Management Accounting Report: Amcor's Balance Scorecard Analysis

This report provides an in-depth analysis of Amcor, a multinational packaging company, using the balance scorecard (BSC) approach in management accounting. The introduction highlights the importance of strategic programs and evaluation tools in the current economic landscape. It explains the BSC's role in considering four key business aspects—finance, customers, internal processes, and learning and growth—to formulate effective strategies. The report details the features of the BSC, including objectives, measures, targets, and initiatives, and explains how it helps organizations measure performance and improve strategic focus. The analysis then focuses on Amcor, outlining its vision, mission, and overall strategy. A strategic map is developed, covering financial perspectives (revenue, shareholder value), internal business processes (quality partnerships, operational efficiency), and learning and growth (employee development, training). The report also differentiates between the BSC and traditional performance measurement systems, emphasizing the BSC's comprehensive approach. The conclusion reiterates the BSC's suitability for strategic analysis and performance improvement, particularly for companies like Amcor. The report references various academic sources to support its findings.

Management Accounting

Contents
Introduction-..........................................................................................................................................2
Balance scorecard and its features-........................................................................................................3
Description of the Company-.................................................................................................................5
Company’s vision-..............................................................................................................................5
Company’s mission-...........................................................................................................................5
Overall Strategy-................................................................................................................................5
Strategic Map-.......................................................................................................................................6
Draft preparation of the strategic map of the business Company”...................................................6
Difference between BSC and traditional performance measurement systems.......................................7
Suitability of BSC Approach.................................................................................................................9
Conclusion...........................................................................................................................................10
References...........................................................................................................................................11

Introduction-
With the ramified changes in economic and complex business structure, each and
every organization are endeavouring towards using the advance strategic program and
evaluation tools to win over the market. The balance scorecard approach helps the
organization to consider the four main points of the business for formulating the business
strategies. It also helps management to improve the work program as per the needs and
demand of the clients. The balanced scorecard is a measure of the performance metric that
helps in strategic management to identify the functions and improve the internal functions of
a business and analyse the external outcomes. It assists in measurement and providing
feedback to organizations. It helps in the better decision making of the organization. It helps
in motivating good behaviour in the organization by differentiating four areas that need to be
analysed. These areas are business processes, customers, finance and learning and growth.
With the help of balanced scorecard, it helps to identify factors that degrading the company’s
performance. It enables organization in implementing the strategy mapping to know the value
addition within an organization. The investigation has been done related to training and
knowledge resources to analyse the growth and learning. There are different analyses related
to the different aspects of the organization to meet the organizational objectives. We are
analysing the suitability of balanced scorecard on the company named Amcor. It is a
multinational packaging company situated in Switzerland and Australia. It is a very renowned
company that handles different type of packaging services. There are so many verticals that
can be analysed with the help of Balanced Scorecard approach that leads to the growth of the
organization.

Balance scorecard and its features-
As per the Kaplan and Norton, balanced scorecard approach is the four factors tools
which are used by the organization to evaluate the internal and external factors of the
business. Balance scorecard is basically a tool to evaluate the performance management of an
organization. It helps managers to keep a track on the business activities within the
organization, and then control and monitor the consequences coming from the actions. It
helps in the creation and implementation of the strategies in an organization (Ansoff, 2014).
It has basically four perspectives- Financial Perspective, customer perspective, internal
process perspective and learning and growth perspective. Basically, balanced scorecard
analyses these four perspectives and find out the major things in the strategic plan that can
create an effect on any of the perspective. This approach basically helps in creating an
analysis of these four verticals (Joshi, 2015). Sometimes, this approach has proved very
useful in successful strategy creation and implementation. These four verticals basically
describe the four important requirements to reach the objectives. Financial Evaluation is the
basic and traditional feature of the balanced scorecard. It deals with quantitative values like
revenues and profits. This feature is very important to others but most of the time, more
emphasis has been given to this. A customer plays a very important role in the achievement
of the objectives. An organization cannot sustain without the presence of the customers. It is
necessary to know the customer perception to provide the product and services as per their
choice in order to fulfil the requirements. Generally, organizations do a survey to know about
the thought of the customers. It gives them a wider knowledge regarding the improvements. It
can develop the knowledge regarding the new process and it ultimately leads to the growth of
the organization. The more dynamic the business organization, the more effective and
balanced will be the scorecard.
Every company should know about the core competencies that can help in
maintaining the internal environment of the business organization. It defines the important
things needs by an organization to achieve objectives. It defines the way of evaluating the
performance by measuring the efficiency of the operations. Employees are the most
important resource for an organization as they carry on the process of producing the products
and services. Toda, employees are given total leverage to bring up new ideas to grow in the
market. Employees must possess the proper set of skills and knowledge to carry out various
functions. It is important to provide time to time learning sessions and training to the

