1. Building a simple Balanced Scorecard and Stategy Map

A) Build a simple Balanced Scorecard:

Mt Hood Ski Resort was for many years a small, family-owned resort serving day skiers from nearby towns. Mt Hood was recently acquired by Ski Resorts, a major ski resort operator. The new owners have plans to upgrade the resort into a destination resort for vacationers. As part of this plan, the new owners would like to make major improvements in the Cascades Lodge, the resorts on-the-hill cafeteria. The menu at the lodge is very limitedhamburgers, hot dogs, chili, tuna fish sandwiches, pizzas, French fries, and packaged snacks. With little competition, the previous owners of the resort had felt no urgency to upgrade the food service at the lodge. If skiers want lunch on the mountain, the only alternatives are the Cascades Lodge or a brown bag lunch brought from home.

As part of the deal when acquiring Mt Hood, Ski Resorts agreed to retain all of the current employees of the resort. The manager of the lodge, while hardworking and enthusiastic, has very little experience in the restaurant business. The manager is responsible for selecting the menu, finding and training employees, and overseeing daily operations. The kitchen staff prepares food and washes dishes. The dining room staff takes orders, serve as cashiers, and clean the dining room area.

Shortly after taking over Mt Hood, management of Ski Resorts held a day-long meeting with all of the employees of the Cascades Lodge to discuss the future of the ski resort and the new managements plans for the lodge. At the end of this meeting, management and lodge employees created a balanced scorecard for the lodge that would help guide operations for the coming ski season. Almost everyone who participated in the meeting seemed to be enthusiastic about the scorecard and managements plans for the lodge.

Include the following Preformance Measures on the BSC for the Cascades Lodge:

Weekly Cascades Lodge sales

Weekly Cascades Lodge profit

Number of menu items

Dining area cleanliness as rated by a representative from Ski Resorts management

Customer satisfaction with menu choices as measured by customer surveys

Customer satisfaction with service as measured by customer surveys

Average time to take an order

Average time to prepare an order

Percentage of kitchen staff completing basic cooking course at the local community college

Percentage of dining room staff completing basic hospitality course at the local community college

Ski Resorts will pay for the costs of staff attending courses at the local community college.

B) Using the above performance measures, construct a strategy map based on the BSC for the Cascades Lodge. Use arrows to show causal links and indicate with a + or whether the performance measure should increase or decrease.

C) What hypotheses are built into the balanced scorecard for the Cascades Lodge? Which of these hypotheses do you believe are most questionable? Why?

D) How will management know if one of the hypotheses underlying the balanced scorecard is false?