Robert S. Kaplan

Senior Fellow, Marvin Bower Professor of Leadership Development, Emeritus

Unit: Accounting and Management

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Robert S. Kaplan is the Marvin Bower Professor of Leadership Development, Emeritus at the Harvard Business School. He joined the HBS faculty in 1984 after spending 16 years on the faculty of the business school at Carnegie-Mellon University, where he served as Dean from 1977 to 1983. Kaplan received a B.S. and M.S. in Electrical Engineering from M.I.T., and a Ph.D. in Operations Research from Cornell University. He has received honorary doctorates from the Universities of Stuttgart (1994), Lodz (2006), and Waterloo (2008).

Kaplan’s research, Executive Education teaching, and consulting focus on linking cost and performance management systems to strategy implementation. His current research focuses on two topics: measuring and managing organizational risk and, in a joint project with Michael Porter, measuring the cost of delivering health care and linking patient costs to outcomes.

Kaplan was co-developer of both activity-based costing and the Balanced Scorecard. He has authored or co-authored 14 books and more than 150 papers including 23 in Harvard Business Review. Recent books include The Execution Premium: Linking Strategy to Operations for Competitive Advantage, the fifth Balanced Scorecard book co-authored with David Norton, and Time-Driven Activity-Based Costing with Steve Anderson. His previous books with Norton include Alignment, Strategy Maps, named as one of the top ten business books of 2004 by Strategy & Business and amazon.com, The Strategy-Focused Organization, named by Cap Gemini Ernst & Young as the best international business book for year 2000, and The Balanced Scorecard: Translating Strategy into Action, which has been translated into 24 languages and won the 2001 Wildman Medal from the American Accounting Association for its impact on practice. He also co-authored Cost and Effect, Implementing Activity-Based Cost Management, and Relevance Lost: The Rise and Fall of Management Accounting, which received the American Accounting Association Seminal Contributions to Literature Award in 2007.

Elected to the Accounting Hall of Fame in 2006, Kaplan received the Lifetime Contribution Award for Distinguished Contributions to Advancing the Management Accounting Profession from the Institute of Management Accountants in 2008, and the Lifetime Contribution Award from the Management Accounting Section of the American Accounting Association (AAA) in 2006.  He received the Outstanding Accounting Educator Award in 1988 from the AAA, the 1994 CIMA Award from the Chartered Institute of Management Accountants (UK) for "Outstanding Contributions to the Accountancy Profession," and the 2001 Distinguished Service Award from the Institute of Management Accountants (IMA) for contributions to the practice and academic community. Kaplan speaks globally on performance and cost management systems.

Featured Work

Publications

Books

  1. Management Accounting: Information for Decision Making and Strategy Execution

    An approach to management accounting from the perspective of a business manager.

    Keywords: Strategy; Cost Accounting; Managerial Roles; Decision Making;

    Citation:

    Atkinson, Anthony A., Robert S. Kaplan, Ella Mae Matsumura, and S. Mark Young. Management Accounting: Information for Decision Making and Strategy Execution. 6 Pearson Education, 2011. View Details
  2. Execution Premium: Linking Strategy to Operations for Competitive Advantage

    In a world of stiffening competition, business strategy is more crucial than ever. Yet most organizations struggle in this area--not with formulating strategy but with executing it, or putting their strategy into action. Owing to execution failures, companies realize just a fraction of the financial performance promised in their strategic plans. It doesn't have to be that way, maintain Robert Kaplan and David Norton in The Execution Premium. Building on their breakthrough works on strategy-focused organizations, the authors describe a multistage system that enables you to gain measurable benefits from your carefully formulated business strategy. This book shows you how to: Develop an effective strategy--with tools such as SWOT analysis, vision formulation, and strategic change agendas. Plan execution of the strategy--through portfolios of strategic initiatives linked to strategy maps and Balanced Scorecards. Put your strategy into action--by integrating operational tools such as process dashboards, rolling forecasts, and activity-based costing. Test and update your strategy--using carefully designed management meetings to review operational and strategic data. Drawing on extensive research and detailed case studies from a broad array of industries, The Execution Premium presents a systematic and proven framework for achieving the financial results promised by your strategy.

    Keywords: Management Analysis, Tools, and Techniques; Operations; Performance; Strategic Planning; Business Strategy;

    Citation:

    Kaplan, Robert S., and David P. Norton. Execution Premium: Linking Strategy to Operations for Competitive Advantage. Harvard Business Press, 2008. View Details
  3. The Balanced Scorecard: Translating Strategy into Action

    Keywords: Balanced Scorecard;

    Citation:

    Kaplan, Robert S., and David P. Norton. The Balanced Scorecard: Translating Strategy into Action. Boston: Harvard Business School Press, 1996. (Nominated for Financial Times/ Booz-Allen & Hamilton Global Business Book Award presented by Booz-Allen & Hamilton. Winner of Notable Contribution to Management Accounting Literature Award presented by American Accounting Association.) View Details
  4. Implementing Activity-Based Cost Management: Moving from Analysis to Action

    Keywords: Activity Based Costing and Management;

    Citation:

    Kaplan, Robert S., Robin Cooper, Larry Maisel, Eileen Morrissey, and Ronald M. Oehm. Implementing Activity-Based Cost Management: Moving from Analysis to Action. Montvale, NJ: Institute of Management Accountants, 1992. (Winner of Notable Contribution to Management Accounting Literature Award presented by American Accounting Association.) View Details

Journal Articles

  1. How Not to Cut Health Care Costs

    Health care providers in much of the world are trying to respond to the tremendous pressure to reduce costs—but evidence suggests that many of their attempts are counterproductive, raising costs and sometimes decreasing the quality of care. Using evidence from field research conducted at more than 50 health care provider organizations, Kaplan and Haas identify five common mistakes when managers attempt to cut health care costs. The mistakes are triggered, primarily, by working from the line-item expense categories on P&Ls, rather than clinically based structural models of the processes actually used to deliver care. Sustainable cost reduction is best achieved by optimizing the quantity and mix of all the resources needed to produce excellent outcomes for a patient's medical condition, not by across-the-board reductions in line-item expenses.

    Citation:

    Kaplan, Robert S., and Derek A. Haas. "How Not to Cut Health Care Costs." Harvard Business Review 92, no. 11 (November 2014): 116–122. View Details
  2. Improving Value with TDABC

    The article discusses the benefits of time-driven activity-based costing (TDABC) combined with outcomes measurement for healthcare organizations. Topics covered include improving resource efficiency, optimizing care over the complete care cycle, and planning and budgeting of resource capacity. It also mentions that TDABC enhances quality of care and clinical outcomes while reducing healthcare costs.

    Keywords: Goals and Objectives; Activity Based Costing and Management; Health Care and Treatment; Health Industry;

    Citation:

    Kaplan, Robert S. "Improving Value with TDABC." hfm (Healthcare Financial Management) 68, no. 6 (June 2014): 76–83. View Details
  3. Better Accounting Transforms Health Care Delivery

    The paper describes the theory and preliminary results for an action research program that explores the implications from better measurements of health care outcomes and costs. After summarizing Porter's outcome taxonomy (Porter 2010), we illustrate how to use process mapping and time-driven activity-based costing to measure the costs of treating patients over a complete cycle of care for a specific medical condition. With valid outcome and cost information, managers and clinicians can standardize clinical and administrative processes, eliminate non-value added and redundant steps, improve resource utilization, and redesign care so that appropriate medical resources perform each process step. These actions enable costs to be reduced while maintaining or improving medical outcomes. Better measurements also allow payers to offer bundled payments, based on the costs of using efficient processes and contingent on achieving superior outcomes. The end result will be a more effective and more productive health care sector. The paper concludes with suggestions for accounting research opportunities in the sector.

    Keywords: Activity Based Costing and Management; Research; Health Care and Treatment; Health Industry;

    Citation:

    Kaplan, Robert S., and Mary L. Witkowski. "Better Accounting Transforms Health Care Delivery." Accounting Horizons 28, no. 2 (June, 2014): 365–383. View Details
  4. The Balanced Scorecard: Comments on Balanced Scorecard Commentaries

    This paper provides the author's insights about five papers written in this volume about his published work on the balanced scorecard (BSC). The author finds that academic commentary on the BSC often ignores its role in strategy execution. The paper discusses how the BSC can be used in public sector applications, as well as for companies that want to internalize environmental, social, and community objectives in their strategies. It also presents constructive suggestions for how to teach about the BSC in MBA and executive programs.

    Keywords: balanced scorecard; strategy execution; performance management; Strategy; Public Sector; Balanced Scorecard; Performance;

    Citation:

    Kaplan, Robert S. "The Balanced Scorecard: Comments on Balanced Scorecard Commentaries." Journal of Accounting & Organizational Change 8, no. 4 (2012): 539–545. View Details
  5. Managing Risks: A New Framework

    Risk management is too often treated as a compliance issue that can be solved by drawing up lots of rules and making sure that all employees follow them. Many such rules, of course, are sensible and do reduce some risks that could severely damage a company. But rules-based risk management will not diminish either the likelihood or the impact of a disaster, such as Deepwater Horizon, just as it did not prevent the failure of many financial institutions during the 2007–2008 credit crisis. In this article, Robert S. Kaplan and Anette Mikes present a categorization of risk that allows executives to understand the qualitative distinctions between the types of risks that organizations face. Preventable risks, arising from within the organization, are controllable and ought to be eliminated or avoided. Examples are the risks from employees' and managers' unauthorized, unethical, or inappropriate actions and the risks from breakdowns in routine operational processes. Strategy risks are those a company voluntarily assumes in order to generate superior returns from its strategy. External risks arise from events outside the company and are beyond its influence or control. Sources of these risks include natural and political disasters and major macroeconomic shifts. Risk events from any category can be fatal to a company's strategy and even to its survival. Companies should tailor their risk management processes to these different risk categories. A rules-based approach is effective for managing preventable risks, whereas strategy risks require a fundamentally different approach based on open and explicit risk discussions. To anticipate and mitigate the impact of major external risks, companies can call on tools such as war gaming and scenario analysis.

    Keywords: Risk Management; Governance Controls; Corporate Strategy; Management Analysis, Tools, and Techniques; Framework;

    Citation:

    Kaplan, Robert S., and Anette Mikes. "Managing Risks: A New Framework." Harvard Business Review 90, no. 6 (June 2012). View Details
  6. How to Solve the Cost Crisis in Health Care

    Existing health care costing systems have serious flaws that make it impossible to measure costs accurately at the individual patient and medical condition level. This gap has severely limited meaningful cost reduction throughout the system. The paper describes a new (for health care) approach that can accurately measure the costs incurred over the care cycle for a patient's condition. Combining this cost information along with the patient outcomes achieved reveals major opportunities for health care providers and third-party payers to transform the economics of delivering health care. We illustrate multiple ways for providers to drive costs out of the system while simultaneously improving the quality of care they deliver.

    Keywords: Cost; Health Care and Treatment; Measurement and Metrics; Service Delivery; Outcome or Result; Quality; Health Industry;

    Citation:

    Kaplan, Robert S., and Michael E. Porter. "How to Solve the Cost Crisis in Health Care." Harvard Business Review 89, no. 9 (September 2011): 47–64. View Details
  7. Managing the Multiple Dimensions of Risk-Part II: The Office of Risk Management

    In the second article of our two-part series, we explore the concept of an Office of Risk Management along with a case study of an innovative risk management function at JP Morgan Private Bank. We also look at the "softer" components of risk management, including a comparison of two different, equally effective risk officer styles and roles.

    Keywords: Banks and Banking; Innovation and Invention; Management Style; Managerial Roles; Risk Management;

    Citation:

    Mikes, Anette, and Robert S. Kaplan. "Managing the Multiple Dimensions of Risk-Part II: The Office of Risk Management." Balanced Scorecard Report 13, no. 5 (September–October 2011): 1–6. View Details
  8. The Hollow Science

    The financial meltdown made clear that the executives of many major financial institutions were operating with inadequate or distorted information about the values and risks of their firms' assets. It's fair to say that business scholars bear some responsibility for that. Most of them are neither studying nor teaching emerging best practices in asset valuation and risk management. They need to begin exploring the interior of leading-edge companies to provide detailed, qualitative case studies.

    Keywords: Accounting; Financial Crisis; Financial Management; Information; Knowledge Acquisition; Risk Management; Practice;

    Citation:

    Kaplan, Robert S. "The Hollow Science." Harvard Business Review 89, no. 5 (May 2011). View Details
  9. Accounting Scholarship That Advances Professional Knowledge and Practice

    Recent accounting scholarship has used statistical analysis on asset prices, financial reports and disclosures, laboratory experiments, and surveys of practice. The research has studied the interface among accounting information, capital markets, standard setters, and financial analysts and how managers make accounting choices. But as accounting scholars have focused on understanding how markets and users process accounting data, they have distanced themselves from the accounting process itself. Accounting scholarship has failed to address important measurement and valuation issues that have arisen in the past 40 years of practice. This gap is illustrated with missed opportunities in risk measurement and management and the estimation of the fair value of complex financial securities. The paper encourages accounting scholars to devote more resources to obtaining a fundamental understanding of contemporary and future practice and how analytic tools and contemporary advances in accounting and related disciplines can be deployed to improve the professional practice of accounting.

