Answer to Question #155838 in Economics for Tahir Noman

Question

The Managing Director of Hawkins College Ltd wants to start using the Balanced Scorecard and has asked that a range of performance measures should be collected for presentation in the format outlined by Kaplan and Norton.

The following data has been collected:

2019 2020

Sales revenue £000 2000 2650

Profit £000 140 131

Capital employed £000 2400 1950

Student numbers 1480 1495

Average class size 28 32

Average pass rate:

Hawkings College Ltd 60% 57%

National 56% 56%

New courses introduced 3 6

Number of student complaints 40 53

Square metres for tuitions 1600 1600

Occupancy of tuition rooms 80% 78%

Staff turnover (leavers/average staff) 0.13 0.19

I.T. development as a % of revenue 1.6% 1.8%

The directors have also obtained the following key performance indicators for 2020:

Growth in sales revenue of 8% per annum.

Pass rates of 4% above the national average for the externally assessed examinations.

A return on investment of 9% for the organisation as a whole.

Investment in information technology development of 2% of sales revenue to remain ‘state of the art’.

6% increase in student numbers.

Reduction in number of student complaints.

4% reduction in average class size.

YOU ARE REQUIRED TO:

1) Define the balanced scorecard and explain the four perspectives advocated by Kaplan and Norton. (6 marks)

2) Using the performance data collected, calculate three suitable performance measures for 2019 and 2020 for each of the four perspectives of the balanced scorecard.

(12 marks)

3) Based on your calculations in 2 above discuss the performance measures achieved against the original performance targets. (7 marks)

Answer 1

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