A Balanced Scorecard Report to the CEO of Weston Foods Limited

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Running head: Managerial Accounting Trimester 1 2018
Managerial Accounting Trimester 1 2018
Institution Name
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Managerial Accounting Trimester 1 2018
Introduction
As an employees of Jersey management consultancy, I was tasked
with preparing a report to the CEO of George Weston Foods limited. The
firm is currently reviewing its budgeting system with the CEO having an
interest in the Balanced Scorecard. Having attended a seminar regarding
a balanced scorecard, the CEO of the George Weston Foods requested our
firm to evaluate the suitability of the balanced scorecard to their
organisation.
This report thereby gives an overview of the George Weston Foods
as well as the BSC system. Afterwards will evaluate the uniqueness of the
BSC to other management systems. Finally, the suitability of the balanced
scorecard will be analysed, and a recommendation made to the CEO on
the way forward.
A description of George Weston Foods (GWF)
George Weston Foods limited is large food company operating in
Australia and New Zealand with over 6000 employees spread across over
58 sites. The firm is a wholly owned subsidiary of Associated British Foods
plc (ABF). ABF is a diversified food retailer who deals with sugar,
agriculture, grocery and ingredients. The firm has over 10,000 employees
who are spread across 46 countries. GWFs have been in operation for over
50 years of which the firm have grown to be one of the largest Australian
and New Zealand’s food processor. The enterprise is structured into four
businesses; Don, Mauri, Jasol and Tip Top. These businesses are
responsible for several diverse activities which includes marketing, selling,
distributing, innovating and manufacturing (George Weston Foods Limited,
2018).
A description of BSC and its features
The balanced scorecard is a strategic performance management
tool, a mini standard structured report that can be applied by managers to
keep a record of the staff execution of activities. This enables the

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Managerial Accounting Trimester 1 2018
management to monitor the staff actions and be able to control the
consequences that may arise from the staff actions. The term balanced
scorecard was primarily used to refer to management performance
reports that were applied by the managers in implementing the
organization’s strategies and operational activities (Ouchi, 1977).
The scorecard can also be applied by individuals in tracking their
personal performance. This though is not commonly practised. The BSC
can be applied in informing personal goal setting and calculating
incentives. Balances scorecard can be defined by the below highlighted
critical features;
o It gives weight to the strategic agendas of the concerned firm
o It involves a selection of a small sample of data to monitor
o The data involved in the balanced scorecard evaluation is a mixture
of financial and non-financial data sets (Muralidharan, 2004).
Balanced score card is an example of a closed loop controller that the
management put in place during strategy implementation. Here the actual
performance is measured, the obtained value is thereafter compared to a
reference value. The difference between the two will determine the
corrective measures that the management need to put in place to
optimise the performance of the enterprise. For the control measures to
be effective there is need to accommodate three aspects;
 Selection of data to be measured
 Setting of the data reference values
 Capacity to make corrective intervention
From the strategy management perspective, all the three features of
closed loop control elements should be derived from the firm’s strategies
and should reflect the capacity of the observer to analyse performance
and make appropriate interventions where necessary. Initially the use of
balanced scorecard was promoted as a general-purpose performance
management system, it was later promoted uniquely as a technique for

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evaluating strategic performance (Kaplan & Norton, 1992). The system has
of recently been adopted by several organisations in their approach to
measure and control strategic performance.
The two factors which still hinder the application of balanced score
card designs are ease of selecting and observing the necessary data as
well as ensuring data selection is in accordance with the observer’s
capacity to intervene.
Features of balanced score card
The BSC is a management tool applied in evaluating an
organisation. Rather than evaluate single features of the frim, the BSC
takes in to consideration numerous features of the firm. From the late
1980s to early 1990 when the idea of BSC was first proposed, the idea has
undergone evolutions with a recommended improvement. The system has
become more flexible and is currently applicable to a variety of firms from
several sectors (Epstein & Manzoni). The effectiveness, ease of use and
designing of the systems have also been made easy. By using the balance
scorecard, several features can be evaluated with equal weight. This way
the success of a firm is evaluated based on its success on all the features.
Even though several features can be added to the BSC based on the
managers intention a good balance scorecard should accommodate at
least the four features described below.
Evaluation of finances: this is one of the most ancient t feature that
the balanced score was designed to measure. Finance plays a direct role
in a firm’s profitability and no manager will show any interest in a tool
which can not evaluate profitability. One of the objectives of the
shareholders is to see the profitability of the firm improves (Kaplan &
Norton, 1996). The managers being agents of the shareholders are
expected to follow in the footsteps of the shareholders. Measurements of
aspects such as return to equity, return to asset and profitability margins
are crucial to the future strategies of the firm. This make this aspect of the