Syed Ali, an Accountant, Was Recently Hired by LOGAN INDUSTRIES

Essay

Syed Ali, an accountant, was recently hired by LOGAN INDUSTRIES, Inc. As part of his first task,
Feingold was asked to develop a balanced scorecard for the company. He developed the following
measures:
On-time deliveries
Customer retention
Customer profitability
Product innovation
Market share
Return on assets
Number of defectives
Employee satisfaction
Employee training
Ali knows that some of these indicators are what are called leading indicators and others are lagging indicators. However, he does not know enough and has approached you to help him.
Required
(a) Re-arrange the above indicators to reflect whether they are lead or lag indicators. Also identify the cause-effect relationships that may exist.
(b) Why is it important for managers to differentiate between leading and lagging indicators?
(c) Classify the above indicators under the different perspectives of the balanced scorecard.
(d) How many measures under each perspective of the balanced scorecard should a company use? Why?
(e) Briefly discuss the major benefits of the balanced scorecard.
(f) Identify and briefly discuss three types of costs associated with the balanced scorecard.