Management Accounting Case Study: JB Hi-Fi and the Balanced Scorecard

This case study examines the application of the balanced scorecard (BSC) to JB Hi-Fi Ltd, a consumer electronics retailer. The analysis begins with an introduction to the company and the assignment's focus on the BSC's significance. The discussion explores the BSC's role in evaluating performance, enhancing internal business functions, and aligning with strategic goals. It differentiates the BSC from other metrics like SWOT and PESTEL, highlighting its ability to translate long-term goals into short-term actions across financial, customer, internal, and growth perspectives. The case study assesses the BSC's suitability for JB Hi-Fi, referencing its financial performance, customer satisfaction, and operational effectiveness, and how the four key parameters of the BSC can be used to understand and predict the overall performance of the organization. The study concludes that the BSC is a valuable tool for JB Hi-Fi to make informed decisions and adapt to market changes.

Running head: MANAGEMENT ACCOUNTING
MANAGEMENT ACCOUNTING
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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Significance of the balance scorecards..................................................................................2
BSC different from other metrics...........................................................................................4
BSC suitability for jb hifi ltd..................................................................................................6
Conclusion................................................................................................................................10
References................................................................................................................................12

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Introduction
The assignment actually deals with the chosen organization which is jb hifi ltd and
basically the significance of the balance scorecard of the organization and its features. The
report actually concentrates on the application of the balance scorecard on the organization
which is jb hifi ltd. The organization jb hifi ltd is a consumer and entertainment based
electronics chain store which actually provides the access towards the music records and
branded electronics products. In recent years, there is a huge demand in the electronics
industry which is also experiencing a tremendous growth. Due to the rapid enhancements in
the technology where new and latest technologies are appearing each and every moment and
further the electronics store are utilizing the benefits of it by selling the potential products in
the market for the purpose of attracting the customers. The growth is basically based on the
new products which are the smart phones, tablets and laptops in showings a tremendous
growth in this department.
Discussion
Significance of the balance scorecards
Balance scorecard is basically a tool to evaluate the performance metric which is
actually used at the time of the strategic management. The main reason to implement the
balance scorecard is to enhance the internal function of the business along with that
strengthening the internal factors so that that the organization can get the expected outcome
which the organization was actually desiring to get at the end of the year (Hoque 2018). It is
basically used to evaluate the overall financial and other aspects of the organization along
with that providing feedback to the upper management level organization at the same time is
similarly. Along with that the data collection is also a crucial role which is to provide the
qualitative result based on the information gathered by the senior level management and later
on the managers and the executives makes the significant decisions during the process.
The significance of the balance scorecard for the organization are given bellow:

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 The balanced scorecard is used to enhance the management behaviors by the process
separating four different legs which are involved in this case are the learning and
growth, business processes, customers, and finance. Based on the four parameters the
overall situational analysis of the organization is led in order to appreciate the
financial performance of the corporation in various dimensions (Schroeder, Clark and
Cathey 2019).
 It is also used to accomplish certain objectives of the organization along with the
evaluations, initiatives and the goals which are actually the primary objectives which
each and every organization tries to accomplish. This is actually utilized by the
management in order to understand the present act of the business in the end. In case
of the significant loopholes in the business it is further important for the organization
to identify the significant changes which must be adopted by the organization in order
to track the future business scorecard of the corporation (Shoup 2017).
 The balanced scorecard can further provide the necessary information about the
organization after identifying the actual objectives of the organization which may be
of short and long term business purpose. The organization in that case must adopt the
balance scorecard and accordingly the significant strategies will further add value to
the organization. The main purpose of the organization to utilize the balance
scorecard is that to develop the strategic initiatives and the key objectives which must
be adopted by the business at the time of decisions making (Battiston et al. 2016).
Based on the business of the organization which is jb hifi ltd it will be better to go for the
balance scorecard rather than the traditional performance measurement which are the six
sigma black belt or the total quality management of the organization. The balance scorecard
of the organization actually provides a clear understanding regarding the strategy, which is