    Keywords: Corporate Disclosure; Asset Pricing; Risk Management; Surveys; Capital Markets; Measurement and Metrics; Valuation; Fair Value Accounting; Management Analysis, Tools, and Techniques; Financial Reporting;

    Citation:

    Kaplan, Robert S. "Accounting Scholarship That Advances Professional Knowledge and Practice." Accounting Review 86, no. 2 (March 2011). View Details
  10. The Emerging Capital Market for Nonprofits

    Many of our largest and most successful companies today did not exist 50 years ago. During this same time interval, companies that ranked among top in the 1960s have disappeared, been merged out of existence, or become much smaller presences in the U.S. industrial scene. These shifts in fortunes are vivid examples of the private sector's cycle of Schumpeterian creative destruction. In contrast, the list of the largest nonprofit organizations has remained stable over decades. Large nonprofits do not disappear and few new ones—Habitat for Humanity and Teach for America are among the exceptions—scale to national size. Schumpeter's cycle apparently does not operate in the social sector. This paper proposes that the disparity arises from the nonprofit sector's historically immature infrastructure and poor mechanisms for channeling funds from donors and foundations to the most effective nonprofits and away from underperforming ones. We illustrate how innovative information and financial intermediaries, using new measurement approaches tailored for the nonprofit sector, have recently arisen to help direct funds to the most effective nonprofits. These innovations have the potential to enable the sector to become far more responsive, effective, and efficient in creating positive social impact at a national scale.

    Keywords: Capital Markets; Investment Funds; Giving and Philanthropy; Corporate Accountability; Management Practices and Processes; Infrastructure; Corporate Social Responsibility and Impact; Performance Effectiveness; Nonprofit Organizations;

    Citation:

    Kaplan, Robert S., and Allen S. Grossman. "The Emerging Capital Market for Nonprofits." Harvard Business Review 88, no. 10 (October 2010). View Details
  11. Managing Alliances with the Balanced Scorecard

    The article addresses failures in strategic alliances and illustrates, via a detailed description of the successful strategic alliance between Solvay Pharmaceuticals Inc. and Quintiles company how the creation of a strategy map and Balanced Scorecard helps align the separate interests of alliance partners into a coherent joint strategy. These tools are then used to communicate the common vision to all alliance employees and establish a governance process that keeps everyone focused on achieving the alliance's strategic objectives.

    Keywords: Alliances; Balanced Scorecard; Employees; Alignment; Corporate Governance; Interests; Management Practices and Processes; Goals and Objectives; Partners and Partnerships;

    Citation:

    Kaplan, Robert S., David P. Norton, and Bjarne Rugelsjoen. "Managing Alliances with the Balanced Scorecard." Harvard Business Review 88, no. 1 (January–February 2010): 114–120. View Details
  12. Managing Risk in the New World

    Five experts gathered recently to discuss the future of enterprise risk management: Kaplan, the Baker Foundation Professor at Harvard Business School, who with his colleague David Norton developed the balanced scorecard; Mikes, an assistant professor at HBS who studies the evolution of risk management and the role of the chief risk officer; Simons, the Charles M. Williams Professor of Business Administration at HBS; Tufano, the Sylvan C . Coleman Professor of Financial Management at HBS; and Hofmann, the chief risk officer at Koch Industries. The panel was moderated by HBR senior editor David Champion. Among the questions they addressed were: How predictable was the financial meltdown of 2008-2009? Did new tools for assessing risk give a false sense of security? How do the challenges facing industrial companies differ from those facing the financial sector? Is outsourcing an effective risk-management tool? Have capital structures become a bit too efficient in many companies? What makes a good chief risk officer? Of all the management tasks that were bungled in the period leading up to the global recession of 2008--2009, none was bungled more egregiously than the management of risk. This HBR Spotlight attempts to untangle the reasons that major systemic failures occurred, and to pin down some lessons for leaders and managers in the future.

    Keywords: Forecasting and Prediction; Financial Crisis; Capital Structure; Job Cuts and Outsourcing; Risk Management;

    Citation:

    Kaplan, Robert S., Anette Mikes, Robert Simons, Peter Tufano, and Michael Hofmann Jr. "Managing Risk in the New World." Harvard Business Review 87, no. 10 (October 2009): 68–75. View Details
  13. Mastering the Management System

    Companies have always found it hard to balance pressing operational concerns with long-term strategic priorities. The tension is critical: World-class processes won't lead to success without the right strategic direction, and the best strategy in the world will get nowhere without strong operations to execute it. In this article, Kaplan, of Harvard Business School, and Norton, founder and di-rector of the Palladium Group, explain how to effectively manage both strategy and operations by linking them tightly in a closed-loop management system. The system comprises five stages, beginning with strategy development, which springs from a company's mission, vision, and value statements, and from an analysis of its strengths, weaknesses, and competitive environment. In the next stage, managers translate the strategy into objectives and initiatives with strategy maps, which organize objectives by themes, and balanced scorecards, which link objectives to performance metrics. Stage three involves creating an operational plan to accomplish the objectives and initiatives; it includes targeting process improvements and preparing sales, resource, and capacity plans and dynamic budgets. Managers then put plans into action, monitoring their effectiveness in stage four. They review operational, environmental, and competitive data; assess progress; and identify barriers to execution. In the final stage, they test the strategy, analyzing cost, profitability, and correlations between strategy and performance. If their underlying assumptions appear faulty, they update the strategy, beginning another loop. The authors present not only a comprehensive blueprint for successful strategy execution but also a managerial tool kit, illustrated with examples from HSBC Rail, Cigna Property and Casualty, and Store 24. The kit incorporates leading management experts' frameworks, outlining where they fit into the management cycle.

    Keywords: Framework; Management Analysis, Tools, and Techniques; Management Systems; Operations; Performance Improvement; Strategy;

    Citation:

    Kaplan, Robert S., and David P. Norton. "Mastering the Management System." Special Issue on HBS Centennial. Harvard Business Review 86, no. 1 (January 2008): 62–77. View Details
  14. Fast-Track Profit Models: Creating the New Due-Diligence Process for Mergers and Acquisitions

    Keywords: Profit; Mergers and Acquisitions;

    Citation:

    Anderson, Steven R., Kevin J. Prokop, and Robert S. Kaplan. "Fast-Track Profit Models: Creating the New Due-Diligence Process for Mergers and Acquisitions." Journal of Private Equity 10, no. 3 (summer 2007): 22–34. View Details
  15. Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part II

    Keywords: Balanced Scorecard; Transformation; Performance; Measurement and Metrics; Strategy; Management;

    Citation:

    Kaplan, Robert S., and David P. Norton. "Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part II." Accounting Horizons (June 2001). View Details
  16. Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part I

    Keywords: Balanced Scorecard; Transformation; Performance; Measurement and Metrics; Strategy; Management;

    Citation:

    Kaplan, Robert S., and David P. Norton. "Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part I." Accounting Horizons (March 2001): 87–104. View Details
  17. The Balanced Scorecard: A Strategic Management System for Multi-Sector Collaboration and Strategy Implementation

    Keywords: Balanced Scorecard; Strategy; Management; Cooperation;

    Citation:

    Kaplan, Robert S., Noorein Inamdar, Mary Lou Helfrich Jones, and Rita Menitoff. "The Balanced Scorecard: A Strategic Management System for Multi-Sector Collaboration and Strategy Implementation." Quality Management in Health Care (summer 2000): 21–39. View Details

Book Chapters

  1. Conceptual Foundations of the Balanced Scorecard

    David Norton and I introduced the Balanced Scorecard in a 1992 Harvard Business Review article. The article was based on a multi-company research project that studied performance measurement in companies whose intangible assets played a central role in value creation. Our interest in measurement for driving performance improvements arose from a belief articulated more than a century earlier by a prominent British scientist, Lord Kelvin:

    I often say that when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind.

    If you can not measure it, you can not improve it.

    Norton and I believed that measurement was as fundamental to managers as it was for scientists. If companies were to improve the management of their intangible assets, they had to integrate the measurement of intangible assets into their management systems.

    After publication of the 1992 HBR article, several companies quickly adopted the Balanced Scorecard giving us deeper and broader insights into its power and potential. During the next 15 years, as it was adopted by thousands of private, public, and nonprofit enterprises around the world, we extended and broadened the concept into a management tool for describing, communicating and implementing strategy. In this chapter, I describe the roots and motivation for the original Balanced Scorecard article as well as the subsequent innovations that connected it to a larger management literature. The chapter uses the following structure for organizing the origin and subsequent development of the Balanced Scorecard:

    1.      Balanced Scorecard for Performance Measurement

    2.      Strategic Objectives and Strategy Maps

    3.      The Strategy Management System

    4.      Future Opportunities

    Keywords: Balanced Scorecard; Management Systems; Measurement and Metrics; Performance Improvement; Strategy;

    Citation:

    Kaplan, Robert S. "Conceptual Foundations of the Balanced Scorecard." Chap. 1.03 in Handbook of Management Accounting Research. Vol. 3, edited by Christopher Chapman, Anthony Hopwood, and Michael Shields. Elsevier, 2008. View Details
  2. Use the Balanced Scorecard to Partner with Strategic Constituents: Employees, Customers, Suppliers, and Communities

    Keywords: Balanced Scorecard; Employee Relationship Management; Customer Relationship Management; Business and Community Relations; Business and Stakeholder Relations;

    Citation:

    Kaplan, Robert S., and David P. Norton. "Use the Balanced Scorecard to Partner with Strategic Constituents: Employees, Customers, Suppliers, and Communities." Chap. 2 in Partnering: The New Face of Leadership, edited by Larraine Segil, Marshall Goldsmith, and James Belasco, 9–33. New York: AMACOM, 2002. View Details
  3. Originality in Management Accounting Systems: Field Studies of the Processes

    Keywords: Accounting; Innovation and Management;

    Citation:

    Kaplan, Robert S. "Originality in Management Accounting Systems: Field Studies of the Processes." In New Directions in Creative and Innovative Management, edited by Y. Ijiri and R. L. Kuhn, 103–114. Cambridge, MA: Ballinger Publishing Company, 1988. View Details
  4. How Cost Accounting Systematically Distorts Product Costs

    Keywords: Cost Accounting; Product;

    Citation:

    Kaplan, Robert S., and Robin Cooper. "How Cost Accounting Systematically Distorts Product Costs." Chap. 8 in Accounting and Management: Field Study Perspectives, edited by W. J. Bruns Jr. and R. S. Kaplan, 204–228. Boston: Harvard Business School Press, 1987. View Details
  5. The Role of Field Studies in Accounting Research and the Development of Accounting

    Keywords: Accounting;

    Citation:

    Kaplan, Robert S. "The Role of Field Studies in Accounting Research and the Development of Accounting." Introduction to Accounting and Management: Field Study Perspectives, edited by W. J. Bruns Jr. and R. S. Kaplan, 1–14. Boston: Harvard Business School Press, 1987. View Details
  6. Regaining Relevance

    Citation:

    Kaplan, Robert S. "Regaining Relevance." In Cost Accounting, Robotics, and the New Manufacturing Environment, edited by Robert Capettini and Donald K. Clancy. Sarasota, FL: American Accounting Association, 1987. View Details
  7. Should Accounting Standards be Set inthe Public or Private Sector?

    Keywords: Accounting; Standards; Public Sector; Private Sector; Decision Making;

    Citation:

    Kaplan, Robert S. "Should Accounting Standards be Set inthe Public or Private Sector?" In Regulation and the Accounting Profession, edited by John W. Buckley and J. Fred Weston, 178–195. Belmont, CA: Wadsworth Publishing Company, 1980. View Details
  8. A Comparison of Rates of Return to Social Security Retirees under Wage and Price Indexing

    Keywords: Retirement; Investment Return; Wages; Price; United States;

    Citation:

    Kaplan, Robert S. "A Comparison of Rates of Return to Social Security Retirees under Wage and Price Indexing." In Financing Social Security, edited by Colin D. Campbell, 119–144. Washington, D.C.: American Enterprise Institute for Public Policy Research, 1979. View Details
  9. Information Content of Financial Accounting Numbers: A Survey of Empirical Evidence

    Keywords: Accounting; Information;

    Citation:

    Kaplan, Robert S. "Information Content of Financial Accounting Numbers: A Survey of Empirical Evidence." In The Impact of Accounting Research on Practice and Disclosure, edited by A. Rashad Abdel-Khalik and Thomas Keller, 134–173. Durham, NC: Duke University Press, 1978. View Details

Working Papers

  1. Towards a Contingency Theory of Enterprise Risk Management

    Enterprise risk management (ERM) has become a crucial component of contemporary corporate governance reforms, with an abundance of principles, guidelines, and standards. This paper portrays ERM as an evolving discipline and presents empirical findings on its current state of maturity, as evidenced by a survey of the academic literature and by our own field research. Academics are increasingly examining the adoption and impact of ERM, but the studies are inconsistent and inconclusive, due, we believe, to an inadequate specification of how ERM is used in practice. Based on a ten-year field project, over 250 interviews with senior risk officers, and three detailed case studies, we put forward a contingency theory of ERM, identifying potential design parameters that can explain observable variation in the "ERM mix" adopted by organizations. We also add a new contingent variable: the type of risk that a specific ERM practice addresses. We outline a "minimum necessary contingency framework" (Otley, 1980) that is sufficiently nuanced, while still empirically observable, that empirical researchers may, in due course, hypothesize about "fit" between contingent variables, such as risk types and the ERM mix, as well as about outcomes such as organizational effectiveness.

