Management Accounting Report: Amazon Balanced Scorecard Analysis

This report provides a comprehensive management accounting analysis of Amazon, focusing on its balanced scorecard. It evaluates the company's performance across financial, customer, internal business process, and learning and growth perspectives. The report identifies gaps in the current balanced scorecard, such as discrepancies between targeted and actual share prices, customer revisit rates, and customer ratings. It then recommends changes, including sourcing funds from external sources, increasing customer commitment, improving product quality, and ensuring timely order processing. The implementation plan includes financial resource considerations and a 12-month timeline. The report concludes with a summary of the findings and recommendations, emphasizing the need for strategic adjustments to enhance Amazon's performance.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of Student:
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Author’s Note:

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Table of Contents
Introduction......................................................................................................................................2
Report Overview..............................................................................................................................2
Evaluation of Current Balanced Scorecard......................................................................................2
Recommended Changes and Benefits.............................................................................................4
Implementation Plan and Considerations........................................................................................6
Implementation Plan and Considerations........................................................................................7
Conclusion.......................................................................................................................................7

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Introduction
As discussed by Stuenkel (2018), “Amazon.com, Inc”, is identified as an American e-
commerce and a cloud computing organisation founded by Jeff Bezos is headquartered in
Seattle, Washington, U.S. Some of the key products of the company has been depicted in form of
electronics, movies, music, games, home garden and office category. The company has been able
to prove itself as one of the largest internet retailer which is able to provide when measured in
terms of the market capitalization and total revenues. It has been further observed that the
company was seen to be launched in the late 2017. It has been seen that at present Amazon
Australia there these is no balanced score card of the company (Kristensen et al. 2017).
Report Overview
Some of the main discussions included in the report will be able to highlight on the areas
which are seen to be related to the evaluation of the current balance sheet as per the financial
perspectives, customer perspectives, internal business process perspectives, learning and growth
objectives. The report will further recommend the changes and benefits, proceeding with the
implementation and putting forward the necessary considerations in the reporting elements
(Kousha and Thelwall 2016).
Evaluation of Current Balanced Scorecard
Strategic Objectives Performance Measures Evaluation of Measures
Financial Perspective
The evaluation of the present
balanced scorecard has
revealed that present
strategies for the financial
perspectives has been taken
into consideration as per:
Maximization of the
shareholders wealth
 Increasing the operating
The main interpretations have
able to depict that the
company followed important
measures for:
 Increasing the share price
Achieve higher profit
margin
 Lowering of the various
type of the initiatives taken
There have been significant
gaps in the financial
perspectives. Some of the
main form of the gaps which
has been depicted in form of:
The decreasing the target and
actual share price. The
targeted share price was
depicted to be $ 460 million
while the actual increase in

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profit
 Following the
competitive pricing
policy
for the publishing cost the share price was only $
307.28 (Sun et al. 2016)
Customer Perspective
Strategic target for the
customer has been set with:
 Fast delivery
 Brand loyalty
 User responsive website
The measures in this aspect
is seen with:
 Establishing more number
of distribution centres
 Improving Customer
revisits,
 Increasing the customer
ratings and making
investment for the site
maintenance
In this aspect the target of the
company was set with the
various types of the
consideration which shows
that the target for establishing
more distribution centres was
3 days, while in actual it was
depicted as 5 days. The
customer revisits target was
set as 38%, however the
actual was only 28.5%. in
addition to this, the target of
the customer rating got
reduced from 4.9 to 4.2. The
target set for the site
maintenance got reduced
from 200m to 154m. The
reduction in this aspect
clearly shows that the
company has failed to
maintain the required
investment in improving the
customer services (Schuldt et
al. 2017).
Internal Business Process
Perspective
Some of the various types of
The main measures to ensure
this is seen with:
 Reducing the process
It is seen that the actual target
for reducing the processing
time was 2 hours and the

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the internal business process
strategies for the company
has been further seen to be
depicted in form of:
 Speed of processing the
orders
 Securing online data
processing
time
 Reduction of the
customer complaints
actual achieved processing
time was increase. In addition
to this, Amazon aimed at
reducing the customer
complaints to 0%, however
there was 5% of customer
complaint record as per the
depictions of the present
balance sheet (Amazon
2015).
Learning and Growth
The various types of the other
implications on the learning
and growth strategies has
been set with:
 Inclusion of highly skilled
staff
 Ensuring innovation in the
organization
The performance measures
for the learning and growth
aspects were considered as:
 Training and employing of
high expertise staff
 Overall improvement in
the Research and
development area
Based on the different types
of the depiction of the study it
has been that the targeted for
the training and employee
was set with 108m however
this was seen with 79 m in the
actual results. In addition to
this, there was significant gap
on the research part by the
company as per the target set
and the actual achieved
results (Zhu and Liu 2016).
Table 1: Evaluation of Current Amazon Balanced Scorecard
(Source: As done by the author)

