CA Final · Integrated Business Solutions (Multidisciplinary Case Study with Strategic Management) · Strategic Cost & Performance Management

Case: Meghdoot Retail Ltd runs a store chain. Last year a Balanced Scorecard showed: customer satisfaction index rose from 70 to 85, while sales per square foot fell 8%, and employee attrition rose from 10% to 22%. Management believes attrition of trained staff is causing inconsistent service that will eventually hurt revenue. Which interpretation best reflects the cause-and-effect logic of the Balanced Scorecard?

High attrition is a Learning and Growth leading indicator that can later damage service, customers and finances. The scorecard's cause-and-effect chain means management should address staff retention now, rather than rely only on current satisfaction scores or lagging financial results.

1. ALearning and Growth weakness (attrition) is a leading indicator that may later erode customer and financial outcomes, so corrective action should target staff retentionCorrect
2. BFinancial perspective is the only reliable indicator, so the attrition data can be ignored
3. CRising customer satisfaction proves the strategy is working, so no action is needed
4. DAttrition is a lagging financial measure that should be corrected by cutting prices