    Keywords: Risk Management;

    Citation:

    Mikes, Anette, and Robert S. Kaplan. "Towards a Contingency Theory of Enterprise Risk Management." Harvard Business School Working Paper, No. 13-063, January 2013. (Revised January 2014.) View Details
  2. Accounting Scholarship that Advances Professional Knowledge and Practice

    Recent accounting scholarship has used statistical analysis on asset prices, financial reports and disclosures, laboratory experiments, and surveys of practice. The research has studied the interface among accounting information, capital markets, standard setters, and financial analysts and how managers make accounting choices. But as accounting scholars have focused on understanding how markets and users process accounting data, they have distanced themselves from the accounting process itself. Accounting scholarship has failed to address important measurement and valuation issues that have arisen in the past 40 years of practice. This gap is illustrated with missed opportunities in risk measurement and management and the estimation of the fair value of complex financial securities. The paper encourages accounting scholars to devote more resources to obtaining a fundamental understanding of contemporary and future practice and how analytic tools and contemporary advances in accounting and related disciplines can be deployed to improve the professional practice of accounting.

    Keywords: Accounting; Business Education; Information; Management Analysis, Tools, and Techniques; Risk Management; Measurement and Metrics; Business Processes; Performance Improvement; Practice;

    Citation:

    Kaplan, Robert S. "Accounting Scholarship that Advances Professional Knowledge and Practice." Harvard Business School Working Paper, No. 11-043, October 2010. View Details
  3. Conceptual Foundations of the Balanced Scorecard

    David Norton and I introduced the Balanced Scorecard in a 1992 Harvard Business Review article (Kaplan & Norton, 1992). The article was based on a multi-company research project to study performance measurement in companies whose intangible assets played a central role in value creation (Nolan Norton Institute, 1991). Norton and I believed that if companies were to improve the management of their intangible assets, they had to integrate the measurement of intangible assets into their management systems. After publication of the 1992 HBR article, several companies quickly adopted the Balanced Scorecard giving us deeper and broader insights into its power and potential. During the next 15 years, as it was adopted by thousands of private, public, and nonprofit enterprises around the world, we extended and broadened the concept into a management tool for describing, communicating and implementing strategy. This paper describes the roots and motivation for the original Balanced Scorecard article as well as the subsequent innovations that connected it to a larger management literature.

    Keywords: Asset Management; Balanced Scorecard; Management Systems; Performance Improvement; Strategy;

    Citation:

    Kaplan, Robert S. "Conceptual Foundations of the Balanced Scorecard." Harvard Business School Working Paper, No. 10-074, March 2010. View Details

Cases and Teaching Materials

  1. Boston Children's Hospital: Measuring Patient Costs (Abridged)

    The case describes a pilot project on applying activity-based costing to measure the cost of treating patients. After an overview of Boston Children's Hospital and its local health care market environment, the case presents process maps and financial data relating to patients making office visits to a plastic surgeon for three different diagnoses. Students use the hospital's existing cost system and a proposed new system, based on time-driven activity-based costing, to calculate and compare costs and margins of the three types of office visits.

    Keywords: health care; Time-Driven Activity-Based Costing; Costing; Hospitals; Activity Based Costing and Management;

    Citation:

    Kaplan, Robert S. "Boston Children's Hospital: Measuring Patient Costs (Abridged)." Harvard Business School Case 914-407, September 2013. View Details
  2. Boston Children's Hospital: Measuring Patient Costs (V)

    Keywords: health care; Time-Driven Activity-Based Costing; Costing; Hospitals; Activity Based Costing and Management;

    Citation:

    Kaplan, Robert S., Mary L. Witkowski, and Jessica A. Hohman. "Boston Children's Hospital: Measuring Patient Costs (V)." Harvard Business School Case 113-057, November 2012. (Revised December 2012.) View Details
  3. Schön Klinik: Measuring Cost and Value

    The case illustrates how a leading German hospital group has invested deeply in the measurement of patient-level outcomes and costs, the foundations of a health care value framework. The company launches a pilot project to use time-driven activity-based costing (TDABC) for measuring the cost of total knee replacements. The costing project complements an existing initiative for comprehensive outcomes measurement. The combination of accurate measurement of outcomes and costs empowers local personnel — physicians, nurses, and administrators — to improve the value of care they deliver. It also permits benchmarking across the group's multiple hospital sites to identify best practices that can be shared. The case concludes with a decision on using outcome and cost measurement to inform the adoption of a new recuperative approach that promises to dramatically lower post-surgical length-of-stays.

    Keywords: health care; Costing; Activity-Based Costing; Hospitals; Activity Based Costing and Management; Value; Health Care and Treatment; Outcome or Result; Health Industry; Germany;

    Citation:

    Kaplan, Robert S., Mary L. Witkowski, and Jessica A. Hohman. "Schön Klinik: Measuring Cost and Value." Harvard Business School Case 112-085, March 2012. View Details
  4. Boston Children's Hospital: Measuring Patient Costs

    The case describes two pilot projects on applying activity-based costing to measuring the cost of treating patients. It presents process maps and financial data relating to the processes used during (1) an office visit to a plastic surgeon for three different diagnoses and (2) application and removal of three different casts in the orthopedic cast room. Students calculate and compare the costs and margins of the three procedures at the two different sites using the hospital's existing cost system and a proposed new system based on time-driven activity-based costing.

    Keywords: health care; Time-Driven Activity-Based Costing; Costing; Hospitals; Activity Based Costing and Management; Mathematical Methods; Health Industry;

    Citation:

    Kaplan, Robert S., Mary L. Witkowski, and Jessica A. Hohman. "Boston Children's Hospital: Measuring Patient Costs." Harvard Business School Case 112-086, March 2012. (Revised January 2013.) View Details
  5. Volkswagen do Brasil: Driving Strategy with the Balanced Scorecard

    A new management team at VW do Brazil develops and deploys a strategy map and Balanced Scorecard to accomplish a turnaround and cultural change after eight consecutive years of financial losses and market share declines. The team uses the strategy map to align financial and project resources to the strategy, and to motivate its more than 20,000 employees by communicating the strategy in multiple ways and installing reward and recognition programs. It also establishes new programs to align the extensive networks of suppliers and dealers to the strategy. But after a sharp decline in sales triggered by the global financial crisis of 2008, the executive team faces a dilemma: should cut back production levels and funding for strategic initiatives until sales recover, or should it continue to invest for the future?

    Keywords: Business Cycles; Developing Countries and Economies; Management Teams; Leadership; Balanced Scorecard; Strategic Planning; Balance and Stability; Motivation and Incentives; Communication Strategy; Competitive Advantage; Auto Industry; Brazil; Germany;

    Citation:

    Kaplan, Robert S., and Ricardo Reisen de Pinho. "Volkswagen do Brasil: Driving Strategy with the Balanced Scorecard." Harvard Business School Case 111-049, October 2010. (Revised December 2010.) View Details
  6. Elkay Plumbing Products Division

    The vice president of sales learns that the most profitable 1% of the division's customers generate 100% of profits, and that two of the division's largest customers lose 50% of profits. The division has just finished a project to install a time-driven activity-based cost system that traces costs directly to the processes used to produce, sell, and deliver a wide variety of stainless steel sinks to a diverse customer base. Given the division's high variety of products and customers (which includes wholesalers, retailers, contractors, and distributors), the VP of sales wanted a much more accurate cost system so that he could conduct difficult but fact-based negotiations with customers. The case describes the design and implementation of the new cost and profit measurement system. It documents acceptance and decisions made by managers after seeing the enormous dispersion of profits among their products and customers.

    Keywords: Activity Based Costing and Management; Profit; Management Systems; Consumer Products Industry; Industrial Products Industry;

    Citation:

    Kaplan, Robert S. "Elkay Plumbing Products Division." Harvard Business School Case 110-007, September 2009. (Revised October 2010.) View Details
  7. Jet Propulsion Laboratory

    The case, in a non-profit project-oriented setting, introduces fundamental risk management principles and processes that are easily applicable to private sector settings. Gentry Lee, senior systems engineer and de-facto chief risk officer, is applying a new comprehensive risk management system to a $600 million high-profile Mars landing mission. The case illustrates JPL's risk culture for high-visibility and expensive missions in the post-Challenger era with tightly constrained budgets. It introduces risk analytics, such as heat maps, and the management process and governance system centered around continuous challenge and "intellectual confrontation." Students will consider JPL's strategy and constraints, measurable technical risks, non-measurable external risks, and societal pressures in making a decision about whether to launch or delay the Mars mission launch. The case calls for an appreciation of the role of the chief risk officer, and of leadership in general, in risk management.

    Keywords: Budgets and Budgeting; Governance; Leadership; Management Practices and Processes; Management Systems; Risk Management; Projects; Aerospace Industry; United States;

    Citation:

    Kaplan, Robert S., and Anette Mikes. "Jet Propulsion Laboratory." Harvard Business School Case 110-031, February 2010. (Revised May 2010.) View Details
  8. Infosys' Relationship Scorecard: Measuring Transformational Partnerships

    This case analyzes Infosys' innovative approach to measuring performance in client relations. Infosys' strategy is evolving to build transformational partnerships from its original position as an outsourcer of end-to-end IT projects. A transformational partner helps clients to devise and implement strategies that will allow them to achieve a competitive advantage. The traditional paradigm of service-level agreements (SLAs), while sufficient for Infosys' needs early on, is not able to achieve the level of understanding that transformational partnerships require. Infosys applies the principles of the Balanced Scorecard (BSC) to produce a feedback mechanism that allows the partnership to grow to the benefit of both parties.

    Keywords: Partners and Partnerships; Performance Evaluation; Attorney and Client Relationships; Job Cuts and Outsourcing; Balanced Scorecard; Competitive Strategy; Commercialization; Competitive Advantage; Economic Growth; Growth and Development Strategy; Consulting Industry; Information Technology Industry; India;

    Citation:

    Martinez-Jerez, Francisco de Asis, Robert S. Kaplan, and Katherine Miller. "Infosys' Relationship Scorecard: Measuring Transformational Partnerships." Harvard Business School Case 109-006, July 2008. (Revised December 2009.) View Details
  9. Time-Driven Activity-Based Costing

    Introduces the role for time-driven activity-based costing. Identifies the value from an accurate costing model, describes the difficulties of traditional ABC, and illustrates how time-driven ABC provides a simpler and more powerful method.

    Keywords: Activity Based Costing and Management; Management Analysis, Tools, and Techniques; Value;

    Citation:

    Kaplan, Robert S. "Time-Driven Activity-Based Costing." Harvard Business School Background Note 106-068, April 2006. (Revised May 2009.) View Details
  10. Amanco: Developing the Sustainability Scorecard (TN)

    Teaching Note for [inse107038].

    Keywords: Balanced Scorecard; Strategy; Performance; Groups and Teams; Management Systems; Market Entry and Exit; Competition; Social Enterprise; Motivation and Incentives; Goals and Objectives; Manufacturing Industry; Latin America; Brazil;

    Citation:

    Kaplan, Robert S. "Amanco: Developing the Sustainability Scorecard (TN)." Harvard Business School Teaching Note 108-100, June 2008. View Details
  11. Anagene, Inc.

    An entrepreneurial, publicly traded biotech company has begun production and sales of its core product--cartridges that permit DNA samples to be analyzed on a microchip. In the early quarters, sales are difficult to forecast and the company has experienced fluctuating production volumes and unpredictable gross margins, which has upset the board of directors. The finance staff investigates whether to adopt a new costing approach based on capacity. With large amounts of unused capacity, the decision of how to apply capacity costs is critical to the company's management and its reporting strategy with analysts.

    Keywords: Cost Accounting; Financial Reporting; Production; Performance Capacity; Risk and Uncertainty; Genetics; Governing and Advisory Boards; Biotechnology Industry; California;

    Citation:

    Kaplan, Robert S., and Christina L. Darwall. "Anagene, Inc." Harvard Business School Case 102-030, October 2001. (Revised March 2008.) View Details
  12. Borealis

    When Borealis, a European producer of plastics, used a traditional, time-consuming budgeting process, the budget was quickly out of date in a competitive environment characterized by continually changing input and output prices and dynamic market conditions. This case describes the process that led Borealis to replace its budgets with four targeted management tools: rolling financial forecasts, Balanced Scorecard, activity based costing, and investment management. It also discusses the process of implementing the new measurement and control systems.

