Mini Case Study: Balanced Scorecards to guide strategy during a time of crisis (5 marks)
“The retail sector needs to be prepared for the two ecommerce waves that are coming so their businesses can survive the coronavirus challenges and be ready for revival on the other side.”
(KPMG, 2020)
This direct quote serves as a stark reminder that store-based retailers in Australia, as elsewhere, are in fight for their survival. KPMG reports that although online retail penetration in Australia is behind other parts of the world, most categories of retail will experience a sharp acceleration of online sales as a result of COVID-19. They expect a sharp increase in online ‘specials’ offered by retailers to clear inventory surpluses.
As a result of the COVID-19 pandemic, retail managers are confronted by a dual demand to grow their online retail offerings, whilst reducing the costs associated with unprofitable stores. The change in strategy is critical and urgent (Badenhorst, 2020). The change in strategic direction with resulting cost saving measures impacts greatly on employment and the wellbeing of communities store-based retailers operate from. It is an open question if retailers have a social obligation to save jobs and/or protect the wellbeing of communities when they close stores.
Balanced Scorecards are used to develop, measure, and communicate financial, social, and environmental organisational strategies (Horngren et al., 2017, pp. 683 – 688). The balanced scorecard considers both financial and non-financial measures, can relate those measures to time, and show how these measures inter-relate. It plays a vital role in evaluating performance. Managers can use the measures across the four perspectives of the balanced scorecard to modify plans and decisions, thus achieving organisational goals (Horngren, 2017, p. 731). However, criticism has been levied at scorecards as not being the most suitable management tool in a time of crises.
You are required:
In your established teams, research an Australian retailer currently experiencing the crisis described in the case study.
1. From reputable media sources, identify and evaluate the strategic actions your Australian retailer has proposed to respond to the crises. Prepare a one (1) page balanced scored card for your selected retailer, including measurable targets relating to the strategic actions identified in above. Follow the suggestions to develop an effective scorecard, and format, from Horngren et al. (2017), i.e. 4 dimensions and 2 measures per dimension. Include at least one (1) measure relating to a social obligation. Reference your source(s)
2. In a brief note (not exceeding 150 words) to the scorecard, with an appropriate reference(s) relating to your chosen retailer, address criticism commonly levied against the use of the balanced scorecards.
5. Provide a statement of contribution of the group members who have contributed and the role they played. Reflect on the effectiveness of the team effort. The statement of contribution and reflection should not exceed 250 words.
Submit one (1) word or PDF document for your team to the MyLO dropbox provided for this mini case by the due date. Turnitin will be run and normal COBE directives regarding submission penalties and plagiarism apply. You do not require extensive referencing as this is a mini case with very limited writing required. References will be excluded from the word count. Grading is done against the rubric.
References:
Horngren, C., Datar, S., Rajan, M., Maguire, W., Tan, R. (2017). Horngren's Cost Accounting: A Managerial Emphasis eBook, 3rd Edition. [[VitalSource Bookshelf version]].
Badenhorst, M. (2020). Retrieved form:
https://www.linkedin.com/pulse/covid-19-impact-assessment-using-balanced-scorecard-badenhorst?articleId=6657928808412270592
KPMG. (2020). Retrieved from
https://home.kpmg/au/en/home/insights/2020/04/coronavirus-covid-19-retail-survival-and-revival.html