Piotr Bartenbach

Business Management 3rd year

HAGLUND CASE STUDY

1.

2.
From the theoretical point of view, if some measures are ineffective it
means that the hypothesis that i.e. increase in Customer satisfaction with
accuracy of charge account bills will result in decrease in Written-off accounts
receivables as a percentage of sales, was wrong and we should investigate why
there is no visible reaction between those two measures.
If such lack of reaction between those measures was caused by some
solitary event, the company should observe it for more time.
If there were none extraordinary events, the company should consider
changing the links and/or measures.
If one of the hypothesis was wrong, the company should change it or
remove it from the Balanced Scorecard. Lets take as an example the Increase in
customer satisfaction with accuracy of charge bills with the Decrease in writtenoff accounts receivables as a percentage of sales. When there is no relation
between those two measures and the company wants to have Written-off
accounts receivables () in their Balanced Scorecard, they should look for
another hypothesis that will in theory affect the Written-offs in a positive way.
Such measure may be Quality of the credit reviews, which will indicate on how
the company monitors the credit granting procedure and how effectively they will
filter off potentially bad credits.

3. a.
There can be plenty of reasons for such results. One of those is that
Haglunds credit reviews are insufficient, thus number of customer satisfaction
will not help to improve bad debts results. Another possible reason is that
Haglunds actions toward collection of the receivables.
Such problems should encourage management to focus more on the
internal processes connected with granting the credit.
3. b.
Like in the previous point, there is no single possible reason. Assuming that
the problem lies within the company we can conclude that such situation is
caused by lower than previously amount of ordered items, thus the number of
unsold inventory is lower but the amount of sold goods is lower as well due to
lack of products in some periods of time.
Another explanation may be that management cut the prices to get rid of
those unsold inventory so the lower prices caused no increase in profit.
Bad debts could be lowered by granting fewer credits which caused lower
sales, lower accounts receivables and lower or the same profit.
Haglund should focus on improving the results not by diminishing number
of credit customers or by selling for lower prices but more accurately forecasting
situation in the following periods and creating more sufficient ways to filter
potentially bad credits.