The Italian Pharmaceuticals Company (IPC) recently revised its performance evaluation system. The…

The Italian Pharmaceuticals Company (IPC) recently revised its performance evaluation system. The company identified four major goals and several objectives required to meet each goal. Andrea Dossi, accountant at IPC, suggested that a balanced scorecard be used to report on progress toward meeting the objectives. At a recent meeting, she told the managers of IPC that listing the objectives was only the first step in installing a new performance measurement system. Each objective has to be accompanied by one or more measures to monitor progress toward achieving the objectives. She asked the help of the managers in identifying appropriate measures. The goals and objectives determined by the top management of IPC are as follows:

1 Maintain strong financial health.

(a) Keep sufficient cash balances to assure financial survival.

(b) Achieve consistent growth in sales and income.

(c) Provide excellent returns to shareholders.

2 Provide excellent service to customers.

(a) Provide products that meet the needs of customers.

(b) Meet customer needs on a timely basis.

(c) Meet customer quality requirements.

(d) Be the preferred supplier to customers.

3 Be among the industry leaders in product and process innovations.

(a) Bring new products to market before competition.

(b) Lead competition in production process innovation.

4 Develop and maintain efficient, state-of-the-art production processes.

(a) Excel in manufacturing efficiency.

(b) Meet or beat product introduction schedules. Propose at least one measure of performance for each of the objectives of IPC.

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