    Keywords: Activity Based Costing and Management; Budgets and Budgeting; Forecasting and Prediction; Investment; Governance Controls; Balanced Scorecard; Management Systems; Manufacturing Industry; Europe;

    Citation:

    Kaplan, Robert S., and Bjorn N. Jorgensen. "Borealis." Harvard Business School Case 102-048, December 2001. (Revised February 2008.) View Details
  13. Amanco: Developing the Sustainability Scorecard

    Describes the challenges of using the Balanced Scorecard to implement a triple-bottom-line strategy for delivering excellent economic, environmental, and social performance. The owners and senior executive team of Amanco, a producer of plastic pipe and complete water treatment systems, want strong financial returns but are also deeply committed to improving the environment and making a difference in people's lives. Robert Salas, CEO, wants a management system that communicates and motivates Amanco's three high-level goals. Initially, he creates a simple scorecard of measures, but he soon migrates to developing a strategy map and Balanced Scorecard that places economic, environmental, and social objectives as the highest-level objectives. He faces the challenges of cascading the corporate Balanced Scorecard to operating units throughout Latin America and how to develop better measures of social and environmental impact. Salas must also address whether he can sustain Amanco's balanced strategy while entering the Brazilian market, where he faces an entrenched and much larger competitor.

    Keywords: Balanced Scorecard; Measurement and Metrics; Corporate Social Responsibility and Impact; Environmental Sustainability; Social Issues; Strategy; Construction Industry; Industrial Products Industry; Latin America; Brazil;

    Citation:

    Kaplan, Robert S., and Ricardo Reisen de Pinho. "Amanco: Developing the Sustainability Scorecard." Harvard Business School Case 107-038, January 2007. (Revised January 2008.) View Details
  14. Accounting Fraud at WorldCom

    The principal players in WorldCom's accounting fraud included CFO Scott Sullivan, the General Accounting and Internal Audit departments, external auditor Arthur Andersen, and the board of directors. The case provides sufficient detail to allow for a full discussion of the pressures that lead executives and managers to "cook the books," the boundary between earnings smoothing or management and fraudulent reporting, the role for internal control systems and internal audit to prevent or rapidly detect accounting fraud, the expectations about governance processes performed by external auditors and the board of directors, and the pressure and consequences when middle managers follow orders that they know are wrong. Written from the public record, the case contains numerous quotes from an individual involved in the WorldCom fraud that were reported by the Investigative Committee and Wall Street Journal articles about several of the individuals caught up in the situation.

    Keywords: Governance Controls; Governing and Advisory Boards; Crime and Corruption; Ethics; Financial Reporting; Organizational Culture; Corporate Governance; Accounting Audits;

    Citation:

    Kaplan, Robert S., and David Kiron. "Accounting Fraud at WorldCom." Harvard Business School Case 104-071, April 2004. (Revised September 2007.) View Details
  15. Fulton County School System: Implementing the Balanced Scorecard

    Illustrates the adaptation and implementation of a private sector management tool, the Balanced Scorecard, to a public school district. As part of a continuous improvement initiative, the Director of Planning and Policy facilitates the development of a strategy map and scorecard for the district. She then helps cascade the scoreboard down to individual school scorecards, and up to the school board, where it is used to monitor and guide the district's accomplishments. The implementation, however, hits some problems when the superintendent resigns, followed by high turnover among his replacements. Enables a discussion of the role of centralization versus decentralization in setting school objectives and accountability, issues that arise when introducing performance management into public school districts, and the role for leadership and governance in driving improvements in school achievement.

    Keywords: Education; Governance; Leadership; Balanced Scorecard; Performance Improvement; Strategy; Education Industry;

    Citation:

    Kaplan, Robert S., and Monica Nah Lee. "Fulton County School System: Implementing the Balanced Scorecard." Harvard Business School Case 107-029, January 2007. (Revised August 2007.) View Details
  16. Sippican Corporation (A)

    Presents a time-driven version of the Wilkerson Co. activity-based costing case (101092). Faced with declining profits, Sippican Corp. is struggling to understand why it is encountering severe price competition on one product line. The controller collects data that will enable development of a time-driven, activity-based cost model to explain better the different demands of each product line on Sippican's indirect and support resources. Illustrates a powerful connection between strategic planning and operational budgeting.

    Keywords: History; Business Model; Strategic Planning; Cost Accounting; Motivation and Incentives; Resource Allocation; Activity Based Costing and Management; Profit; Business Strategy; Budgets and Budgeting;

    Citation:

    Kaplan, Robert S. "Sippican Corporation (A)." Harvard Business School Case 106-058, February 2006. (Revised September 2006.) View Details
  17. Kemps LLC: Introducing Time-Driven ABC

    Kemps is making a strategy shift: from being focused on fulfilling customer requests to becoming the best cost dairy producer in the industry. Its existing manufacturing cost system, however, fails to capture the costs associated with handling special flavors, small production orders, and complex delivery and order processing options. The company introduces a new system--time-driven, activity-based costing--that captures the full complexity of its operations and gives managers new insights into the profitability of orders, products, and customers. The time equations feature simply and accurately represents the cost impact of all possible options from a particular production order. Managers use the information to enhance process efficiencies, negotiate new terms with customers, and attempt to win new business. The company now faces some crucial decisions about how to forge new relationships with key customers.

    Keywords: Activity Based Costing and Management; Customer Relationship Management; Cost Accounting; Managerial Roles; Cost Management; Earnings Management; Business Strategy; Time Management; Growth and Development Strategy; Management Teams; Decisions; Food and Beverage Industry;

    Citation:

    Kaplan, Robert S. "Kemps LLC: Introducing Time-Driven ABC." Harvard Business School Case 106-001, August 2005. (Revised April 2006.) View Details
  18. Activity-Based Costing and Capacity

    Discusses the use of budgeted rather than historical data in an activity-based costing (ABC) model and argues for calculating rates using practical capacity, not actual utilization. An ABC model need not be limited to analysis of historical data. When cost driver rates are calculated based on forecasted data, they can be used proactively for decisions such as pricing and order acceptance. Second, to avoid distortion of cost driver rates caused by unused capacity, the rates should be calculated using the practical capacity of the resources performing the activity. Discusses how to estimate practical capacity in various situations, including lumpy capacity acquisition, ramp-up of capacity utilization, seasonal and peak-load capacity, and differing service quality levels from supplied capacity.

    Keywords: Activity Based Costing and Management; Accounting Industry;

    Citation:

    Kaplan, Robert S. "Activity-Based Costing and Capacity." Harvard Business School Background Note 105-059, March 2005. (Revised March 2006.) View Details
  19. Domestic Auto Parts

    Describes a meeting of an executive team to discuss strategy for a company turnaround. The exercise is to construct a strategy map and Balanced Scorecard to capture the new strategy.

    Keywords: Balanced Scorecard; Strategy; Business Strategy;

    Citation:

    Kaplan, Robert S. "Domestic Auto Parts." Harvard Business School Case 105-078, June 2005. (Revised March 2006.) View Details
  20. Accounting at MacCloud Winery

    Uses a fictional new winery to introduce accounting concepts and practices such as assets, liabilities, expenses, the matching principle, and contingent activities. Designed to approach the subject at a conceptual level, allowing class discussion to focus on the underlying thought process regarding accounting, rather than on "proper" numerical calculations.

    Keywords: Financial Reporting; Theory; Accounting;

    Citation:

    Hawkins, David F., Robert S. Kaplan, and Gregory S. Miller. "Accounting at MacCloud Winery." Harvard Business School Case 105-081, June 2005. (Revised September 2005.) View Details
  21. First Commonwealth Financial Corporation

    First Commonwealth Financial Corp., a financial institution in central and southwestern Pennsylvania, implemented the Balanced Scorecard for describing and implementing its new customer-focused strategy. Its founder and chairman decided that the Balanced Scorecard also should become the primary information input for the corporate governance process with the board of directors so that the board could become more knowledgeable about and more actively involved in the company's strategy. Describes how the board became knowledgeable about the company's Balanced Scorecard and how it participated in developing a Balanced Scorecard for itself. In addition to the enterprise and board scorecards, the company also developed scorecards for each senior executive for the governance and compensation committees to assess and reward senior management performance. Extensive exhibits illustrate the three different scorecards and the reports and supporting documents for these scorecards.

    Keywords: Balanced Scorecard; Corporate Strategy; Customers; Corporate Governance; Governing and Advisory Boards; Customer Relationship Management; Executive Compensation; Financial Services Industry; Banking Industry; Pennsylvania;

    Citation:

    Kaplan, Robert S. "First Commonwealth Financial Corporation." Harvard Business School Case 104-042, November 2003. (Revised August 2005.) View Details
  22. Midwest Office Products

    Presents an easy introduction to time-driven activity-based costing (ABC) that allows students to build a simple ABC model of order profitability. Midwest's time-driven ABC approach is based on two categories of parameter estimates. The first is the cost per hour of employees performing diverse tasks, such as order-entry operators and delivery personnel performing desktop deliveries. The second is the estimated time required for employees to perform each type of task (manual vs. electronic orders, nearby vs. distant deliveries). Students apply the time-driven ABC model to five representative orders to estimate order profitability based on a far more accurate portrayal of the cost of processing and delivering orders. Stimulates a discussion about the actions, such as pricing and process improvements, to enhance the profitability of orders and also how to report and manage the cost of unused capacity. A rewritten version of an earlier case.

    Keywords: Cost; Price; Activity Based Costing and Management; Time Management; Financial Reporting; Profit; Performance Improvement; Order Taking and Fulfillment; Performance Evaluation;

    Citation:

    Kaplan, Robert S. "Midwest Office Products." Harvard Business School Case 104-073, March 2004. (Revised April 2005.) View Details
  23. Dakota Office Products

    The senior management team of Dakota, an office products distributor, is concerned about the company's first loss in history. Explores the role for activity based costing and customer profitability measurement in a distribution company. Dakota's customers are increasingly demanding more specialized services, such as desktop delivery. Also, whereas some customers have switched to electronic ordering, others continue to place their orders manually. Pricing is based on a fixed markup of the cost of the purchased item. The managers feel that the fixed markup may not be compensating them for the higher costs of manual order processing and desktop delivery. The financial manager initiates an effort to estimate the costs of handling the different types of orders so that she can estimate the profitability of individual customers based on their actual order pattern.

    Keywords: Activity Based Costing and Management; Order Taking and Fulfillment; Profit; Distribution; Customers; Distribution Industry;

    Citation:

    Kaplan, Robert S. "Dakota Office Products." Harvard Business School Case 102-021, August 2001. (Revised February 2005.) View Details
  24. Buying Time

    Managers must frequently make decisions involving trade-offs between cash flows to be paid or received at different points in time. Accountants, in turn, must describe transactions that involve the payment and/or receipt of cash far in the future. This interactive tutorial covers the key concepts relating to cash flows taking place in different time periods. Students learn: Why a dollar received or paid in the future is worth less than a dollar today; how to calculate how much less a future dollar is worth, based on an interest rate and how far in the future it is to be received or paid; how to translate a cash flow from any point in time into its present or future value at any other point in time; and how to use annuity tables and Excel functions to simplify some calculations as well as how to solve complex problems using these tools.

    Keywords: Cash Flow; Value; Interest Rates; Financial Statements;

    Citation:

    Kaplan, Robert S. Buying Time. Harvard Business School Tutorial 104-708, January 2005. View Details
  25. Software Associates

    The president of a small consulting firm has just seen his second-quarter profit and loss statement, showing an increase in revenues but a substantial decline in profits. He asks his chief financial officer to explain the results. The CFO works hard to accumulate information to explain the impact of the quantity of billed hours, billing rates, consultant expenses, operating expenses, and the shifting mix of business between the two principal product lines.

    Keywords: Budgets and Budgeting; Cost; Financial Statements; Production; Management Analysis, Tools, and Techniques; Information Technology Industry; Consulting Industry;

    Citation:

    Kaplan, Robert S. "Software Associates." Harvard Business School Case 101-038, October 2000. (Revised March 2004.) View Details
  26. Variance Analysis and Flexible Budgeting

    Facilitates the teaching of cases on variance analysis and flexible budgeting. Uses algebra, diagrams, and numerical examples to illustrate the calculation of price, quantity, and mix variances for revenues and costs, and a flexible budget for analyzing indirect and support costs.

    Keywords: Cost; Price; Mathematical Methods; Revenue; Budgets and Budgeting;

    Citation:

    Kaplan, Robert S. "Variance Analysis and Flexible Budgeting." Harvard Business School Background Note 101-039, October 2000. (Revised March 2004.) View Details
  27. Indianapolis: Activity-Based Costing of City Services (A)

    A new administration in the City of Indianapolis is initially determined to privatize many municipal services. Before taking this action, however, the city managers want to know the current cost of performing these services with the municipal workers. Existing financial systems record how much the city has been spending by functional categories and departments, but contain no information about the cost of providing services. The city establishes a task force to develop activity-based (ABC) estimates of the cost of filling potholes. It shows the information to the municipal workers and allows them to institute new cost-saving procedures so they can submit their own bid in competition with private contractors. This case describes the development of the ABC model and the reaction of the city workers to the newly revealed information.

