Target Performance Performance Actual Objectives Measures Financial Perspective Increase shareholder value Operating-income changes from productivity Operating-income changes from price recovery Operating-income changes from growth Cost savings due to reduction in jet fuel consumption $7,200,000 $8,400,000 $2,700,000 $3,600,000 $3,000,000 $3,960,000 $900,000 $1,080,000 Customer Perspective 2nd in 1st in industry Increase the number of on-time FAA on-time arrival ranking arrivals industry Improve brand image Percentage of customer survey respondents with greater than 90% approval rating on com- pany's sustainability efforts 100% 96% Internal-Business-Process Perspective On-ground time Number of engineering changes that decreased CO, emissions Reduce turnaround time <25 minutes 30 minutes Reduce CO2 emissions 10 Learning-and-Growth Perspective Align ground crews 70% % of ground crew stockholders Achieve ISO 50001 certification in energy management 68% Acquire new energy management tool and technology Acquire certification by Dec. 31 Acquired certification by Dec. 31 1. What is WrightAir's strategy? Was WrightAir successful in implementing its strategy in 2017? Explain your answer. 2. Draw a strategy map as in Exhibit 12-2 for WrightAir describing the cause-and-effect relationships among the strategic objectives described in the balanced scorecard. Identify what you believe are any (a) strong ties, (b) focal points, (c) trigger points, and (d) distinctive objectives. Comment on your structural analysis of the strategy map. 3. Based on the strategy identified in requirement 1 above, what role does the price-recovery component play in explaining the success of WrightAir? 4. Would you have included customer-service measures in the customer perspective? Why or why not? Explain briefly. 5. Would you have included some measure of employee satisfaction and employee training in the learning-and-growth perspective? Would you consider this objective critical to WrightAir for imple- menting its strategy? Why or why not? Explain briefly. 6. Why do you think Wright Air has introduced environmental measures in its balanced scorecard? Is the company meeting its performance objectives in this area? Required

Target Performance Performance Actual Objectives Measures Financial Perspective Increase shareholder value Operating-income changes from productivity Operating-income changes from price recovery Operating-income changes from growth Cost savings due to reduction in jet fuel consumption $7,200,000 $8,400,000 $2,700,000 $3,600,000 $3,000,000 $3,960,000 $900,000 $1,080,000 Customer Perspective 2nd in 1st in industry Increase the number of on-time FAA on-time arrival ranking arrivals industry Improve brand image Percentage of customer survey respondents with greater than 90% approval rating on com- pany's sustainability efforts 100% 96% Internal-Business-Process Perspective On-ground time Number of engineering changes that decreased CO, emissions Reduce turnaround time <25 minutes 30 minutes Reduce CO2 emissions 10 Learning-and-Growth Perspective Align ground crews 70% % of ground crew stockholders Achieve ISO 50001 certification in energy management 68% Acquire new energy management tool and technology Acquire certification by Dec. 31 Acquired certification by Dec. 31 1. What is WrightAir's strategy? Was WrightAir successful in implementing its strategy in 2017? Explain your answer. 2. Draw a strategy map as in Exhibit 12-2 for WrightAir describing the cause-and-effect relationships among the strategic objectives described in the balanced scorecard. Identify what you believe are any (a) strong ties, (b) focal points, (c) trigger points, and (d) distinctive objectives. Comment on your structural analysis of the strategy map. 3. Based on the strategy identified in requirement 1 above, what role does the price-recovery component play in explaining the success of WrightAir? 4. Would you have included customer-service measures in the customer perspective? Why or why not? Explain briefly. 5. Would you have included some measure of employee satisfaction and employee training in the learning-and-growth perspective? Would you consider this objective critical to WrightAir for imple- menting its strategy? Why or why not? Explain briefly. 6. Why do you think Wright Air has introduced environmental measures in its balanced scorecard? Is the company meeting its performance objectives in this area? Required

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Balanced scorecard, environmental, and social performance. WrightAir is a no-frills airline that services the Midwest. Its mission is to be the only short-haul, low-fare, high-frequency, pointto- point carrier in the Midwest. However, there are several large commercial carriers offering air transportation, and WrightAir knows that it cannot compete with them based on the services those carriers provide. WrightAir has chosen to reduce costs by not offering many inight services, such as food and entertainment options. Instead, the company is dedicated to providing the highest quality transportation at the lowest fare. WrightAir’s balanced scorecard measures (and actual results) for 2017 follow:

Transcribed Image Text:Target Performance Performance Actual Objectives Measures Financial Perspective Increase shareholder value Operating-income changes from productivity Operating-income changes from price recovery Operating-income changes from growth Cost savings due to reduction in jet fuel consumption $7,200,000 $8,400,000 $2,700,000 $3,600,000 $3,000,000 $3,960,000 $900,000 $1,080,000 Customer Perspective 2nd in 1st in industry Increase the number of on-time FAA on-time arrival ranking arrivals industry Improve brand image Percentage of customer survey respondents with greater than 90% approval rating on com- pany's sustainability efforts 100% 96% Internal-Business-Process Perspective On-ground time Number of engineering changes that decreased CO, emissions Reduce turnaround time <25 minutes 30 minutes Reduce CO2 emissions 10 Learning-and-Growth Perspective Align ground crews 70% % of ground crew stockholders Achieve ISO 50001 certification in energy management 68% Acquire new energy management tool and technology Acquire certification by Dec. 31 Acquired certification by Dec. 31

1. What is WrightAir's strategy? Was WrightAir successful in implementing its strategy in 2017? Explain
your answer.
2. Draw a strategy map as in Exhibit 12-2 for WrightAir describing the cause-and-effect relationships
among the strategic objectives described in the balanced scorecard. Identify what you believe are
any (a) strong ties, (b) focal points, (c) trigger points, and (d) distinctive objectives. Comment on your
structural analysis of the strategy map.
3. Based on the strategy identified in requirement 1 above, what role does the price-recovery component
play in explaining the success of WrightAir?
4. Would you have included customer-service measures in the customer perspective? Why or why not?
Explain briefly.
5. Would you have included some measure of employee satisfaction and employee training in the
learning-and-growth perspective? Would you consider this objective critical to WrightAir for imple-
menting its strategy? Why or why not? Explain briefly.
6. Why do you think Wright Air has introduced environmental measures in its balanced scorecard? Is the
company meeting its performance objectives in this area?
Required

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