ACCA Applied Knowledge · Management Accounting · Performance measurement - application
A company uses the balanced scorecard. It measures 'percentage of customers who rate delivery as on time' and 'customer retention rate'. Which perspective of Kaplan and Norton's balanced scorecard do these measures belong to?
The measures belong to the customer perspective. On-time delivery ratings and customer retention show how customers see the organisation and how well it satisfies them. The financial perspective covers profitability, and the internal process perspective covers operational efficiency such as defect rates.
- AFinancial perspective
- BCustomer perspectiveCorrect
- CInternal business process perspective
- DInnovation and learning perspective
Explanation
Both measures show how customers view the business, so they sit in the customer perspective. Financial measures would be profit or return on capital employed. Internal process measures would cover things like defect rates or cycle times.
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