BSC Implementation at Huawei: A Management Accounting Analysis

This report provides a comprehensive analysis of the Balanced Scorecard (BSC) as a management tool, specifically focusing on its potential implementation within Huawei. It begins by introducing the BSC and highlighting its key features, emphasizing its integration of both financial and non-financial performance measures. The report differentiates the BSC from traditional performance measurement systems, outlining its strategic focus and long-term orientation. It argues for the suitability of the BSC for Huawei, citing the company's need for continuous strategic review in a competitive networking and telecommunications market. The analysis covers the four key perspectives of the BSC: learning and growth, customer, financial, and internal processes. Ultimately, the report recommends the adoption of the BSC to improve Huawei's overall performance, product quality, and strategic alignment. Desklib provides a wealth of resources, including similar solved assignments and past papers, to support students in their studies.

Running head: MANAGEMENT ACCOUNTING 1
Balance Score Card for Huawei
Student by (Name)
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MANAGEMENT ACCOUNTING 2
Table of Contents
Executive summary.....................................................................................................................................3
Introduction.................................................................................................................................................3
Client's firm.................................................................................................................................................4
The Balanced Score Card and its Features...................................................................................................6
Features of BSC making it more useful.......................................................................................................7
Difference between the Balanced Score Card and the Traditional Performance Measurement Systems.....8
Suitability for the implementation of the Balanced Score Card to the Huawei Company............................9
Recommendations.....................................................................................................................................11
Conclusion.................................................................................................................................................11
References.................................................................................................................................................13

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BALANCE SCORE CARD FOR HUAWEI
Executive summary
The report is an about the Balanced Score Card as a tool of management. The report
critically analyzed the general view and the features of the Balanced Score Card.This important
tool us to be used in the management system of the Huawei Company. The Balanced Score Card
is an integration of the Traditional measurement performance system. The difference between
the Balanced Score Card and the Traditional measurement performance system is also provided
in the report. The Balanced Score Card plays a key role in the management system. The reasons
for its application in the Huawei Company is provided again in the report. Finally, the report
provided for the recommendations and the conclusions on the entire process of using the BSC as
a stool of management.
Introduction
Every company in the entire world is happy with the efficient management and skilled
personnel. In an attempt to achieve the quality output and good customer relations, they have to
use different managerial tools. This report is about the efficient use of Balance Score Card in the
management system. There are management tools that are very common in the field of business
management. Some of them include: Activity-Based Costing and the Time Driven Based
Costing. But for this firm, they have decided to use the Balance Score Card system. Most of the
companies prefer the use of Balance Score Card because it has several advantages over the other
management tools (Shah, Malik & Malik, 2011). The report will, therefore, look at the company
that uses the management tool, the description, and features of the BSC, the effectiveness of its
functionality in the chosen company. The final part of the report is concerned with the
recommendations and conclusion on the use of the Balance Score Card system. Huawei is the

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client's company that will be using this kind of the management tool. By use of the BSC, I
believe that the management system of the company will improve. Apart from the management
system, there will be the maximization of the profit and improvement in the quality of the
products. This new tool is very essential in the Huawei Company because of its vast advantages
over other management tools (Naranjo-Gil, Maas & Hartmann, 2009). The BSC is a management
tool which does not require much training as compared to other tools available in the market. By
use of this system, the company will be able to save a lot regarding the production and running
costs. The report will further analyze the difference between the Business Score Card and
traditional measurement performance system. The study also analyses the effective use of the
Business Score Card to the Huawei Company. Huawei being one of the leading networking
companies, it requires constant review of its strategic plan .This will help it in improving the
overall performance and focusing on the important areas of the business.
Client's firm
The name of the company planning to use this new system of management is Huawei.
Huawei is accompanied that is known in the market for electronics and mobile applications. For
some years, the company has been dealing with the Android smartphones. Its products are used
in every continent and are liked by many customers (Perkins, Grey & Remmers, 2014). The
Huawei Company was founded in 1987 by a lead researcher known as Ten Zhengfei. He was an
ex-military officer. The company is known as Networking and telecommunications providers all
over the world. The company is based in China and has its headquarter in Shenzhen Guangdong .
Huawei Company first started as a private company, and its main mission was to provide the
consultation and operational services to its clients. During the early times of its formation, the

