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Balance Scorecard

Balance Scorecard

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An essay for the 2011 Undergraduate Awards (Ireland) Competition by Greg Corbett. Originally submitted for LC241 - Business in Accounting & Finance at Limerick Institute of Technology, with lecturer Michael Sheehan in the category of Business
An essay for the 2011 Undergraduate Awards (Ireland) Competition by Greg Corbett. Originally submitted for LC241 - Business in Accounting & Finance at Limerick Institute of Technology, with lecturer Michael Sheehan in the category of Business

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Published by: Undergraduate Awards on Aug 31, 2012
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07/24/2014

 
 Management AccountingAnd Operations ResearchAssignment
The Balance Scorecard 
Aer Lingus PLC
 
Table of Contents
1.
 
Introduction2.
 
Financial Perspective3.
 
Financial Perspective4.
 
Customer Perspective5.
 
Customer Perspective6.
 
Learning and Growth Perspective7.
 
Learning and Growth Perspective8.
 
Internal Process Perspective9.
 
Internal Process Perspective10.
 
Conclusion11.
 
Reference List
 –
Journals12.
 
Reference List
 –
Journals13.
 
Reference List
 –
Websites14.
 
Reference List
 –
Newspaper Articles15.
 
Appendix
 –
(1) Aer Lingus16.
 
Appendix
 –
(2) British Airways17.
 
Appendix
 –
Published Acc
 –
Aer Lingus18.
 
Appendix
 –
Published Acc
 –
British Airways
 
Introduction
The concept of the Balance Scorecard (BSC) was first established by Robert S. Kaplan and David P.
Norton, who believed it to be “ a
powerful and balanced strategic management system thatfacilitates the implementation of strategy, using measures to ensure that corporate vision and
strategy are implemented and achieved”
(Kaplan and Norton, 1996b, pp. 75-85). According to Kaplanand Norton, the scorecard answers four basic questions:1.
 
How does the company look to Shareholders? Analysing the financial perspective.2.
 
How do customers see the company? Therefore considering the customer perspective.3.
 
What must the company excel at? Reviewing the internal perspective.4.
 
Can the company continue to improve and create value? Evaluating the learning and growthperspective. (Chia, A., Goh, M., Hum, S., 2009, pp. 605-620)Highlighting the fact that financial measures are but one perspective. The BSC model of businessreporting has been analysed by Guthrie J., Boedker C. where they found that the motivation, use of theory and values of an organisation must be researched prior to implementation of the BSC toensure compatibility (Gutherie, J., Boedker C., 2006, ). The bundling of these perspectives into a BSCis an issue dealt with by Modell S. who examined how the bundling of design characteristics effectedthe implementation of the BSC (Modell, S., 2009). A valid question raised by Brander Brown J. AndMc Donnell B. was whether the BSC will be a short or long term system. This is an issue whichwarrants consideration as the BSC is a costly process to implement, especially if it is only for a shortperiod of use (Brander Brown, J., Mc Donnell, B., 2005).The company BSC which I have chosen to scrutinise is Aer Lingus. Aer Lingus were established by theIrish Government in April 1936 with the vision of providing air services to and from Ireland. On the2nd of October 2006, Aer Lingus became a Public Limited Company (PLC) and began being quoted onthe Irish and London Stock Exchanges (www.aerlingus.com). Aer Lingus is listed on the Irish andLondon Stock Exchange
with a current share price of €0.58 as at 11
/3/2010, which is an absolutechange of -
0.19 and a relative change of -24.44% when compared to 12 months previous (DigitalLook, 2010). Aer Lingus PLC has been portrayed by their Chairman Colm Barrington as
a leadinglow-cost, low-fares Irish airline primarily providing passenger transportatio
n services”. Aer Lingus
issaid to operate a single economy class service on its short-haul network, incorporating services fromDublin, Cork, Shannon, Belfast and Gatwick to destinations in the United Kingdom and ContinentalEurope (www.aerlingus.com). The fleet operated by Aer Lingus includes six A320, twenty-sevenA321 and fourteen A330 aircraft (www.aerlingus.com). Aer Lingus PLC is owned by two majorshareholders, Ryanair Holdings PLC (28.1%) and the Irish Government (25.1%). The remaining sharesare split between ESOT, the Employee Share Ownership Trust (14.2%) and private individualinvestors (30.8%).

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