(SOLVED) Clean Living Ltd is a travel companies that specialises in


Question Description:

$20

Clean Living Ltd is a travel companies that specialises in ‘green’ tours-package tours to environmentally sensitive destinations. These types of tours are growing in popularity, and while Clean Living has had little problem attracting customers it has noticed that a number of competing businesses have just commenced operations. Even some of the regular travel companies are starting to offer green tours.
Last year, the managing director asked the financial controller to design and implement a new performance measurement system that may help to protect the business against competitors. To provide the foundation for the new performance measurement system, all of the company’s managers participated in a strategic planning retreat. The managers used the Kaplan and Norton approach to outline a set of objectives to support the four perspectives of a balanced scorecard and then developed objectives for each perspective.
Clean Living’s objectives, based on the structure of its balanced scorecard, were as follows:
Perspectives Objectives
Financial……………………………Increase, profit
……………………………………..Improve cash flow
Customer…………………………..Increase market share
Improve customer satisfaction……..Internal business processes Improve office cost effectiveness
……………………………………..Develop innovative tours
Learning and growth………………Improve environmental knowledge of employees
Clean Living has recently been taken over by Invertors Pty Ltd. which is a market leader in the provision of environmentally focused tours. The CEO of Invertors, Barry Forest, is intrigued by the balanced scorecard that has been used by Clean Living-he has never come across this idea before. However, he is concerned that the focus of the scorecard promotes the company’s financial performance, and pays only token attention to the company’s environmental and social performance, and to its impact on the broader economy. Invertors focuses on sustainability, which is an important part of its mission. Forest believes that his company should ‘walk the talk’ in all aspects of its operations, not just in the products that it provides.
Required:
1. Consider the structure of the balanced scorecard that has been used by Clean Living, and explain to Forest how it may be modified to take into account his concerns.
2. Be creative-use your imagination to add a sustainability flavour to the balanced scorecard. Identify the dimensions. objectives and some possible lead and lag indicators. State clearly any assumptions that you need to make.
3. Under what Circumstances would you recommend that an additional perspective be added to the scorecard to capture sustainability aspects of performance?

Answer

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