ACCT3002 Advanced Management Accounting
A2 Project
Weight: 30%
Due Date: 1st October 2023
Objective: Implementation of a balanced scorecard, corporate sustainability, and value
creation
Background:
LEGO Group is a privately owned company that is located in Denmark. The company is still
owned by the original family since it commenced back in 1932. It is considered to be the
largest toymaker in the world. The LEGO brick is central to the product the company sells. The
LEGO brick launched back in 1958 and to this day even though there has been significant
development of the product, the interlocking and connecting ‘brick’ remains the same.
LEGO’s activities include the mass production of interlocking bricks predominately made from
plastic. The company also has several amusement parks around the world and operates
approximately 388 retail stores throughout the world. LEGO employs more than 24,484
people in 2021 worldwide. Group revenue in 2022 jumped to approximately 8.7 billion euros.
Over the years LEGO has faced scrutiny over the effects of their plastic products on the
environment and has succumbed to pressure from environmental groups such as Greenpeace;
they are now looking for materials and fossil-fuel free alternatives that will have a less
destructive effect on the environment.
By 2030, LEGO envisages making their signature bricks using more sustainable sources of
materials without compromising on the quality, safety or longevity of their product. They are
working with suppliers, industry and researchers to develop new materials that will use
recycled and renewable materials. (Source: https://www.lego.com/en-au/sustainability/reporting/ )
The mission and vision for LEGO are to inspire and develop the builders of tomorrow and be
a global force for Learning-through-play. (Source: https://www.lego.com/en-au/aboutus)
The business is also focused on and understands that value can be eroded over time and they
are committed to the way that capital is managed within the business.
As a result of the changes to their product moving toward a more sustainable focus, the
business has decided to revisit their existing balanced scorecard that was created and
implemented some time ago and include in the revised version a fifth perspective dedicated
to sustainability.
You are the Senior Management Accountant for the LEGO company and have been assigned
to assist the Project Manager of the Sustainable practices and Balanced Scorecard
Implementation Project with developing and implementing a new Balanced Scorecard for the
business.
You have located the existing balanced scorecard in the company archives system, and this is
shown below:
Perspective Objectives Performance
measures
Lag Indicators
Performance
measures
Lead Indicators
Financial Improve profit margin
Increase revenue
Increase sales by 10%
on last year
Customer Increase market share
Improve customer
satisfaction
Achieve an average
customer satisfaction
rating of 8.5/10 by
2026
Internal business
processes
Improve production
processes
Create new innovative
products
Reduce the number
of returned products
Learning and growth Improve employee
satisfaction
Develop employee skills
Reduce employee
turnover by 10% by
2025
You are guided by the LEGO leadership team and they have defined one of the key areas
within the company’s practices as being to “play our part in helping build a sustainable future
and make a positive impact on society and the planet, which children will inherit.” (source:
https://www.lego.com/en-au/aboutus)
Required
1. A recommended balanced scorecard for LEGO by presenting the four perspectives of the
balanced scorecard and, using the existing performance objectives and measures, identify
two (2) new measures for each perspective that are likely to be important to LEGO to
meet its objectives. Ensure that you include one new lag and one new lead indicator for
each perspective.
2. Provide justification for each new measure you have identified in part 1 and how you
perceive it will meet the objectives for that perspective by providing examples within your
discussion that are relevant to LEGO.
3. Due to LEGO’s commitment to the environment and sustainability, provide a fifth
perspective for the business related to sustainability incorporating two (2) performance
objectives and three (3) measures for each objective identified. Ensure that you state if
the measures are lag or lead indicators. Provide a justification as to how these measures
will improve the financial performance of the business.
4. Outline four (4) risks to LEGO that they would need to consider to ensure its successful
implementation. Your discussion of the risks needs to be relevant to LEGO and should use
examples to enhance the identification of the risks.
5. Provide an outline to LEGO as to how they can use the 6 Capitals model to successfully
avoid value erosion. Provide a minimum of three (3) examples for each capital that relates
to the LEGO company and a brief discussion on how each of your examples is relevant to
Lego and each element of the 6 Capitals model.
To determine the long-term strategic objectives of LEGO, conduct your own research and
utilise website links made available to you in the footnotes to this instruction document.
Reference and Submission:
• Harvard Referencing should be followed.
• The report should be submitted as a WORD (not PDF) document
• This is an individual assignment.
• Word limit 2, 000 words (no penalty for +/-10%)