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company was operating within the China itself before it spreads its wings in all over the world
(Rassafiani, Ziviani, Rodger & Dalgleish, 2009).
Currently, the company employs more than 140000. Most of its employees are majoring
in the research. Around 45% of the employees are doing great work in the field of research. The
Research and Design of the company is spread in most of the world's leading business countries.
Some of these countries include Russia, Canada, United States of America, Africa and other
Arab countries (Rassafiani, Ziviani, Rodger & Dalgleish, 2009). The company has a variety of
the products within the market. They also offer affordable prices to the customers, and this
makes it be the customer friendly. Huawei Company uses the latest technology in the software
development designs. New employees are given a team of the lead researcher to help them learn
new skills which can improve the performance and quality of the products produced by the
company.
By use of the Business Score Card, the company will be able to perform better and
improve on the products. The production cost of the company will also reduce. The company has
been ranked as one of the best in the field of networking and telecommunication. It had worked
with some companies to achieve its objectives. Some of the companies that have worked with the
Huawei Company include Vodafone-Mobile and the Motorola Company (Nørreklit, Nørreklit,
Mitchell & Bjørnenak, 2012). These companies have been very useful in its development. The
company of the world's first class brains. Because of this reason, the implementation of the
Business Score Card in its operation will be an added advantage to its operation. The company
will spend less in training its personnel in the use and application of the Business Score Card to
the system. In the field of Networking and Telecommunication, There is always a tight
competition that exists between the companies that offer the service. For this reason, each

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company is trying to come up with the best management tool which can help in improving the
overall performance of the company (Van Seters, Ossevoort, Tramper & Goedhart, 2012). The
Chief Executive Officers and other management personnel must always work hard to ensure the
company achieves the best . This will intern enable the company to achieve the set objectives.
The Balanced Score Card and its Features
The Balanced Score Card is one of the management tools that is used by some
companies. Due to its efficiency, some clients /companies are trying to implement it in the
management system. The Business Score Cards has a variety of features which enable it to
perform a number of the functions as compared to other forms of the management tools. As
compared to both the Activity Based Costing and the Time Driven Based Costing, the Business
Score Card has the following features for its efficient functionality (Perkins, Grey & Remmers,
2014). The Business Score Card is the strategic and management tool that considers the non-
financial aspects of the company performance (Malmi & Granlund, 2009). These may include
the customer satisfaction in the business processes (Wiersma, 2009). The tool also helps in
giving the clear picture of the company shortly. Such as the reduction in the customer's services
which may later boost their earnings. By use of the Business Score Card approach, the company
will also take into account the potential loss that may feature in the plans of the business
(Brudan, 2010). This may be caused by the poor customer relationship and satisfaction. The tool
is very useful when the company has an objective in mind. In other words for the effective
performance of the Business Score Card, the company must be able to set the objectives and the
plans.
The Balanced Score Card was started by the following scholars. That is Dr. Robert
Kaplan and Dr. David Norton. The main aim of the formation was to replace the Traditional

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ways of measuring the companies and cooperate performance (Haiza, Muhammad & Hoque,
2010). This management tool was started at the Harvard Business Review in the article of 1992.
Features of BSC making it more useful
The Balanced Score Card has some features which make it more useful in the
management system. The system involves the collection of data and the analysis of the
company's information from the four important perspectives.
These include the following:
The learning and growth perspectives -this includes the knowledge and resources of the
company. All the knowledge related objectives are solved under this category. The skills must
satisfy the business processes at all costs (Chen, Yang, Chen, Chen & Chen, 2010). These
include the quality development of the new products. The products and services must meet the
customer's need to ensure the full implementation of this perspectives.
Customer perspective-The second feature of the Business Score Card duels in the
customer perspective angle. This includes the satisfaction of the customer’s needs. The
customers need should always be in line with the company's objectives and goals. The effective
performance of the Balanced Score Card should be congruence with the company's short-term
and long-term goals (Yigitbasioglu & Velcu, 2012).
The third feature of the Balanced Score Card focused mostly on the financial perspective.
For every company to realize a maximum profit and quality output, there must be the financial
projection. This should include the operational and current expenditure of the company. The
BSC will help the company to compare the past and the future financial projections of the
company (Chenhall & Moers, 2015). The financial perspective feature of the Business Score
Card may include the collection of the traditional financial data concerning the performance of

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the sales and the expenditure. Through the use of this tool, the company can understand its
growth concerning the market changes. The Score Card system plays a key role in the
performance of the business. This ranges from the customers self-evaluation to the overall
evaluation of the company (Shah, Malik & Malik, 2011). The system is therefore very useful in
the Huawei Company. The company will be able to analyze the competitors and improve the
quality of its products.
Difference between the Balanced Score Card and the Traditional Performance
Measurement Systems
There exist some differences between the balanced Core Card and the traditional
performance Systems. The traditional performance system is not linked to the company's
strategic plan as compared to the Balanced Score Card. The strategy relates to the long-term
strategy of the business or the company (Shah, Malik & Malik, 2011). The traditional
performance system focuses mostly on the short-term goals of the company which brings the
disconnection to the entire performance of the business. But for the Balanced Score Card
focusses mostly on the general goals and strategy of a company for a period.
The Balanced Scorecard is considered to be an integrated form of the management
system which has reduced the limitations of the Traditional performance Systems. It proves the
overall view of the companies regarding their performance. The normal performance system
should be with the line of the vision of the company; this is not with the traditional measurement
performance system (Naranjo-Gil, Maas, & Hartmann, 2009). The traditional performance
measurement system deals only with the financial performance and not the entire strategy of the
company. Some of this financial performance is related to the profit that is earned from the
selling of the goods. This form of performance focusses only on sole financial measures. The