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owned by the organization, or the best possible strategy which was needed to be undertaken
by the organization.
BSC different from other metrics
Balance scorecard is actually different from the other performance metrics which are
the SWOT, PESTEL and many more. With the help of the balance scorecard a organization
can convert the long term goals into the short term goals of the firm. The reason behind the
balance scorecard, which is actually different from the other performance metrics as it
enables the organizations to clarify vision and strategy which are further associated with the
actions associated with it. The format of the balance scorecard actually provides the
comprehensive and an effective approach in order to evaluate the success which is quite
necessary for the internal business process along with the external outccomes which are
associated with the business of jb hifi ltd in order to enhance the results and performances
accordingly. Apart from the six-sigma model, it is actually important for the organization to
deploy the balance scorecard based on the strategic planning process which actually creates a
positive impact in running the business of the organization (Gitman, Juchau and Flanagan
2015). The parameters, which are actually considered in this case, are considered as much
more effective and defined in comparison to the other performance metric strategic
management strategy of the organization.
The perspective of the balance scorecard is basically dependent on the four major
perspective which are the financial, customers, internal and growth perspectives. The
financial perspective of the organization actually includes the shareholders of the
organization which actually plays a major role in case of the overall financial growth of the
firm (Gray, Adams and Owen 2017). At the same time, it is also important for the
organization to understand the constant fluctuation in the demand of the customers. The
organization needs to identify such changes in the system along with the potential drawbacks

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or glitches which are further associated in that case. The other perspective is the internal
perspective of the organization which actually deals with the internal managements system
actually involving the operations and the management department of the organization. If the
communication channel within the internal management system of the organization is
effective then the organization will be able to flourish or rather enhance the potential business
growth in the end perspective of the business. The last growth perspective is basically related
to the innovations and the learning center which must be effective. If the research and
development team of the chosen organization, which is here jb hifi ltd, is strong and effective
then the organization will be provide the updated products readily available and automatically
will boost the production of the organization at the same time.
The other performance metric does not actually provide the clear picture regarding the
performance of the management system of the corporation. The decisions, which is taken by
the management, actually creates significant impact in the operation of the business in the
long run (Dye 2017). The other parameters of the organization are the various departments in
the operation level which are basically the finance, human resource, marketing and systems
of the organization. In case of jb hifi ltd it is actually needed by the organization to
concentrate on the marketing and the advertising sector along with the financial sector of the
business. This two department in the organization actually plays the crucial role in enhancing
the business prospects based on the objective of the organization in the long run.
The business of the organization actually looks for the typical aspects, which is the
fluctuation in the financial departments or rather, the marketing department of the
organization. The key responsibility in the management system of the organization to take
care such kind of manipulation and further taking the significant steps in order to optimize
the whole business process. Based on the balance scorecard metrics the organization will be
able to identify the variation in the system and will further be able to take the most important

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decisions in the process. If the performance of the business is satisfactory or good the
organization will be able to attract the potential shareholders and stakeholders of the
organization. If the stakeholders of the organization generates interest within the business
then the financial performance of the organization on the other hand will definitely increase
based on a significant margin (Fisher 2018). The organization will also get access towards the
various projects from the stakeholders and if the organization is able to implement the
investment process in an effective manner then it will automatically be fruitful for the
organization in the long run of the business.
The significant business decision of the business actually rest upon the senior level
management of the organization and any required changes in the business are further adopted
by the board of directors in the senior level management of the organization. This the actual
reason behind the implementation of the balance score card ,within the business so that the
organization can prosper in the future buy making the correct decision or rather the
significant changes base on the current business prospects of the organization.

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BSC suitability for jb hifi ltd
Based on the four key parameters it will be useful for the business to understand the
performance and also to prediction the overall presentation of the organization in the long run
of the business (Schaltegger and Burritt 2017). The business of jb hifi ltd must be evaluated
based on the four parameters which are actually there in the balance scorecards which are the
financial, learning and growth, customers and the internal business process of the
organization.
From the strategic performance report of jb hifi ltd it can be said that the organization
faced a tremendous growth in the sales of about 29.2% during the year 2006. Certainly there
were also an increase in the performance of the organization which is the NPAT, earning per
share, return on the invested capital of about 39.1%, 38.1% and 5.1% respectively. As there is
growth in the return of the organization then there is also a significant growth in the dividend
which is actually provided by the organization in the long run of about 38.9% accordingly
(Kaplan and Atkinson 2015). The fiannacial performance of the organization is evaluated as

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it falls under the financial metrics of the organization which further includes that the gross
margin of the organization is further adjustable based on the impact of the games and
computers.
In the segment of the learning and growth of the organization then significant
enhancement in the performance of the organization is based on the growth on the stores
which is actually about 7.7%. On the other hand the research and development of jb hifi
limited had also reflected a significant business results like in the Christmas the DVD, games
and portable audio was sold which actually indicates growth in the gaming retail department
of the organization. Due to the effectiveness in the research and development team of the
organization, it became quite easy for the organization to boost the sale of games and other
electronic products in order to enhance the business profitability of the organization
(Boučková 2015).
The other key parameter in this case is customers satisfaction where if the customers
are happy with the product then they will definitely consume the products. The electronics
and the gaming products, which are actually sold, are further properly managed by the
inventory management team which is actually quite necessary for the business (Bromwich
and Scapens 2016). As the sales revenue of the organization is increasing gradually which
signifies that the overall performance of the organization in terms of the satisfaction of the
customers are increasing. This means that most of the customers in this case are quite
satisfied with the electronics and the gaming products of the business in the long run.
The last parameter in this case is the internal business processes are the cross sell
products which further includes enhancing the efficiency along with minimizing the problem
at the same time. It also helps the organization to take the quick decision and further helps the
manage system of the organization to reach to an output. If there lies proper, work culture

