Word limit: 3,000 words.
In order to attempt this task, please use the case study “Integrated Technology Services (UK) Ltd” ITS (UK) from Management and Cost Accounting 7th Edition & 8th Edition by Colin Drury (2008, 2012). A copy of the case study is attached below.
As a consultant, the Group Managing Director of ITS (UK) has invited you in, for a meeting to discuss issues he has with the measurement of the performance of the company. He is concerned about using the low 6% net margin.
Write a memo to the Group Managing Director explaining how financial and non-financial performance measures can be used to improve the business performance. Your report should include:
1. an explanation of how the balanced scorecard could be used as a tool to measure the performance of ITS (UK) taking care to critically evaluate the principles of the balanced scorecard (Approx.1000 words). (40 Marks)
2. create a balanced scorecard for ITS (UK). Include at least two measures in each of the areas of the scorecard and suggest how the information would be obtained (Approx. 500 words). (15 Marks)
3. critically evaluate the addition of another accountant to the team at ITS UK. Make a recommendation to the board whether they should recruit for this role or not. (Approx. 500 words) (15 Marks)
4. a discussion on how target costing could be utilised at ITS UK and a review of how the 20% gross margin is not enough to achieve the 6% net margin required (Approx. 500 words) (15 Marks)
5. a review of the use of the companies’ share scheme and a discussion on whether this scheme motivates the employees to work towards achieving the company goals (Approx. 500 words). (15 Marks) (Total 100 Marks)
CW2 is based on a case study and sometimes you may find that some facts may not be so obvious in case study scenarios. Also remember that you are acting as consultant for ITS(UK) and as such are in position to identify and discuss issues and then make recommendations as required by the question. For example an academic review of a companies` share scheme. Likewise where you make any assumptions outside of the information provided in the case study, it will be a good idea to state such assumptions made.