    Keywords: Cost Management; Public Sector; Activity Based Costing and Management; Service Delivery; Privatization; City; Indianapolis;

    Citation:

    Kaplan, Robert S. "Indianapolis: Activity-Based Costing of City Services (A)." Harvard Business School Case 196-115, February 1996. (Revised November 2003.) View Details
  28. Wilkerson Company

    The president of Wilkerson, faced with declining profits, is struggling to understand why the company is encountering severe price competition on one product line while able to raise prices without competitive response on another product line. The controller proposes that the company develop an activity-based cost model to understand better the different demands that each product line makes on the organization's indirect and support resources. A rewritten version of an earlier case.

    Keywords: Activity Based Costing and Management; Competition; Profit; Product; Consumer Products Industry;

    Citation:

    Kaplan, Robert S. "Wilkerson Company." Harvard Business School Case 101-092, March 2001. (Revised August 2003.) View Details
  29. ABC Pen Factory Tutorial

    To preview this online product, Authorized Faculty can call our customer service department at 1-800-545-7685 or 617-783-7600. Illustrates, via a guided audio tour accompanied by dynamically changing spreadsheets, the role for activity-based cost systems. The numerical example reveals the managerial problems created by a traditional, labor-based, cost system when a company adds variety to its product line. Demonstrates how increased variety leads to increased indirect and support costs that are misallocated by traditional cost systems. A simple activity-based cost system is constructed, dynamically, to capture the cost of setups and inspections and then to assign them more accurately to the specialty products that require more setups and inspections. The revised cost and profit numbers are a surprise to management, but they also provide better guidance for actions to enhance profitability. To order this web-delivered product, call our customer service department at (800) 545-7685 or (617) 783-7600.

    Keywords: Factories, Labs, and Plants;

    Citation:

    Kaplan, Robert S. ABC Pen Factory Tutorial. Harvard Business School Tutorial 103-704, April 2003. View Details
  30. Anagene, Inc. TN

    Teaching Note for (9-102-030).

    Keywords: Entrepreneurship; Public Ownership; Sales; Production; Forecasting and Prediction; Volume; Governing and Advisory Boards; Cost Accounting; Business or Company Management; Financial Reporting; Strategy; Performance Capacity; Biotechnology Industry;

    Citation:

    Kaplan, Robert S. "Anagene, Inc. TN." Harvard Business School Teaching Note 102-078, April 2002. View Details
  31. Liability Problems

    This case provides three examples of the recognition and measurement of liabilities. The first focuses on recognizing when employees have rendered services for which future period benefits have been earned, that is, whether unused vacation, sick, and personal days at the end of a year lead to a future obligation for the company. The second focuses on accounting for debt issues at a discount and at a premium--distinguishing between coupon payments, paid in cash each period, and the recognition of interest expense for that period. The third involves an obligation incurred in the current payment for which payment will be delayed ten years. Although the problem is specifically one of deferred compensation, the principle may be generalized to involve recognition of pension and other post-employment benefit expenses.

    Keywords: Cash; Annuities; Interest Rates; Compensation and Benefits; Employees; Wages; Problems and Challenges; Value;

    Citation:

    Kaplan, Robert S. "Liability Problems." Harvard Business School Exercise 102-035, October 2001. View Details
  32. Accounting for Computer Software Development Costs

    Summarizes the debate on accounting for computer software development costs. Provides a historical description of the development of standards on accounting of computer software development costs, both in the United States and internationally. Describes how, after much debate, standard setters gave companies the option to capitalize development costs that meet definitive standards, such as proof of technological feasibility. An exhibit reveals that, despite the requirement in the financial accounting standard to capitalize post-technological development costs, few large software companies in the United States capitalize any of their software development costs.

    Keywords: Accounting; Information Technology Industry; Accounting Industry; United States;

    Citation:

    Kaplan, Robert S., and Tatiana Sandino. "Accounting for Computer Software Development Costs." Harvard Business School Background Note 102-034, September 2001. View Details
  33. Financial Reporting Environment, The

    Provides a framework for understanding the role of financial reporting and various intermediaries as mechanisms for reducing both adverse selection and moral hazard problems in capital markets. Financial reports reduce adverse selection by providing basic information for investors and their agents before they make initial capital resource allocation decisions. Subsequently, after capital is allocated to particular business ventures, financial reports reduce moral hazard between managers and investors by supplying information used in contracting between investors and managers to reduce conflicts of interests. Various institutional mechanisms and information intermediaries monitor and limit the manipulation of reported information by managers and constrain managers' ability to act in their own self-interest, rather than investors' interests. They also improve information production, reduce incentive conflicts, and enable capital markets to function effectively and efficiently, channeling the economy's savings to the most productive opportunities.

    Keywords: Financial Reporting; Financial Statements; Capital Markets; Venture Capital; Corporate Disclosure; Conflict of Interests;

    Citation:

    Healy, Paul M., Amy P. Hutton, Robert S. Kaplan, and Krishna G. Palepu. "Financial Reporting Environment, The." Harvard Business School Background Note 102-029, September 2001. View Details
  34. Wells Fargo Online Financial Services (A)

    Wells Fargo, the industry leader in electronic banking, has implemented a Balanced Scorecard in its online financial services group (OFS) to track and measure performance. The OFS group develops and supports services that allow existing and future banking customers to perform transactions via the Internet. The new division faces rapid change and must invest heavily in new technology and in the development of innovative products and services. OFS was finding it difficult to balance the need for a clearly articulated strategy and measurable objectives with the flexibility required in its dynamic environment. Wells Fargo had a culture that embraced financial metrics. Yet OFS management believed that its business could not be measured and evaluated on the basis of financial metrics alone. For example, the group was not yet profitable, yet it provided a critical component to the bank's long-term strategy. The OFS group believed that the Balanced Scorecard would allow them to develop a set of integrated, multidimensional measures to assess performance against its goals and to communicate and update its strategy in a rapidly changing environment.

    Keywords: Balanced Scorecard; Internet; Online Technology; Corporate Entrepreneurship; Corporate Strategy; Performance Evaluation; Finance; Change; Situation or Environment; Measurement and Metrics; Financial Institutions; Banks and Banking; Banking Industry; Financial Services Industry;

    Citation:

    Kaplan, Robert S., and Nicole Tempest. "Wells Fargo Online Financial Services (A)." Harvard Business School Case 198-146, June 1998. (Revised August 2001.) View Details
  35. Boston Lyric Opera

    The Boston Lyric Opera was the fastest growing opera company in North America during the 1990s. Having successfully completed a move to a larger facility in 1999, the board and general director recognize the need to develop a formal strategic planning and governance process to guide the company into the future. Board members, senior managers, and artistic leaders use the Balanced Scorecard (BSC) as the focus of a multi-month strategic planning process that develops a strategy map and objectives in the four BSC perspectives for three core strategic themes. This case describes the high-level scorecard development, its cascading down to departments and individuals and the directors' interactions--using the Balanced Scorecard--with the artistic leaders and board of directors.

    Keywords: Balanced Scorecard; Strategic Planning; Arts; Growth and Development Strategy; Governing and Advisory Boards; Fine Arts Industry; Massachusetts;

    Citation:

    Kaplan, Robert S., and Dennis Campbell. "Boston Lyric Opera." Harvard Business School Case 101-111, June 2001. (Revised July 2001.) View Details
  36. Introduction to Activity-Based Costing

    Introduces the fundamental notions of activity-based costing (ABC). Motivates ABC by means of a simple example, a single and a diversified pen factory. Proceeds to show how ABC assigns costs more accurately to products and customers by: 1) identifying the activities being performed by organizational resources; 2) assigning resource costs to the activities; 3) identifying all the products, services, and customers of the organization; and 4) assigning activity costs to these outputs via activity cost drivers. Also covers activity attributes, such as the cost hierarchy, value and non-value added, and business processes, as well as different types of activity cost drivers: transaction, duration, and intensity. Closes with the admonition to balance the benefits from more accurate cost estimates with the cost of developing an appropriate activity-based cost system.

    Keywords: Activity Based Costing and Management;

    Citation:

    Kaplan, Robert S. "Introduction to Activity-Based Costing." Harvard Business School Background Note 197-076, February 1997. (Revised July 2001.) View Details
  37. New Profit Inc.: Governing the Nonprofit Enterprise

    New Profit, Inc. (NPI) is an innovative venture philanthropy fund. Founded by social entrepreneur Venessa Kirsch, NPI intends to raise large donations from individuals who wish to invest in nonprofit enterprises that could have a significant social impact and the capability to grow to scale. NPI searches and identifies such organizations, provides initial funding, monitors their performance, and then provides additional funding to enable them to become high-impact, nationwide organizations. NPI uses the Balanced Scorecard approach for measuring both its own performance and that of its portfolio companies. The Balanced Scorecard provides the language for the performance contract between NPI and its funders and board, and between NPI and its portfolio organizations.

    Keywords: Balanced Scorecard; Nonprofit Organizations; Venture Capital; Social Entrepreneurship; Corporate Governance; Performance Evaluation; Financial Statements; Giving and Philanthropy; Service Industry;

    Citation:

    Kaplan, Robert S. "New Profit Inc.: Governing the Nonprofit Enterprise." Harvard Business School Case 100-052, November 1999. (Revised July 2001.) View Details
  38. Kanthal (A)

    Multinational company needs an improved cost system to determine the profitability of individual customer orders. Its strategy is to have significant sales and profitability growth without adding additional administrative and support people. The new cost system assesses a charge to each customer order received and an additional surcharge if the item ordered is not normally stocked. The goal is to direct sales resources to the most profitable customers: those who buy standard products in large predictable quantities with minimal demands on technical resources.

    Keywords: Cost Accounting; Earnings Management; Cost Management; Financial Management; Multinational Firms and Management; Business or Company Management; Customer Relationship Management; Sales; Business Strategy; Profit; Electronics Industry;

    Citation:

    Kaplan, Robert S. "Kanthal (A)." Harvard Business School Case 190-002, July 1989. (Revised April 2001.) View Details
  39. MiCRUS: Activity-Based Management for Business Turnaround

    MiCRUS is a new company, spun off from IBM as a joint venture between IBM and Cirrus Logic to produce semiconductor wafers at world-class costs for its two parent companies. The senior management team needs to overcome the bureaucratic, internally focused culture that existed when the plant was a captive IBM supplier. They turn to activity-based costing/activity-based management to engender a more entrepreneurial culture where decentralized work teams take responsibility for initiating and accomplishing significant cost reduction projects. This case describes how project teams use activity-based information to identify opportunities and set priorities for cost reduction projects, and then report on progress at open management meetings. The senior managers also introduce an Open Book Management philosophy where financial data is shared with all employees.

    Keywords: Activity Based Costing and Management; Cost Management; Semiconductor Industry;

    Citation:

    Kaplan, Robert S., Jonathan B. Schiff, and Stanley Abraham. "MiCRUS: Activity-Based Management for Business Turnaround." Harvard Business School Case 101-070, March 2001. (Revised April 2001.) View Details
  40. Montefiore Medical Center

    A large urban medical center implements the Balanced Scorecard management tool. Elaine Brennan, senior VP of operations, has reorganized a highly functional health care organization into decentralized patient care centers and support units. Having recently endured the pain of a major downsizing, she wants the various constituents--senior managers, physicians, nurses, technicians, and the work force--to explore implementing a new strategy focused on growth and patient care. But the existing measurement and management system reports only on costs and financial results. She introduces the Balanced Scorecard as a mechanism to increase attention to and accountability for quality, service, work environment, and employee outcomes, as well as revenues and costs.

    Keywords: Balanced Scorecard; Health Care and Treatment; Management Systems; Organizational Structure; Corporate Strategy; Leadership Development; Growth and Development Strategy; Financial Reporting; Budgets and Budgeting; Cost Accounting; Corporate Accountability; Communication; Health Industry;

    Citation:

    Kaplan, Robert S., and Syeda Noorein Inamdar. "Montefiore Medical Center." Harvard Business School Case 101-067, March 2001. (Revised April 2001.) View Details
  41. Microsoft Latin America

    Mauricio Santillan, regional vice president for the Latin American division of Microsoft, has introduced a new performance measurement system to help his country managers formulate and control strategy. Microsoft Latin America's priorities are rolling out of an entirely new corporate database software package and devising a strategy to combat software piracy. Santillan uses the measurement system to motivate country managers to establish locally-relevant strategies that will be aligned with the region's global priorities. This case shows how a Balanced Scorecard system can be useful to help managers in emerging markets learn about the importance of strategy and become better general managers. Also illustrates that a strategic measurement system can be implemented even in an environment where reliable data may be difficult to acquire.

    Keywords: Balanced Scorecard; Software; Emerging Markets; Crime and Corruption; Motivation and Incentives; Management Skills; Global Strategy; Strategy; Information Technology Industry; Latin America;

    Citation:

    Kaplan, Robert S., Alberto Ballve, and Antonio Davila. "Microsoft Latin America." Harvard Business School Case 100-040, February 2000. (Revised August 2000.) View Details
  42. Transfer Pricing

    Discusses use of market prices, negotiated prices, variable costs, dual rate, and full costs for transfer prices.