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internal accounting reports that are focused on the system include profitability, the flow of cash,
earning received from shares, the return on assets and the economic values. All these do not
focus on the overall decision making since they are regarded as short-term plans (Shah, Malik &
Malik, 2011).
The Balanced Scorecard (BSC) performance system focusses mostly on weaknesses that
are caused by the traditional performance system. It has an addition to the strategic non-financial
performance; then the traditional financial metrics which do not provide a balanced on
performance checkup (Perkins, Grey & Remmers, 2014). The Balanced Scorecard performance
system can make the company understand its competitors regarding the overall performance of
the company. Unlike traditional performance measurement system which only analyses the
results of the performance of the company. The managers can predict the future performance of
the company and how to go about by the expected changes that may arise. This is not done by
the traditional ways performance measurement system. Through the measurement of the
performance from four perspectives, there is interdependency among the departments of the
company. The performance ranges from the financial to the customer relations (Rassafiani,
Ziviani, Rodger & Dalgleish, 2009). Lastly, through Balanced scorecard system, the managers
can evaluate their performance, unlike the traditional performance measurement system. It
focused mostly on the strategic plan while the traditional system focusses on the already gotten
results of the company
Suitability for the implementation of the Balanced Score Card to the Huawei Company
The Management tool is one of the most accepted and used by the companies. Since its
main objective is to help in the strategic planning of the company, the company must first have
laid down objective before its implementation. By using the management tool within the Huawei

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Company, there will be an improvement in both the management system and the quality of the
products (Nørreklit, Nørreklit, Mitchell & Bjørnenak, 2012). The Business Score Card approach
is very useful to the managers. For example, they can identify all the aspect of the business they
intend to monitor. The BSC helps them to have close monitoring of the business by focusing on
the performance trend. For example in Huawei company, the managers will be able to focuses on
the areas that need improvement and beneficial to the company (Cinquini & Tenucci, 2010).
Apart from the identification of the areas that need improvement, the company is also able to
understand whether the wide objective of the company is met. The company may be planning to
achieve some objectives for the financial year (Van Seters, Ossevoort, Tramper, & Goedhart,
2012). To understand whether the objectives were met, the use of the Score Card will be very
essential. By use of score Cards, the company will know the content of the strategic plans and
whether the plans and the goals are met in time.
The Business Scorecard acts as an evaluation team. Both the managers and the employees
will be using the tool for self-evaluation. When the company meets its objectives, the employees
shall have achieved the objectives. They may also use the scorecard to understand their strengths
and weaknesses within the company. For instance, the Huawei will be able to analyze the
strengths and weaknesses in comparison to the competitors. The same tool will be used in
improving in those weak areas (Malmi & Granlund, 2009).
Many companies have tried the approach, and it has been very useful to their businesses.
They can maximize the profit from their sales and also analyze the taste and preferences of the
customers. Through this, the Huawei Company is also able to improve the software and also in
the Networking (Malmi, & Granlund, 2009). New strategic plans may also be designed if the

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initial plans are not met. The company has an option of improvement on the strategic plan if the
first fails to be met.
Recommendations
From the above report, some recommendation can be drawn. The Huawei Company
should ensure that the tool is implemented fully. Different changes that may occur from the
original company's strategic plans should also be noted. The company must train all the
managers and other staffs to ensure that this managerial tool does not meet any resistance during
the implementation. Business Score Card is a new tool of management; the company should
ensure that its implementation is done step by step to the end. The constant evaluation should be
done by the company. In other words, after the full implementation, the managers must always
compare the received results from the expectation of the company. This will make the managers
understand whether the company grows or is stagnating.
Conclusion
The organizations need to have a link between the performance measurements and the
strategy of the companies. The strategic decisions always occur at different levels of the
management systems. This must always be with the line of the objectives and goals of the
company. The traditional performance measurements system is not suitable to provide the link.
Because it only focusses on the short-term objective of the company. There is lack of the
dynamic changes concerning the company's strategic plan with the traditional system.
Due to the number of benefits the new system has over the traditional methods, the
company should ensure the Business Score Card is fully implemented to improve on its
operation. The Score Card can also help the company to understand the process and flow of its

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strategic plan. Financial and customers preferences of a company can be evaluated using the
Score Card. Managers and staffs evaluation is also achieved by use of the same tool. For this
reason, the Business Score Card plays a very significant role in the management of a company. It
is also simple to implement compared to other management tools. The system has simple models
that both the Time Drive Activity Based Costing (TDABC) and the Activity Based Costing.