EXERCISE 10-15 (CONTINUED) ALTERNATIVE SOLUTION

2. The hypotheses underlying the balanced scorecard are indicated by the arrows in the diagram. Reading from the bottom of the balanced score-card, the hypotheses are: o If the percentage of dining room staff who complete the basic hospi-tality course increases, then the average time to take an order will decrease. tality course increases, then dining room cleanliness will improve. o If the percentage of kitchen staff who complete the basic cooking course increases, then the average time to prepare an order will de-crease. course increases, then the number of menu items will increase. o If the dining room cleanliness improves, then customer satisfaction with service will increase. o If the average time to take an order decreases, then customer satis-faction with service will increase. o If the average time to prepare an order decreases, then customer satisfaction with service will increase. o If the number of menu items increases, then customer satisfaction with menu choices will increase. o If customer satisfaction with service increases, weekly sales will in-o If customer satisfaction with menu choices increases, weekly sales will increase. o If sales increase, weekly profits for the Lodge will increase. Each of these hypotheses is questionable to some degree. For example, the items added to the menu may not appeal to customers. So even if the number of menu items increases, customer satisfaction with the menu choices may not increase. The fact that each of the hypotheses can be questioned does not, however, invalidate the balanced score-card. If the scorecard is used correctly, management will be able to identify which, if any, of the hypotheses are incorrect. [See below.] Problem 10-28 (continued)