    Keywords: Fair Value Accounting; Cost Accounting; Price; Price Bubble; Negotiation; Cost Management; Cost of Capital; Financial Markets; Strategic Planning; Accounting Industry;

    Citation:

    Kaplan, Robert S. "Transfer Pricing." Harvard Business School Background Note 100-099, March 2000. View Details
  43. Assigning Support Department Expenses to Production Cost Centers (A)

    Describes the first stage of the two-stage cost assignment process from support/service departments to production cost centers.

    Keywords: Cost;

    Citation:

    Kaplan, Robert S. "Assigning Support Department Expenses to Production Cost Centers (A)." Harvard Business School Background Note 197-046, December 1996. (Revised February 2000.) View Details
  44. Recognizing Revenues and Expenses: Realized and Earned

    Describes a key concept in financial accounting: choosing an appropriate revenue recognition point. The accrual process requires revenue recognition and expense matching for reporting on the value creation process of companies. Describes the two key criteria for revenue recognition--realized and earned--and the conditions that must be met to satisfy these criteria. The use of the typical recognition point, when the product or service is delivered to the customer, is discussed as well as situations (e.g., the percentage of competition method) when revenue can be recognized before actual delivery. A rewritten version of an earlier note.

    Keywords: Accounting Audits; Accrual Accounting; Cost Accounting; Budgets and Budgeting; Revenue; Profit; Cost Management; Value Creation; Competitive Strategy; Financial Statements; Accounting Industry;

    Citation:

    Kaplan, Robert S. "Recognizing Revenues and Expenses: Realized and Earned." Harvard Business School Background Note 100-050, November 1999. View Details
  45. Mobil USM&R (A): Linking the Balanced Scorecard

    The CEO of the marketing and refining division of a major oil company is in the midst of implementing a profit turnaround. He transforms the strongly centralized, functionally-organized division into 17 independent business units and 14 internal service companies. The division also launches a new, market-segmented strategy aimed at high-end buyers. The CEO recognizes, however, that the new organization and strategy require a new measurement system. He turns to the Balanced Scorecard (BSC) because of its ability to link measurement to strategy, and to help the new profit-center managers develop customized strategies for their local responsibilities. The case describes the development of the initial divisional BSC, the linkage of the divisional BSC to independent business unit and internal service company BSCs, and linkage of the BSC to managers' compensation. Concludes with the senior executives reflecting on how they are using the BSC in their management processes.

    Keywords: Organizational Change and Adaptation; Measurement and Metrics; Management Practices and Processes; Organizational Design; Balanced Scorecard; Corporate Strategy; Mining Industry; Energy Industry;

    Citation:

    Kaplan, Robert S. "Mobil USM&R (A): Linking the Balanced Scorecard." Harvard Business School Case 197-025, September 1996. (Revised September 1999.) View Details
  46. Committed and Flexible Resources

    Stresses the difference between costs committed in advance of knowing actual demand (committed costs) and cost incurred proportional to demand. Committed costs appear fixed since their supply is independent of the amount actually used. Flexible resources are supplied as needed, so their costs appear to be variable with demand. Shows how committed costs can be reduced via a two-step procedure: 1) reduce the demand for the activities performed by these committed resources, thereby creating unused capacity; and 2) manage the excess capacity of committed resources--either by reducing their supply or by deploying these resources to alternative and more profitable uses.

    Keywords: Cost;

    Citation:

    Kaplan, Robert S. "Committed and Flexible Resources." Harvard Business School Background Note 197-078, February 1997. (Revised June 1999.) View Details
  47. Using Activity-Based Costing with Budgeted Expenses and Practical Capacity

    Describes how activity-based costing (ABC) should be applied with: 1) budgeted, not historical, expenses and 2) assigning the costs of capacity resources.

    Keywords: Cost Accounting; Activity Based Costing and Management; Budgets and Budgeting;

    Citation:

    Kaplan, Robert S. "Using Activity-Based Costing with Budgeted Expenses and Practical Capacity." Harvard Business School Background Note 197-083, March 1997. (Revised June 1999.) View Details
  48. Chemical Bank: Implementing the Balanced Scorecard

    The retail bank division of Chemical Bank faces declining margins and increased competition in its credit and deposit gathering and processing business. It wishes to implement a new strategy to become a preferred financial service provider to target customer groups. The division adapts the balanced scorecard to clarify and communicate the new strategy and to identify the key drivers for strategic success. The case describes the development of strategic objectives and measures for four perspectives: financial, customer, internal, and learning growth, and the process for implementing the new measurement and management system.

    Keywords: Balanced Scorecard; Adoption; Growth and Development Strategy; Communication Strategy; Customer Relationship Management; Management Systems; Performance Evaluation; Banks and Banking; Measurement and Metrics; Banking Industry;

    Citation:

    Kaplan, Robert S., and Norman Klein. "Chemical Bank: Implementing the Balanced Scorecard." Harvard Business School Case 195-210, February 1995. (Revised June 1999.) View Details
  49. United Way of Southeastern New England (UWSENE)

    A regional United Way organization, a nonprofit already active in total quality management, implements a Balanced Scorecard to link its strategic planning objectives with day-to-day operations, and is able to translate its vision and strategy into objectives and measures in four perspectives: financial, customer (donor), internal processes, and learning and growth (employees and system). In addition to the Balanced Scorecard's role in setting objectives and priorities for the nonprofit's employees, the case raises the issue of whether and how the nonprofit's board should be involved with developing and using the Balanced Scorecard.

    Keywords: Balanced Scorecard; Nonprofit Organizations; Governing and Advisory Boards; Strategy; United States;

    Citation:

    Kaplan, Robert S., and Ellen L. Kaplan / RA. "United Way of Southeastern New England (UWSENE)." Harvard Business School Case 197-036, November 1996. (Revised April 1999.) View Details
  50. Metabo GmbH & Co. KG

    A privately owned German power tool company was dissatisfied with its existing cost system. The system could not produce timely accurate reports on cost center operations, and newly purchased automated machines were attracting large overhead costs. A new, highly automated system was designed and installed that used 600 cost centers and an appropriate activity base chosen for each center. The case shows the design of a highly accurate cost control system with flexible budgets used in both support and production cost centers.

    Keywords: Activity Based Costing and Management; Cost; Budgets and Budgeting; Capital Budgeting; Cost Management; Reports; Private Ownership; Business or Company Management; Consumer Products Industry; Germany;

    Citation:

    Kaplan, Robert S. "Metabo GmbH & Co. KG." Harvard Business School Case 189-146, March 1989. (Revised March 1999.) View Details
  51. City of Charlotte (B)

    This case shows how two operating departments-transportation and police-translate the high-level corporate scorecard for the city into departmental balanced scorecards. The transportation department follows a highly structured approach designed to link initiatives taken at the departmental and local levels to the accomplishment of high-level strategic objectives. The police department uses the scorecard to enact a complete change in culture, focusing the police department on crime prevention and community building and away from its previous emphasis on dealing with crimes after they occur. This demonstrates the two very different approaches for refining the scorecard accomodate to local operating departments.

    Keywords: Crime and Corruption; Global Strategy; National Security; Balanced Scorecard; Organizational Design; Technology Adoption; Public Administration Industry; Transportation Industry;

    Citation:

    Kaplan, Robert S. "City of Charlotte (B)." Harvard Business School Case 199-043, March 1999. View Details
  52. City of Charlotte (A)

    The city manager's office in Charlotte, North Carolina, is attempting to align and focus the city's programs and operating departments. City managers, working collaboratively with the elected mayor and city council, have identified five strategic themes to make Charlotte the number one city in which to live and work. The themes are community safety, transportation, strong neighborhoods, economic development, and cost-effective government. The city managers, however, find it difficult to get the individual city operating departments to orient their efforts to these five strategic themes. They use the four perspectives of the Balanced Scorecard to develop objectives for the five strategic themes. Once developed, each operating department then has been asked to develop departmental balanced scorecards to communicate and focus their local objectives toward accomplishing the city's strategic priorities. The case describes the development and use of the balanced scorecard as a strategic management system.

    Keywords: Balanced Scorecard; Government Administration; City; Growth and Development Strategy; Adoption; Public Sector; Management Teams; Programs; Performance Evaluation; Motivation and Incentives; Public Administration Industry; North Carolina;

    Citation:

    Kaplan, Robert S. "City of Charlotte (A)." Harvard Business School Case 199-036, December 1998. (Revised February 1999.) View Details
  53. Wells Fargo Online Financial Services (B)

    Describes how the Balanced Scorecard built by the Online Financial Services (OFS) group is used to select the highest-priority initiatives for the organization. Currently, initiatives arise continually throughout the organization, and management spends considerable time reviewing, approving, and, often , canceling initiatives. OFS develops a ranking procedure, based on the Balanced Scorecard, to align initiatives with the group's strategy. Currently 11 proposals have made it through the first two screening processes. Students evaluate these proposals according to the strategic themes described in the Balanced Scorecard plus supplementary criteria developed by senior managers.

    Keywords: Balanced Scorecard; Internet; Online Technology; Corporate Entrepreneurship; Corporate Strategy; Performance Evaluation; Finance; Change; Situation or Environment; Measurement and Metrics; Financial Institutions; Banks and Banking; Financial Services Industry; Banking Industry;

    Citation:

    Kaplan, Robert S., and Nicole Tempest. "Wells Fargo Online Financial Services (B)." Harvard Business School Case 199-019, August 1998. (Revised December 1998.) View Details
  54. John Deere Component Works (A)

    The division has recognized the inadequacies of its existing, traditional cost system for estimating product costs. Describes the innovative activity-based system that was developed to more accurately trace overhead costs to individual products. Provides students with the opportunity to critique a standard cost system and to assess the characteristics of the proposed system that traces costs to production activities.

    Keywords: Activity Based Costing and Management; Cost Accounting; Cost Management; Cost vs Benefits; Production; Budgets and Budgeting; Innovation and Invention; Innovation and Management; Consumer Products Industry;

    Citation:

    Kaplan, Robert S. "John Deere Component Works (A)." Harvard Business School Case 187-107, May 1987. (Revised November 1998.) View Details
  55. Maxwell Appliance Controls

    A profitable manufacturing division of a large company is looking for new ways to identify sources of productivity improvements. Led by its senior finance officer, an activity-based cost system is developed to identify activities performed for its highly varied product line and diverse customers. The activity-based cost system is supposed to support the division's quality, employee teamwork, and continuous improvement activities that attempt to identify wasteful or non-value-added work practices. Senior operating executives, however, are not sure how the information should be applied for these efforts. The case provides an extensive description of activities and activity drivers developed by the cost system's designers, and also contains an extensive description of the development and design process. Can be used as a comprehensive review on the design of activity-based cost systems, and to generate a discussion on the difficulties of getting a traditional organization to internalize the messages from the ABC information.

    Keywords: Activity Based Costing and Management; Management Teams; Quality; Performance Improvement; Organizational Culture; Problems and Challenges; Production; Manufacturing Industry;

    Citation:

    Kaplan, Robert S. "Maxwell Appliance Controls." Harvard Business School Case 192-058, October 1991. (Revised September 1998.) View Details
  56. Classic Pen Company, The: Developing an ABC Model

    Classic Pen has diversified from its core blue and black pen business by introducing new specialized colors. But costs have risen and margins on blue and black pens are decreasing. The controller turns to activity-based costing (ABC) for an explanation.

    Keywords: Activity Based Costing and Management; Manufacturing Industry;

    Citation:

    Kaplan, Robert S. "Classic Pen Company, The: Developing an ABC Model." Harvard Business School Case 198-117, April 1998. (Revised September 1998.) View Details
  57. Mobil USM&R (A1)

    First of a two-part case on the development and use of a Balanced Scorecard (BSC) at Mobil's US Marketing and Refining Division. Split from the original (A) case to give students an opportunity to suggest objectives and measures for the division's initial BSC, without seeing the actual choices made by Mobil's managers. Describes how the CEO of the marketing and refining division of a major oil company is in the midst of implementing a profit turnaround. He has transformed a strongly centralized, functionally-organized division into 17 independent business units and 14 internal service companies. The division has also launched a new, market-segmented strategy aimed at high-end buyers. The CEO recognizes, however, that the new organization and strategy require a new measurement system. He turns to the BSC because of its ability to link measurement to strategy, and to help the new profit-center managers develop customized strategies for their local responsibilities. This case describes the development process of the initial divisional BSC, and the formulation of objectives and measures for the financial and learning and growth perspectives.

    Keywords: Balanced Scorecard; Measurement and Metrics; Restructuring; Corporate Strategy; Organizational Change and Adaptation; Growth and Development Strategy; Management Teams; Marketing Strategy; Motivation and Incentives; Mining Industry; Energy Industry; United States;

    Citation:

    Kaplan, Robert S. "Mobil USM&R (A1)." Harvard Business School Case 197-120, June 1997. (Revised May 1998.) View Details
  58. Mobil USM&R (A2)

    Second of a two-part case on the development and use of a Balanced Scorecard (BSC) at Mobil's US Marketing and Refining Division. This case describes the completed BSC, and how this was linked to the BSCs of the independent business units and the internal service organizations. Also describes the linkage of the BSC to managers' compensation through a new variable-pay plan. Concludes with the senior executives reflecting on how they are using the BSC in their management reviews. Focuses on the management processes surrounding the use of BSC. May be taught with Mobil USM&R (B): New England Sales and Distribution, (C): Lubricants Business Unit, and (D): Gasoline Marketing, which describe the development and use of BSCs in two independent business units and one staff department.