employees to make them better. It helps the employees become obsolete and can reduce
employee turnover too.
There are some features of Balanced Scorecard and the four perspective needs to be
considered with respect to the features below-
1. Objectives- Organizations objectives is one of the major important reason for conducting the
strategic planning It is the goal of every organization to fulfil the objectives of the
organization in an efficient way. The balanced scorecard should reflect the objectives of the
organization like an increase in the market share and create higher profits. It is important to
consider the objectives of the organization while doing any sort of analysis.
2. Measures- Measures should be taken according to the objectives. All the objectives must put
in a place to analyse the progress of the achievement of the objectives. These measures can
show the level and actual growth of the success.
3. Targets- Every company sets different targets to reach the ultimate goals of the organization.
The setting up of the targets can be department wise or company wise. There will be some
specific targets that have been set up to achieve the pre-decided measures. Setting up of the
targets is important to know the way of reaching to the measures (Baporikar, 2017).
4. Initiatives- Initiatives are the actions taken by the organization y achieve the specific
objectives. This is the last stage that decides the achievement and fulfilment of the growth
(Smith, 2013). It is important to take initiatives because actions are very important to
complete a specific task and to undertake measures (Lambert, 2012).
The main objective of using the approach of the balanced scorecard is to create a system that
can help an organization to measure the performance and ways to improve the same. The
balanced scorecard is becoming as popular as it shows the clear picture of the activeness of
organizational goals. It is considered as a management strategy that can be used for different
functions of the organization. It helps the management to understand and to know the
objectives and roles in a bigger way. It also enables the organization in doing quantitative
analysis. Some organizations become unsuccessful in using this method of strategic analysis
as mostly they fail to understand the objectives of the organization. Balanced scorecard
breaks down the objectives and makes it easier for the organization and employees to
understand the same (Roßbach and Karlow, 2011). The balanced scorecard is needed by
business organizations as it increases the focus on the strategies of the business and always
leads to improving organizational performance. It also helps in targeting the major

determinants of the future performance. It helps in proper communication in the organization
related to the vision, mission and strategies (Kaplan and Atkinson, 2014).
Description of the Company-
For the implementation of the Balance scorecard approach, in this report, Amcor
Company has been taken into consideration. Amcor basically produces packaging services
that are flexible and rigid for a different type of products like food, health, beverage and
tobacco (Hess and Liedtka, 2012). It also involves in protecting food, beverage,
pharmaceutical, medical, personal, home and personal care goods. It is listed on Australian
Securities Exchange. It has also included some of the international market indices that
basically reflect the international status of the same.
Company’s vision-
The main vision of the company is to enter into packaging services of big products
and achieve a good profit and sales in upcoming five years. It also wants to enter into a
competition of providing customized products in the market (Lambert, 2012).
Company’s mission-
It wants to provide customer satisfaction on a higher level and approach the other
segments of the market too. They want to get success by providing higher profits to their
stakeholders (Badia-Miró, 2015).
Overall Strategy-
Their overall strategy includes people that are totally engaged in developing high
performance and working hard as a team. They have the customers that are loyal to the brand.
They are growing and prospering Amcor’s quality, innovations and services. They are
providing a continuous growth and profits to their investors. They provide a very positive
work environment for the employees (Suri and Sushil.,2017).

Strategic Map-
The main motive behind the creation of a strategic map is to create some changes in
the current business structure and to achieve the decided objectives and goals. It shows the
diagram that can be used by the company to note the initial strategic goals created by the
organization. The entire strategic map has been structured by focusing on the present and
future goals and objectives. It also gives an idea about the future outcomes and present
outcomes of the organization and increases the turnover of Amcor. The strategic planning
focuses on expanding the supply of diversified products in the packaging manufacturing. It
also wants to make some innovative techniques in order to optimize production (Keyes,
2011).
Draft preparation of the strategic map of the business Company”
1. Financial Perspective- Amcor has a good sustainability in the market and it wants to satisfy
the needs of the customers as well as the stakeholders and shareholders. It wants to maximize
the shareholder’s value to a great extent. It wants to create a position in the market that can
help in increasing the value of the company’s shares. It focuses on increasing the revenues of

the organization (Flanigan, 2016). It covers all the revenue, cash outflow and business
functioning of organization which could be considered while determining the projected return
on capital employed. If the project undertaken gives a higher return on capital employed as
compared to others then it will be inferred that Amcor Company is creating value on its
investment. This financial perspective sets him qualitative targets for the organization
(Ibrahim, 2015).
2. Internal Business processes- It wants to create a quality partnership with the big players in
the market as Amcor is involved in the packaging of basic products only to it can be an
opportunity for the company to enter into some other packaging service companies to create a
quality partnership. It can help both the companies in growing at a higher pace. It is focusing
on creating more effective for its operations. It wants to involve a low cost of the operations
to create products of the same quality in order to make higher profits. It never wants to
compromise on the quality of the product as it can hamper the customer base of the company.
People show their brand loyalty towards a particular brand because of the quality that
provides satisfaction to the customers (Pangarkar, Kirkwood and Pangarkar, 2012).
3. Learning and growth- Amcor have a very good staff and it provides a very positive
environment for the employees to work in so that they cannot face any kind of issue. It has a
strategy to recruit more qualified staff in order to increase the efficiency of the operations. It
has also created training programs for the growth and development of the employees. They
can become master in doing their work and it is an advantage for the organization only
(SALONER, 2018).
Difference between BSC and traditional performance measurement systems
These both measurement tools have their values and used by managers to measure the
performance of the company and formulate effective strategies to win over the market
(Boscia, and McAfee, 2014).
Traditional measures
There is a difference between BSC and the traditional measures of performance
measurement. The traditional measures of performance measurement only keep a track of the
financial verticals of the company (Detyothin et al., 2015). They only focus on the profit
earned from the sales and requirement of the capital. They analyse the financial functions that
are totally based on the internal accounting books and reports like profits, revenues, cash

