CHAPTER 13
The Balanced Scorecard: Strategic-Based Control
COLLABORATIVE LEARNING EXERCISE SOLUTION
1. Financial responsibility accounting focuses on organizational units such as departments,
emphasizes local efficiency, holds heads of organizational units responsible for the unit’s
performance, and uses financial measures of performance. Strategic responsibility ac-
counting ties the objectives and mea-sures to strategy and emphasizes systemwide effi-
ciency; responsibility for performance tends to be centered in teams instead of individu-
als. Another key difference for the strategic-based approach is the fact that it focuses on
more than the financial perspective. Customer, process, and learning and growth perspec-
tives are all carefully considered.
2. Performance measures for a financial-based system are financial, are objective, and tend
to be results oriented (lag measures). In a strategic-based system, both lead and lag
3. Performance evaluation for a financial-based system compares the actual outcomes with
the expected financial outcomes. Any unfavorable differences are viewed as being a
problem of managerial effectiveness in implementing the plan—either by failure to fol-
low the plan or inefficiency on the part of the manager. For a strategic-based system, the
strategy is expressed as a series of hypotheses in the form of if-then statements. Targets
4. The reward system for a financial-based system is tied almost strictly to
financial outcomes and focuses on an individual’s performance. For a
5. Student groups will report the results of their analyses for Requirements 1–4 to the class.