    Keywords: Balanced Scorecard; Performance Evaluation; Management Teams; Management Practices and Processes; Executive Compensation; Motivation and Incentives; Corporate Strategy; Energy Industry; Mining Industry; United States;

    Citation:

    Kaplan, Robert S. "Mobil USM&R (A2)." Harvard Business School Case 197-121, June 1997. (Revised May 1998.) View Details
  59. Mobil USM&R (B): New England Sales and Distribution

    The general manager of a local gasoline/distillate sales and distribution business unit must communicate a new strategy to the unit's 300 employees. An initial strategic planning exercise identified a high-priority list of opportunities that blended the parent division's national strategy with a customized, local strategy. But for the new strategy to be effective, the old measurement system, which stressed only sales volume and cost reduction, had to be replaced. The manager led the development of a local Balanced Scorecard (BSC), derived from the division scorecard (described in the (A) case). To communicate the critical features of the local BSC, the unit's senior managers established a Super Bowl competition in which all employees were challenged to achieve stretch targets on five BSC measures. This case describes the communication and management processes for the Super Bowl measures.

    Keywords: Balanced Scorecard; Adoption; Strategic Planning; Customization and Personalization; Management Practices and Processes; Growth and Development Strategy; Measurement and Metrics; Motivation and Incentives; Performance Evaluation; Energy Industry; Mining Industry; United States;

    Citation:

    Kaplan, Robert S. "Mobil USM&R (B): New England Sales and Distribution." Harvard Business School Case 197-026, September 1996. (Revised April 1998.) View Details
  60. Mobil USM&R (D): Gasoline Marketing

    Mobil US Marketing & Refining has shifted from a centralized staff-driven organization to decentralized business-units. Staff functions now must negotiate service agreements with a buyer's committee consisting of representatives from the profit-center business units. This case describes how one staff function developed its service agreement and translated the agreement into a Balanced Scorecard where the "customers" are the internal business units. Several managers question whether the Balanced Scorecard is appropriate for such an internal function.

    Keywords: Balanced Scorecard; Management Teams; Human Resources; Agreements and Arrangements; Organizational Change and Adaptation; Customers; Situation or Environment; Business Units; Energy Industry; Mining Industry; United States;

    Citation:

    Kaplan, Robert S. "Mobil USM&R (D): Gasoline Marketing." Harvard Business School Case 197-028, October 1996. (Revised April 1998.) View Details
  61. AT&T Paradyne

    A company making data communication devices has adopted a Total Quality philosophy for working with suppliers, employees, and customers. The finance group finds its existing cost system has become obsolete because of a shift from manual to automatic production technologies. As part of its improvement activities, the group develops an activity-based costing system to replace the obsolete standard costing system. The new system is being used to value inventory for financial reporting, provide monthly feedback on operational efficiencies, and inform product managers about the cost and profitability of their products. It is also being used for target costing, influencing decisions made by product design and development engineers so that future generations of products can be produced at lower cost. The case enables discussion about how well a single system functions for these diverse roles, and to compare this company's target costing approach with those used by Japanese companies, such as Nissan, Komatsu, and Olympus.

    Keywords: Decisions; Product; Corporate Accountability; Activity Based Costing and Management; System; Performance Efficiency; Financial Reporting; Operations; Technology Industry; Telecommunications Industry;

    Citation:

    Kaplan, Robert S. "AT&T Paradyne." Harvard Business School Case 195-165, May 1995. (Revised April 1998.) View Details
  62. Siemens Electric Motor Works (A) (Abridged)

    Explores how a cost system can help support a firm's decision to change strategies. In the process, the students are introduced to a simple activity-based cost system. Siemens Electric Motor Works found itself facing an increasingly competitive environment and so made a decision to move from mass production of specialty motors to the production of small lots of custom motors. In doing so, they found their old cost system led them to poor decision making. By switching to a simple activity-based system, more accurate product costs were computed, facilitating better divisional performance.

    Keywords: Activity Based Costing and Management; Cost Accounting; Cost; Adoption; Cost vs Benefits; Management Analysis, Tools, and Techniques; Production; Business Strategy; Electronics Industry; Manufacturing Industry;

    Citation:

    Kaplan, Robert S. "Siemens Electric Motor Works (A) (Abridged)." Harvard Business School Case 191-006, July 1990. (Revised October 1997.) View Details
  63. Mobil USM&R (C): Lubricants Business Unit

    The general manager of a Lubricants Business Unit in Mobil's U.S. Marketing and Refining division launched a project to develop a Balanced Scorecard (BSC) for his unit. The purpose was to provide focus for all employees of the unit, enabling it to operate on an integrated basis. After the unit's scorecard had been developed, the general manager challenged the project team to extend the effort out to every employee in the business unit. The team started by constructing a cause-and-effect tree that linked high-level business unit objectives down to positions or tasks for every individual. The team then visited all locations, using the cause-and-effect tree to link the unit's strategy and scorecard to individuals' responsibilities. This case describes the construction of individual BSCs and their impact on employee behavior.

    Keywords: Balanced Scorecard; Employees; Customization and Personalization; Performance Evaluation; Measurement and Metrics; Management Teams; Projects; Energy Industry; Mining Industry; United States;

    Citation:

    Kaplan, Robert S. "Mobil USM&R (C): Lubricants Business Unit." Harvard Business School Case 197-027, September 1996. (Revised May 1997.) View Details
  64. Peoria Engine Plant (A): (Abridged)

    Describes the cost control system used at an automobile engine plant for labor and overhead costs. The finance staff prepares daily, weekly, and monthly variance reports against budgets. Department supervisors, finance staff, and the plant manager discuss the use and interpretation of these reports. Also describes the company's budgeting procedures, which include a performance improvement factor to motivate annual productivity gains and cost reductions. Allows the class to discuss whether the extensive and detailed variance analysis systems promote valuable managerial objectives such as cost control, learning, and improvement. A big issue is whether an emphasis on meeting short-run budgets inhibits longer-term improvements in quality and productivity.

    Keywords: Motivation and Incentives; Cost Management; Financial Reporting; Performance Improvement; Budgets and Budgeting; Auto Industry;

    Citation:

    Kaplan, Robert S., and Amy P. Hutton. "Peoria Engine Plant (A): (Abridged)." Harvard Business School Case 197-099, April 1997. View Details
  65. Romeo Engine Plant (Abridged)

    A newly reopened automobile engine plant has been organized along total quality and teamwork principles. Employees now solve problems and ensure quality, rather than watch parts being produced. New operating and financial systems have been installed to promote continuous improvement, waste elimination, and cost reduction activities.

    Keywords: Cost Accounting; Cost Management; Groups and Teams; Employees; Performance Improvement; Auto Industry;

    Citation:

    Kaplan, Robert S., and Amy P. Hutton. "Romeo Engine Plant (Abridged)." Harvard Business School Case 197-100, April 1997. View Details
  66. Co-operative Bank, The

    A British bank with strong roots in the cooperative movement encounters declining profitability in an increasingly competitive and deregulated financial services industry. It attempts to grow by broadening its customer base and increasing the range of products and services offered. It turns to activity-based costing as part of its reengineering effort to learn more about the process and product costs and customer profitability, and contemplates what actions to take based on this new information.

    Keywords: Product; Competition; Expansion; Cost Management; Activity Based Costing and Management; Profit; Banking Industry; Financial Services Industry;

    Citation:

    Kaplan, Robert S., and Srikant M. Datar. "Co-operative Bank, The." Harvard Business School Case 195-196, March 1995. (Revised April 1997.) View Details
  67. Using ABC to Manage Customer Mix and Relationships

    Describes applying activity-based costing to manage customer relationships. Links cost-to-serve to net margins earned with individual customers.

    Keywords: Customer Relationship Management; Activity Based Costing and Management;

    Citation:

    Kaplan, Robert S. "Using ABC to Manage Customer Mix and Relationships." Harvard Business School Background Note 197-094, April 1997. View Details
  68. Romeo Engine Plant

    A newly reopened automobile engine plant has been organized along total quality and teamwork principles. Employees now is to solve problems and ensure quality, rather than watch parts being produced. New operating and financial systems have been installed to promote continuous improvement, waste elimination, and cost reduction activities.

    Keywords: Organizational Change and Adaptation; Motivation and Incentives; Management Practices and Processes; Groups and Teams; Performance Efficiency; Performance Improvement; Manufacturing Industry; Auto Industry;

    Citation:

    Hutton, Amy P., and Robert S. Kaplan. "Romeo Engine Plant." Harvard Business School Case 194-032, November 1993. (Revised March 1997.) View Details
  69. Peoria Engine Plant (A)

    Describes the cost control system used at an automobile engine plant for labor and overhead costs. The finance staff prepares daily, weekly, and monthly variance reports against budgets. Department supervisors, finance staff, and the plant manager discuss the use and interpretation of these reports. Also describes the company's budgeting procedures which include a performance improvement factor to motivate annual productivity gains and cost reductions. Allows the class to discuss whether the extensive and detailed variance analysis systems promote valuable managerial objectives such as cost control, learning, and improvement. A big issue is whether an emphasis on meeting short-run budgets inhibits longer-term improvements in quality and productivity.

    Keywords: Cost Management; Cost Accounting; Budgets and Budgeting; Earnings Management; Reports; Financial Reporting; Management Analysis, Tools, and Techniques; Performance Improvement; Performance Productivity; Factories, Labs, and Plants; Auto Industry;

    Citation:

    Kaplan, Robert S., and Amy P. Hutton. "Peoria Engine Plant (A)." Harvard Business School Case 193-082, December 1992. (Revised March 1997.) View Details
  70. Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets

    Describes the use of flexible budgets to assign support/service department costs to production cost centers.

    Keywords: Cost; Financial Strategy; Budgets and Budgeting;

    Citation:

    Kaplan, Robert S. "Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets." Harvard Business School Background Note 197-048, January 1997. View Details
  71. Rabobank Nederland

    Describes the account manager's role and the history of one credit application. The purpose is to evaluate various methods the bank uses to influence account managers' behaviors. Also describes some alternatives being considered to improve the information systems used to control the account management side of the branch. A rewritten version of earlier cases.

    Keywords: Financial Management; Managerial Roles; Accounting; Information Management; Banks and Banking; Power and Influence; Banking Industry; Netherlands;

    Citation:

    Merchant, Kenneth A., and Robert S. Kaplan. "Rabobank Nederland." Harvard Business School Case 196-119, January 1996. (Revised July 1996.) View Details
  72. Activity-Based Management at Stream International

    Stream International's Crawfordsville, Indiana facilities undertake the design and implementation of an activity-based costing project. After analyzing the costs assigned to 161 work activities, Crawfordsville managers present five proposals for change based on ABM results, then meet to decide which to implement.

    Keywords: Organizational Change and Adaptation; Change Management; Activity Based Costing and Management; Indiana;

    Citation:

    Kaplan, Robert S., and Norman Klein. "Activity-Based Management at Stream International." Harvard Business School Case 196-134, April 1996. (Revised April 1996.) View Details
  73. Chadwick, Inc.: The Balanced Scorecard (Abridged)

    The pharmaceutical division of a diversified company has been asked to develop a Balanced Scorecard. Research and development projects take about ten years to bring a new product to the marketplace and the division depends on good relations and active feedback from its customers for continued success. But currently, the division is evaluated by meeting monthly financial objectives. This case describes an early and less-than-successful attempt to develop a Balanced Scorecard encompassing financial, customer, internal process, and innovation perspectives.

    Keywords: Balanced Scorecard; Research and Development; Product Launch; Commercialization; Consumer Behavior; Customer Focus and Relationships; Performance Evaluation; Pharmaceutical Industry;

    Citation:

    Kaplan, Robert S. "Chadwick, Inc.: The Balanced Scorecard (Abridged)." Harvard Business School Case 196-124, February 1996. View Details
  74. Pillsbury: Customer Driven Reengineering

    Pillsbury is transforming itself from an integrated producer of flour and bakery products to a value-added supplier of premium branded products. After initial successes applying activity-based costing to manufacturing operations, two senior executives decide to collaborate to propose a major reengineering project across the company's entire value chain. The case describes the project's definition and scope to yield projected annual cost savings and margin improvement between $100 and $300 million.

    Keywords: Organizational Change and Adaptation; Production; Cost Management; Activity Based Costing and Management; Customer Value and Value Chain; Food and Beverage Industry;

    Citation:

    Kaplan, Robert S. "Pillsbury: Customer Driven Reengineering." Harvard Business School Case 195-144, April 1995. (Revised April 1995.) View Details
  75. Cost System Analysis

    Describes six characteristics of cost systems: standard vs. actual costs; job-order vs. process costing; variable vs. full costs; disaggregate vs. aggregate cost accumulation; and specific vs. average rates for labor and overhead. A rewritten version of an earlier case.

