However, the Origin Company has significant support from its shareholders and
stakeholder who help in economics to attain a sustainable return for future goal and
thus, Origin energy Company provides its shareholders a good return. Its strategy is to
provide the shareholder returns and come within the top three competitive companies.
Customer
Balanced scorecard links with the performance measurement by evaluating the
thought of the customer for the Company or organization. These thoughts or
perceptions of a customer is based on services and products a company provides.
Customer satisfaction is a good indicator for a company to make profit and earn
revenue from the service a company provides. Customer satisfaction is an indicator of
success and directly influence the economy of the company and performance level. The
customers main focus on the quality, cost, performance and services and time.
Customers are concerned about the quality of product and services received from the
Company (Hansen, & Schaltegger, 2016).
The origin energy company supplies gas, energy and power for its customers
however Company's strategy is to reduce the carbon quantity in the supplying green

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energy product. It has reduced the customer's complaints and ombudsman rate by 30%
and help to relieve from in-taking or using carbon product. Reduce the emission of
Greenhouse gas in the electricity supply chain to 10%, which benefited the
environment. Company is thinking about the customers and the stakeholders or
shareholders of the Company by providing them a greater return on investment.
Customers are getting reduce the number of harmless products and services which help
the Company to increase the demand for the supply and help the Company to gain
revenue from it. The cost of the product and service depends on the quality and the
services given by the Company to its customer which helps to retain the existing
customer and add some more new customers accepting the services.
Internal Business Process
“Internal business process” is another way of the “performance measurement” of
the “balanced scorecard”. It is a process where a company should think about the
customer and what the need and requirement of the customer from the market and
company. Proper decisions and actions were taken by the company will help to lead in the
market. Managers have to take adequate steps to check the internal process that enables
satisfy the needs of the customer. The internal process measures the performance of an
organization which impacted on some factors of the customer satisfaction that related to
the quality, time cycle, productivity and employee skills (Zahoor & Sahaf, 2018). For the
Origin Energy Company employees satisfaction is included which provides care and
support for its employees related to health and uncertainties which has gain truth and
opportunities. Customers are also satisfied by its involvement related to environmental
care which supported by the customer by reducing the complaints and ombudsman.
Learning and Growth
“Learning and growth” are interrelated to each. Learning based on the internal
process and the customer based measure of the balanced scorecard. The business has
to identify the vital aspect of the Company to attain success in the competitive ground.
However the target keep changing as per the market requirement. The Company’s
ability to provide an innovative, improved and learning to its employees as well as to the

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customers to make awareness regarding product and the services. Whenever Company
is introducing the new product or offers any facilities to its customer (Winardi, Sulistyo &
Kusmayanti, 2019).
2.4. The 5th dimension to the balanced scorecard
Innovation and Training strategy has to be included in the fifth dimension to the
“balanced scorecard”. “Innovation and training” strategy include the sustainability of the
organizations to achieve its objective through change and improvement in the
organization. Innovation for the product and services the origin energy company is
providing to its customers. The product which customers are using has to be effective
and harmless and that will increase the sustainability rate and retention rate of its
existing customer. Conducting proper training to its employees to improve the services.
An active employee can help to attain knowledge regarding social and environmental
activities. Proper training and decision-making processes can help to deal with any
hazardous situation and save environmental perspectives.
3. Conclusion
It can be concluded that the company strategy is based on the balanced
Scorecard and its Performance Measurement indicator, which measures the
performance of the Company on the “Financial”, “Customer”, “Internal Business
Process” and “Learning and Growth” indicator. This Company is the largest energy
supply company in Australia and maintain the environmental strategy, social strategy
and economical strategy to sustain in the market and is achieved huge return from its
investment and provide a huge return to its shareholder. It balanced scorecard
determined its “Financial”, “Customer”, “Internal business process” and “Learning” which
helped evaluating the company’s goal and including the 5th dimension of the balanced
scorecard the company’s objective will get protected, improved and sustained in the
long run with the help of employees and customers.

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Reference
D’Oca, S., Hong, T., & Langevin, J. (2018). The human dimensions of energy use in
buildings: A review. Renewable and Sustainable Energy Reviews, 81, 731-742.
DOYLE, G.C. (2017) Safety Performance: Leading v's Lagging Indicators (2017).
Available at: https://eazysafe.com/blog/workplace-health-safety/safety-
performance-leading-vs-lagging-indicators/ (Accessed: 31 March 2020).
Hansen, E. G., & Schaltegger, S. (2016). The sustainability balanced scorecard: A
systematic review of architectures. Journal of Business Ethics, 133(2), 193-221.
Medel-González, F., García-Ávila, L. F., Salomon, V. A. P., Marx-Gómez, J., &
Hernández, C. T. (2016). Sustainability performance measurement with Analytic
Network Process and balanced scorecard: Cuban practical
case. Production, 26(3), 527-539.
Muda, I., Erlina, I. Y., & AA, N. (2018). Performance Audit and Balanced Scorecard
Perspective. International Journal of Civil Engineering and Technology, 9(5),
1321-1333.
Muda, I., Roosmawati, F., Siregar, H. S., Manurung, H., & Banuas, T. (2018, January).
Performance Measurement Analysis of Palm Cooperative Cooperation with
Using Balanced Scorecard. In IOP Conference Series: Materials Science and
Engineering (Vol. 288, No. 1, p. 012081). IOP Publishing.
Originenergy.com.au (2020) Originenergy.com.au. Available at:
https://www.originenergy.com.au/content/dam/origin/about/our-approach/docs/
sustainability-engaging-with-stakeholders.pdf (Accessed: 30 March 2020).
Originenergy.com.au (2020) Originenergy.com.au. Available at:
https://www.originenergy.com.au/content/dam/origin/about/investors-media/
documents/sustainability-report-2012.pdf (Accessed: 30 March 2020).

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Sheehan, C., Donohue, R., Shea, T., Cooper, B., & De Cieri, H. (2016). Leading and
lagging indicators of occupational health and safety: The moderating role of
safety leadership. Accident Analysis & Prevention, 92, 130-138.
Winardi, A. W., Sulistyo, B., & Kusmayanti, I. N. (2019). Designing Performance
Measurement System Of Pt Kidang Kencana Sakti By Using Balanced
Scorecard. eProceedings of Engineering, 6(2).
Zahoor, A., & Sahaf, M. A. (2018). Investigating causal linkages in the balanced
scorecard: an Indian perspective. International Journal of Bank Marketing.