Strategic Management Accounting: Philips' Balanced Scorecard Analysis

This report provides an analysis of Philips' strategic management accounting through the lens of the balanced scorecard. It outlines the long-term goals of Philips, defines its stakeholders, and chooses suitable perspectives for a balanced scorecard, including financial, customer, internal process, an...Read More

Strategic Management Accounting

Introduction
The strategic management accounting helps in managing the data and accounts of the
organisation. The accounting management including the various strategies for the concern of
effective working in an organisation and data management is necessary. The assessment of
the Philips on the balanced scorecard is provided under the below report.

1. Outline the long-term goals of the Philips and define the groups of stakeholders or
clients for Philips.
The long-term goals or objectives of Philips are to provide effective running of the business
within the customer satisfaction. The goals which help in providing the effective business
operations and its success are considered long-term goals. There are various long-term goals
of Philips which are-
Revenue goals
Customer service goals
Sustainability improvement
Creating value for stakeholders
The company is a large operating organisation which includes various stakeholders in an
organisation. These stakeholders are disseminated in the internal and external category. Some
internal stakeholders of Philips are-
Employees
Managers
Owners
Some of the external stakeholders of the company are-
Customers
Suppliers
Government
Shareholders

2. Choose suitable perspectives that could be used as part of a balanced scorecard and
develop specific objectives for each perspective.
Philips has the major perspective of including innovation in its products to make the customer
attracted towards the products of the company. The perspectives which could be considered
or added in balanced scorecard are-
Financial- The objective is to achieve the financial goals.
Customer- The objective is to meet customer expectations and provide customer satisfaction.
Internal process- the objective is to improve the critical internal process.
Innovation- The objective is to the innovation of the products with the concern of sustainable
development.

3. Develop a strategy map to show the relationships between the different objectives.
Figure-1
Source- (Valmohammadi and Sofiyabadi, 2015)

4. Indicate KPI’s and KPD’s (lead and lag indicators)

5. Based on the academic/professional literature, provide a critical analysis of the
issues concerning the implementation of the balanced scorecard.
According to the Awadallah and Allam, (2015), the balanced scorecard creates issues on its
implementation. The balanced scorecard creates a challenge for an organisation by imposing
vague strategy for an organisation. It also creates a problem because common vocabulary is
not present in the balanced scorecard which ensures the problem generation in understanding
it.
On the other hand, Keyes (2016), determined that balanced scorecard generates the problem
in initial implementation as it is a complicated stage. The balanced scorecard
implementations also generate an issue in losing the mechanics of tracking.
After considering the above both critical aspects of implementation issue of balanced
scorecard it is clear that all the issues generally occur during its implementation and these are
necessary to be considered.

Conclusion
The report helps us in concluding that Philips needs an improvement in its balanced
scorecard. A revised balanced scorecard would help the company in getting the reach of its
target. The company has a great performance but the milestones need to be improved and
updated.

References
 Awadallah, E.A. and Allam, A., 2015. A critique of the balanced scorecard as a
performance measurement tool. International Journal of Business and Social
Science, 6(7), pp.91-99.
 Keyes, J., 2016. Implementing the IT balanced scorecard: Aligning IT with corporate
strategy. CRC Press.
 Valmohammadi, C. and Sofiyabadi, J., 2015. Modeling cause and effect relationships
of strategy map using fuzzy DEMATEL and fourth generation of balanced
scorecard. Benchmarking: An International Journal, 22(6), pp.1175-1191.