    Keywords: Cost; Analysis; System;

    Citation:

    Kaplan, Robert S. "Cost System Analysis." Harvard Business School Background Note 195-181, December 1994. View Details
  76. Cott Corp.: Private Label in the 1990s

    Private label cola, Cott, gets 30% of the market in Canada. How does it move into the U.S. market? How do retailers evaluate its benefit costs? Does Cott use an existing structure or build new ones? Does Cott diversify from drink to snack foods?

    Keywords: Private Sector; Cost Management; Labels; Growth and Development Strategy; Market Entry and Exit; Industry Structures; Diversification; Food and Beverage Industry;

    Citation:

    Goldberg, Ray A., and Robert S. Kaplan. "Cott Corp.: Private Label in the 1990s." Harvard Business School Case 594-031, September 1993. (Revised December 1993.) View Details
  77. The Private Label Movement

    Private labels, previously weak in the U.S. market, are making inroads in the United States and Canada. Reasons for this include a weak economy, better quality of private label goods, and a desire by retailers to increase profitability.

    Keywords: Brands and Branding; Retail Industry; United States; Canada;

    Citation:

    Kaplan, Robert S., and Ray A. Goldberg. "The Private Label Movement." Harvard Business School Background Note 594-039, September 1993. View Details
  78. Kanthal (B)

    Describes actions taken by senior management of Kanthal after seeing the results of the newly installed account management system. Designed as a class handout. A rewritten version of an earlier case by the same author.

    Keywords: Accounting; Management Systems; Management Teams;

    Citation:

    Kaplan, Robert S. "Kanthal (B)." Harvard Business School Supplement 190-003, July 1989. (Revised August 1993.) View Details
  79. Texas Eastman Co.

    The company as part of a commitment to Total Quality Management has installed a computer system that accumulates 30,000 observations on its processes every 2-4 hours. Operating people have found the monthly summaries of financial performance not too useful in this environment. Recently a department manager has created a daily income statement for his operators. Case explores role for financial summary information in an environment where extensive, timely data on product processes and products already exist.

    Keywords: Quality; Information Technology; Reports; Business or Company Management;

    Citation:

    Kaplan, Robert S. "Texas Eastman Co." Harvard Business School Case 190-039, October 1989. (Revised June 1993.) View Details
  80. Analog Devices, Inc.: The Half-Life System

    The company has committed to major improvements in quality, cost, and on-time delivery performance. Despite strong senior management support, however, the actual rate of improvement was disappointing until a new measurement philosophy was introduced. The new approach specified expected rates of improvement and compared actual improvements to the expected rate. Operational people preferred the new measures to the monthly financial reports they continued to receive. The case explores the conflicts between financial measurements and operating improvements.

    Keywords: Quality; Performance Improvement; Earnings Management; Financial Reporting; Organizational Change and Adaptation; Performance Productivity; Business or Company Management; Cost Management; Measurement and Metrics; Management Teams; Semiconductor Industry;

    Citation:

    Kaplan, Robert S. "Analog Devices, Inc.: The Half-Life System." Harvard Business School Case 190-061, March 1990. (Revised June 1993.) View Details
  81. Porsche AG

    Describes the financial management of the research and development departments of an automobile manufacturer and technology supplier. Existing cost systems measure accurately the costs incurred by department and by project. But little formal information is provided about tasks accomplished. Highlights how traditional cost measurement systems may provide inadequate information to manage research and development projects.

    Keywords: Financial Management; Cost Accounting; Research and Development; Machinery and Machining; Auto Industry; Technology Industry;

    Citation:

    Kaplan, Robert S. "Porsche AG." Harvard Business School Case 193-071, December 1992. (Revised May 1993.) View Details
  82. Chadwick, Inc.: The Balanced Scorecard

    The pharmaceutical division of a diversified company has been asked to develop a Balanced Scorecard. Research and development projects take about ten years to bring a new product to the marketplace and the division depends on good relations and active feedback from its customers for continued success. But currently, the division is evaluated by meeting monthly financial objectives. The case describes an early and less-than-successful attempt to develop a Balanced Scorecard encompassing financial, customer, internal process, and innovation perspectives.

    Keywords: Balanced Scorecard; Performance Evaluation; Customer Relationship Management; Goals and Objectives; Customer Satisfaction; Research and Development; Marketplace Matching; Financial Condition; Product Launch; Pharmaceutical Industry;

    Citation:

    Kaplan, Robert S. "Chadwick, Inc.: The Balanced Scorecard." Harvard Business School Case 193-091, January 1993. (Revised April 1993.) View Details
  83. Burlington Northern: The ARES Decision (A)

    Burlington Northern's decision whether to invest in ARES, an automated train control system, is a ($350 million) strategic investment in information technology. Although set in a service industry (railroad) the issues around this decision arise in many organizations and require the company to analyze the project from many perspectives. ARES offers the potential to change the basis of competition in the industry through technology. The company must consider the value, if any, of being first in the industry to adopt a technology; the potential impact on customer services, quality, and reliability; and the role and value of information systems technology. Burlington grapples with how to quantify both tangible and intangible benefits, and deliberates whether investments that yield improvement in hard-to-quantify factors such as reduced delivery time and improved service reliability can be subjected to the same financial scrutiny as equipment replacement decisions such as new locomotives. Demonstrates thoughtful, creative approaches to measuring hard-to-quantify benefits.

    Keywords: Investment; Rail Transportation; Information Technology; Competitive Strategy; Performance Evaluation; Performance Effectiveness; Cost vs Benefits; Technology Adoption; Technological Innovation; Customers; Quality; Rail Industry;

    Citation:

    Hertenstein, Julie H., and Robert S. Kaplan. "Burlington Northern: The ARES Decision (A)." Harvard Business School Case 191-122, February 1991. View Details
  84. Burlington Northern: The ARES Decision (B)

    The ARES team formally proposes that Burlington Northern implement the ARES system. The project meets resistance. In light of financial restructuring and high level of debt, executives wonder whether the company can afford ARES. Weak links during the ARES development process to corporate strategic planning, corporate capital planning, and other corporate functions raise concerns. Executives also worry about whether their 100-year-old, traditional organization can adapt to and exploit ARES's modern electronic technology. When ARES team members' zealous advocacy of the project raise concerns about objectivity in evaluation, an outside consultant is hired to audit benefits, technologies, and whether benefits can be unbundled and implemented selectively.

    Keywords: Accounting Audits; Restructuring; Cost vs Benefits; Decision Choices and Conditions; Borrowing and Debt; Capital Budgeting; Projects; Technology Adoption; Service Industry;

    Citation:

    Hertenstein, Julie H., and Robert S. Kaplan. "Burlington Northern: The ARES Decision (B)." Harvard Business School Case 191-123, February 1991. View Details
  85. Manufacturers Hanover Corp.: Customer Profitability Report

    Banking company noting declining profitability from its traditional lending activities has started to measure the total profitability of its lending relationships. A loan pricing model estimates the profit and return-on-equity from commercial loans. Additional work was required to recognize the revenue from fee-for-service business for the same customer that is performed by other units in the bank. The case raises the problem of how revenues and expenses from diverse activities can be combined to produce an accurate picture of customer profitability.

    Keywords: Investment Return; Revenue; Commercial Banking; Banks and Banking; Customer Value and Value Chain; Banking Industry;

    Citation:

    Kaplan, Robert S. "Manufacturers Hanover Corp.: Customer Profitability Report." Harvard Business School Case 191-068, October 1990. View Details
  86. John Deere Component Works (B)

    Having installed an activity-based system, the division is now exploring the insight provided by that system. In particular, it is studying the economics of lot-size process planning and product mix management.

    Keywords: Activity Based Costing and Management; Production; Business or Company Management; Planning; Cost Accounting; Cost Management; Product Marketing; Management Practices and Processes; Consumer Products Industry; Agriculture and Agribusiness Industry;

    Citation:

    Kaplan, Robert S. "John Deere Component Works (B)." Harvard Business School Case 187-108, June 1987. (Revised May 1990.) View Details
  87. Texas Instruments: Cost of Quality (B)

    A division questions whether to retain, modify, or abandon its cost of quality system now that more direct measures of quality have been adopted. Discusses the role of quality cost measurement in a mature quality management system.

    Keywords: Measurement and Metrics; Quality;

    Citation:

    Kaplan, Robert S. "Texas Instruments: Cost of Quality (B)." Harvard Business School Case 189-111, April 1989. (Revised January 1990.) View Details
  88. Texas Instruments: Cost of Quality (A)

    Texas Instruments implements a Cost of Quality (COQ) system as part of a company-wide "Total Quality Thrust." After several years of operation, group management questions whether or not the COQ system should be updated to make it more useful in identifying areas for quality improvement. The case documents the current system and asks students to analyze the role it played in the quality control process and areas in which it could be improved.

    Keywords: Quality; Performance Improvement;

    Citation:

    Kaplan, Robert S. "Texas Instruments: Cost of Quality (A)." Harvard Business School Case 189-029, August 1988. (Revised November 1988.) View Details
  89. American Bank

    American Bank is developing a new system to compute product costs. The deregulated, more competitive environment for commercial banks has created both problems and opportunities for banking operations. In order to price existing products and assess the desirability of new product introduction, a system is needed to estimate the demands that each banking product places on the organization's resources.

    Keywords: System; Consolidation; Commercial Banking; SWOT Analysis; Fair Value Accounting; Cost Management; Price; Banking Industry; North and Central America; United States;

    Citation:

    Kaplan, Robert S. "American Bank." Harvard Business School Case 187-194, June 1987. (Revised August 1988.) View Details
  90. Wilmington Tap and Die

    The general manager of a division manufacturing taps and dies must decide whether to continue a major capital investment program. The program was designed to replace aging mechanical machines with modern, electronically controlled equipment. A post-audit, after an initial group of two machines had been purchased and made operational, revealed that actual sales were lower than had been projected in the capital expenditure request, and operating costs were higher because of problems adjusting to the new technology. Analysis requires considering intangible benefits from new investment in addition to the more easily quantified labor cost savings.

    Keywords: Capital Budgeting; Investment; Accounting Audits; Cost Management; Technological Innovation; Technology; Performance Productivity; Production; Management Analysis, Tools, and Techniques; Manufacturing Industry;

    Citation:

    Kaplan, Robert S. "Wilmington Tap and Die." Harvard Business School Case 185-124, March 1985. (Revised November 1985.) View Details

Presentations

  1. Keynote Address

    Citation:

    Kaplan, Robert S. "Keynote Address." In The Total Quality Forum: Forging Strategic Links with Higher Education: A Report of Proceedings. Procter & Gamble Company, Cincinnati, OH, August 6–8, 1991. (pp. 4-10.) View Details

Other Publications and Materials

    Research Summary

  1. Performance Management Systems

    Kaplan's research on performance management systems includes further applications of strategy maps and The Balanced Scorecard for effective strategy execution. His recent research encompasses using strategy maps and scorecards for inter-organizational alignment particularly for creating shared value with customers, suppliers, strategic alliance partners, and communities. In another stream of work, Kaplan is demonstrating how to integrate enterprise risk management into the BSC strategy execution system.
  2. Cost Management Systems

    Robert S. Kaplan continues to explore the design and use of activity-based cost management systems for manufacturing and service companies. His most recent work, done collaboratively with Professor Michael E. Porter, applies time-driven activity-based costing (TDABC) to measure and manage the costs of health care delivery. Currently, he is leading pilot projects in about a dozen hospitals to demonstrate the feasibility and benefits of this approach.
  3. Risk Management Systems

    Along with Assistant Professor Anette Mikes and Associate Professor Dennis Campbell, Kaplan continues to explore how companies can implement risk management processes that reflect their strategies. The research involves case writing, teaching in executive program, and writing articles for general managers and risk professionals.
    1. Awarded a Doctor Honoris Causa from the University of Waterloo in 2008.

    2. Received the 2008 Champion of Workplace Learning and Performance Award (with David P. Norton) from the American Society for Training and Development.

    3. Nominated as the 1996 Finalist for the Financial Times/Booz-Allen & Hamilton Global Business Book Award for The Balanced Scorecard: Translating Strategy into Action (with David P. Norton, Harvard Business School Press, 1996).

    4. Winner of the 1993 Notable Contributions to Management Accounting Literature Award from the Management Accounting Section of the American Accounting Association for Implementing Activity-Based Cost Management: Moving from Analysis to Action (with Robin Cooper, Larry Maisel, Eileen Morrissey, and Ronald M. Oehm, Institute of Management Accountants, 1992).

    5. Winner of the 1998 Notable Contributions to Management Accounting Literature Award from the Management Accounting Section of the American Accounting Association for The Balanced Scorecard: Translating Strategy into Action (with David P. Norton, Harvard Business School Press, 1996).

    6. Winner of the 1999 Lybrand Certificate of Merit Award presented by the Institute of Management Accountants for "Transfer Pricing with ABC" (with Dan Weiss and Eyal Desheh, Management Accounting, May 1997).