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Recommended Changes and Benefits
The recommendations to the changes in the are stated with the various types of the new
performance measures which needs to be set in the respective financial, customer, internal
business process and learning and growth aspects.
Objectives and lag and lead indicators in a balanced scorecard
Objectives Lead Indicators
Financial
 Sourcing of the funds from the external
sources to maintain appropriate funding
 Maximizing the shareholder return to
support the operating losses
 Engaging in different types of the financial
sourcing options such as long-term
borrowing to fill the lag in share price
 Looking forward to strategic acquisitions
and making the most of it
 Taking into consideration the increasing
nature of the tax rate in Australia
 Taking into consideration the increasing in
the fuel price per barrel thereby affect the
delivery charges (Smith and Linden 2017)
Customer
 Increasing the overall customer commitment
towards the customers
 Creating value for the existing customers by
understanding their problems
 Hold a regionally significant position in
Australia with improved customer service
and better access to the global store
 Conducting regular survey to know about
the customer grievances
 Using the system of net promoter score for
measuring the customer advocacy
 Increasing the share of funds towards
existing facility in Australia
 Improving the number of customer revisits
 Improving the Customer Ratings
 Reducing cost in maintenance
Internal Business Process
 Improving the quality of the products in all
 Improved quality audit of the products
before the final dispatch

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categories
 Ensuring timely processing of the orders
 Reducing the processing time by increasing
the procurement from few supplier
 Prevent the delay in the present processing
by 1 hour
 Consider the increased nature of the
customer complaints associated to the
quality of the products offered and services
and reduce the same (Newcombe et al.
2015)
Learning and Growth
 To be a leader as an online retailer and
sustain the increased market capital
 Ensuring the process innovation through
employing of highly skilled staff
 Focusing on strategy of cost leadership to
ensure maximum sales of the products
 Reducing cost of innovation
 Considering the Cost constraints associated
to training of the high expertise staff
Implementation Plan and Considerations
Performance Measures How measure links to improved financial
performance
Sourcing of the funds from the external sources
to maintain appropriate funding
This measure is directly related to increasing
the present funds available for the operations of
the company
Maximizing the shareholder return to support
the operating losses
Increased shareholder return will be able to
compensate for the losses in the operations
Increasing the overall customer commitment
towards the customers
Increase in the customer commitments will
ensure more revenues for the company
Creating value for the existing customers by
understanding their problems
This will create loyalty among the customer and
regain their interest in the company which
further result in increased sales for Amazon
Improving the quality of the products in all Gaining in terms of the marketing competition
from the off-line. This is conducive to the

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categories increase the decreasing operating profit
Ensuring timely processing of the orders The company will be able to retain the trust of
both cucumbers and sellers and at the same time
will be able to ensure increased revenues
Ensuring the process innovation through
employing of highly skilled staff
Reducing the overall process and ensuring more
number can be dispatched at time. This will be
considerably able to increase the total number
of the orders which are processed in single day
Implementation Plan and Considerations
The implementation plan needs to be considered with the availability of the financial
resources to implement the recommended balanced score card. The time consideration needs to
be also considered in this aspect. The total time needed to implement the plan has been seen to
be depicted as 12 months. It needs to be further discerned that the overall process will comprise
of the various types of the important considerations which are seen to be related to the
availability of the Human resources (Stuenkel 2018).
Conclusion
The various types of the discussions on the evaluation of current balanced scorecard has
shown that There have been significant gaps in the financial perspectives. Some of the main form
of the gaps which has been depicted in form of the decreasing the target and actual share price.
The customer revisits target was set as 38%, however the actual was only 28.5%. in addition to
this, the target of the customer rating got reduced from 4.9 to 4.2. Some of the recommended
action plan for the company has been included with Engaging in different types of the financial
sourcing options such as long-term borrowing to fill the lag in share price and Looking forward
to strategic acquisitions.