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within the organization which further enhances the motivation of the employees who are
actually working within the organization (Booth 2018). If the communication process within
the business of an organization is effective then the entire working process of the
organization will be smooth along with the productivity of the organization on the other hand
will also increase at the same time.
The environmental and the social factors in that case plays a significant role for the jb
hifi ltd, which actually matters, to the shareholders, suppliers and customers of the
organization. The board of directors of the Jb hifi ltd actually takes care of the rules and
regulations of the corporate governance and the impact regarding the same. The board of the
directors must evaluate the presentation of the business in an important and rather detailed
way so that the possible glitches within the organization, which is jb hifi ltd, can be obtained.
This is further the main reason behind the reviewing the corporate governance of the
organization and further it is needed to understand the current business prospects of the
organization at the same time. The appointment of the board of directors must ensure that the
members of the board provides an appropriate range of experience, skills, knowledge,
diversity and perspective in order to carry out the commercial of the organization smoothly
and effectively which actually includes the other responsibilities as well at the same time.
There must be independence at the time of making the significant decisions in the
business by the upper level management of the organization (Duska, Duska and Kury 2018).
The decisions based on the internal management system of the organization actually creates a
lot of impact in the business proposition along with the significant aspects of the business
including the overall objectives which each and every organization tries to accomplish at the
same time. The board of the organization also includes the skills, background, experience and
gender which is actually kept in record within the organization of the business.

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If the conflict takes place within the organization then it is the accountability of the
senior level management of the organization to deal with such kind of conflict within the
internal management system. It further falls under the accountability of the organization to
make sure that the business of the organization is actually a successful concern concept of
accounting. The directors of the organization manage any kind of possible changes in the
business by taking the most significant decisions in order to manage the personal interest of
material.
It will quite be exact for the business to adopt the performance metrics in that case
which is the balance scorecard system. Compared to the other approaches which are the
SWOT, PESTLE, it is further important for the organization to adopt the significant changes
in the system by utilizing the balance scorecard of the organization (Dosi et al. 2016). The
four significant parameters of the balance scorecard actually provides the exact same way
each and every organization must follow. The overall performance within the organization
can be identified with the method of having a close understanding regarding the four
parameters which is actually considered while conducting the business. The performance
metric which is balance scorecard in this case actually provides a clear picture regarding the
key business fundamentals along with the other aspects of the organization.
This is considered as the part of the strategic management theory which each and
every business within the organization actually takes care of the potential changes which may
take place in the future. There are certain risk associated within the organization which is the
jb hifi ltd and accordingly the changes must be adopted by the management which are the
economic, environmental and social sustainability risks of the business. While taking the
significant decision within the business of the organization it is actually needed by the
organization to considered the threat associated with such kind of risk in the business. After
evaluating the performance metrics of the organization it is further needed by the firm to take

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interpret the results associated and then make the needed changes at the time of decision
making. Another significant aspects of the jb hifi ltd is that to encourage the employees in the
working place at a comparative lower cost associated with the business. The business in that
case is highly efficient in generating funds, which are actually needed for the charitable
sectors in that case.
The organization, which is here jb hifi ltd further, implements some of the significant
strategies in order to make the workplace of the organization much more effective. Rewards
and recognitions in that case plays the significant role in motivating the employees and
further helps the business of the organization to prosper accordingly. The employees of the
organization must take the aspects of the business of the organization into consideration and
the firm must appropriately recognize further techniques.
Conclusion
From the above discussion, it can be concluded that the chosen organization which is
the jb hifi ltd needs to adopt the performance metric approach which is the balance scorecard
system. This system will help the organization to get a clear understanding regarding the
performance of the organization along with the potential manipulation which is needed to
adopted by the business. The positive and negative aspects of the balance scorecard within
the system of the organization have been significantly depicted in the above discussion.
Above all the decisions taken by the senior level management of the organization must be
taken into consideration and further significant the impact, which may be positive or
negative, must be evaluated at the same time.