ACCT 701: Creating Balanced Scorecards to Support Business Strategies

This report analyzes the balanced scorecards of Applied Pharmaceuticals and Destination Resorts International, contrasting their strategic focuses and performance metrics. Applied Pharmaceuticals prioritizes innovation, R&D yield, and product quality, aiming to maximize shareholder equity. Destination Resorts International emphasizes employee development and customer satisfaction through improved service quality and reduced check-in times. The report examines the hypotheses built into each company's balanced scorecard, highlighting differences in financial goals, customer perspectives, and employee strategies. Additionally, the report evaluates the benefits and drawbacks of measuring performance within Ariel Tax Services and discusses the value of measuring performance across different offices, emphasizing the importance of a balanced scorecard in assessing overall business success.

Running head: ACCT 701
Acct 701
Name of the Student
Name of the University
Author Note

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Table of Contents
Problem 12-21..............................................................................................................................2
Exercise 12.7................................................................................................................................5
Bibliography.................................................................................................................................7

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Problem 12-21
1. The analysis of the details of both the companies reveals a significant difference existing
in the strategies of both the companies. The strategy of Applied Pharmaceuticals suggests
that the main focus of the company is to constantly introduce new products and
manufacture them with the least amount of defects possible. The company focuses on its
R&D function by continuously investing in the latest available technology and hiring the
best possible employees to do the job. The brand image of the entity is built around the
fact that the company is the first to produce a new product and the first to improve their
quality. Therefore, constant innovation and the highest form of quality are the two of the
most important aspects of the strategy of Applied Pharmaceuticals. The focus of the
company is also centred on maximising the return on stockholder’s equity.
In case of Destination Resorts International, the main aim of the company is to
keep the morale of the company happy and reduce the employee turnover. In order to do
so, the company constantly focuses on improving the performance of the employees by
providing them required training in using the technology. Hence, the company believes
that the reduction of error free check-ins is essential for customer retention. The financial
goals of the company are aimed at increasing its revenue generated from operations.
2.

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3. In case of Applied Pharmaceuticals, the hypothesis which are built into the balanced
scorecard are as follows:
a) Producing lower defect products and introducing new variety of products is essential for
the success of the business;
b) The company has a brand image among the consumers and it needs to match up with it
to stay relevant in the market;

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c) Innovation is one of the primary aspects of success for the business which determines
whether the business will continue to be successful in the long run or not;
d) Shareholders will ultimately determine their profits on the basis of the returns provided
by the entity on the equity produced by the business. Hence, ultimately the returns
provided on their equity is the only appropriate measure for the profitability of the
business; and
e) In case of the employees, it is assumed that training will be essential to improve the
overall performance levels and it will work under all circumstances.
In case of Destination Resorts International, the following hypothesis have been built into the
Balanced Scorecard of the entity:
a) Quality of service is one of the most essential factors for the success of the business as it
determines the level of customer satisfaction;
b) Reduction in time required for check-ins is essential for the business to improve the
quality of its overall services;
c) Employees are one of the important aspects of the business and retaining them is
essential for the success of the business.
The hypothesis of both the Balanced Scorecards differ because of the differences in the
nature and objectives of the business. While technology and R&D is an important factor of
the business of Applied Pharmaceuticals, retaining employees and developing them is the
priority of Destination Resorts International. The financial goals of the entities also differ
along with their view of the customers. These are the reasons for the differences in the
hypothesis.

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Exercise 12.7
2. The hypothesis which are built into the Balanced Scorecard for Ariel Tax services are as
follows:
a) Higher revenue generation is an indicator of the efficiency of the business;
b) Providing quality services is the only manner in which the business can grow; and
c) Efficiency is critical for the success of the business under all circumstances.
3) The potential benefits of implementing such a measure would a good indicator of the
customer satisfaction as the customers are always looking to reduce the amount of taxes paid by
them. It also means that the employees are working efficiently and the internal processes of the
business are efficient. A comparative analysis of the performance also becomes easier. However,
the disadvantages would include the lack of separation between the performances of the
employees. It would be difficult to understand the performance of every employee as it is
difficult to determine their efficiency levels. Similarly, it may result in the increase in fraudulent
practices amongst the employees to meet the criteria. Hence, the business may be better off by

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not implementing such a measure in its Balanced Scorecard as it increases the emphasis on the
short term goals of the entity.
4. Yes, it would be beneficial to measure the performance of each of the offices as the Balanced
Scorecard measures all the essential criteria required to understand whether the business has
been a success or not.

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Bibliography
Dudin, M., & Frolova, E. (2015). The Balanced Scorecard as a basis for strategic company
management in the context of the world economy transformation. Asian Social Science.–
Vol1, (3), 282-288.
Gibbons, R., & Kaplan, R. S. (2015). Formal measures in informal management: can a balanced
scorecard change a culture?. American Economic Review, 105(5), 447-51.
Terziev, V., & Stoyanov, E. (2017). A general principle of the development process of balanced
scorecards as an instrument of control. IJASOS-International E-Journal of Advances in
Social Sciences, 3(8).