flows, return on assets, earning per share and economic value addition. These are mainly
called as lag indicators as they can show the past data and present the historical information
only. But the analysis of quantitative measures is also sufficient to control and improve the
performance of the organization. It can also help in the decision-making process of the
company for the long term growth. The traditional measure tools could only assist in
formulating the strategic plans but with the ramified changes in economic, management
department needs to identify the solution of the future problems at the spot. However, due to
the uncertainty of the future, managers fail to identify the future issues but by using the
different advance measurement tools, they could easily estimate the problem areas and its
impact on the business in determined approach. The traditional performance measurement
tools are ratio analysis, ABC costing and capital budgeting which is used by the management
to identify whether the organization is performing well in the market or not. However, these
tools measure company’s performance on the basis of revenue and other statistical data. If the
manager wants to see the growth of the business and evaluate internal and external factors
then these traditional measure fails to identify the core aspects.
Balance Scorecard measures- Balance Scorecard is a performance measurement tool that
basically addresses the weakness of the traditional performance measurement systems. It
includes both the quantitative as well as qualitative verticals of an organization (Worek and
Micari, 2016). It possesses a strategic non-financial metrics for performance measurement. It
shows a balanced view of the position of the organization. BSC is beneficial in this
competitive business environment as it helps in better strategic implementation as it takes all
the intangible assets into accounts and is considered as a big advantage. It helps in linking the
strategic management system with the strategic objectives of the organization. It focuses on
the four different perspectives that give a good advantage to the company (Kaplan and
Atkinson, 2014). The balanced scorecard approach is a best suitable method which assists
organizations to formulate the strategies and work program which could be used by the
organization to win over the rivals in business. It segregates the duties and work program to
implement the effective strategies and increase the effectiveness of work program. The
balance scorecard approach also assists in mitigating the marketing and internal control issues
and evaluates the internal work functions of the organization. After that these factors are used
to customize the products and services as per the needs and demand of the clients at large.
This balance scorecard approach assists in the evaluation of the case which evaluates the

present and future business issues of company and keeps the management ready to encounter
those issues in determined approach.
Suitability of BSC Approach
BSC is suitable for Amcor because it helps in analysing the effectiveness of each function of
the organization as well as it helps in creating a quality partnership in expanding the business.
It describes the strategy of a company and decides the cause and effect relationship. It also
helps in clear communication within the organization related to the strategies (Ansoff, 2014).
It communicates strategies to all the members by translating the same into understandable
measures operational targets. Balanced Scorecard also focuses on the non- financial measures
and considers it as a part of the program in order to achieve the desired financial performance
(Boscia, and McAfee, 2014). It only finds the important measures in the identification of the
critical areas to work upon. The manager totally focuses on the implementation of the
strategy in an effective way. It also helps Amcor in highlighting the major trade-offs that help
the manager in the critical conditions when it became impossible to consider the operational
and financial measures together. It can also help in preparing a clear picture in front of
stakeholders and shareholders. It identifies the requirement of training and development to
the employees. It deals with the best and effective measures of the performance to achieve the
goals and objectives of the organization. It can create more efficiency and effectiveness in the
different operations of the organization (Ansoff, 2014). The balance scorecard approach set
up four different quadrants which assists organization to meet its short term and long term
objectives in effective manner. There are several factors such as financial perceptive,
customers need, learning and growth and interwork culture. These all factors assist in making
business more effective and clients oriented at large. Therefore, after evaluating these four
quadrants, it could be inferred that balance scorecard approach helps in setting target for the
employees, identifying the issue and employees conflicts in the value chain activities,
implement the learning and growth strategies and customized the products and services as per
the needs and demand of the clients in market. These four factors are the major parts for
formulating the strategies on the top level. Management department of company could use
these strategies to win over the market and implement the effective working in organization.
Therefore, by using the balanced scorecard, management could also evaluate the internal and
external factors which might impact the future growth of the organization.

Conclusion
Balanced Scorecard is a very effective approach as its name denotes, it creates a
balance between the activities and the objectives of the organization. It helps in creating
strategies to reach the goals of the company. It is considered as a mechanism that helps
management to track the company’s performance and creates management strategy
accordingly. It helps in providing a very extensive overview of the objectives of the company
by splitting them into the parts rather than limiting the same in terms of financial values. It
helps Amcor in creating a strong brand name and creates a very good and potential customer
base. It can create a good reputation among the workforce of the organization too. Now, in
the end, it could be inferred that each and every company should start to use the balanced
scorecard approach over the traditional measurement approach. This approach helps in
implementing the strategic decisions and increasing the overall outcomes of the business.

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