Maverick Lodging

17 Pages Posted: 21 Oct 2008

See all articles by Richard Brownlee

Richard Brownlee

University of Virginia - Darden School of Business

Luann J. Lynch

University of Virginia - Darden School of Business

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Abstract

In this case, a hotel-management company assesses the initial effectiveness of its recently implemented balanced scorecard system. The case gives students exposure to (1) determining an appropriate management-control and performance-measurement system for an organization once its strategy and structure have been established, (2) evaluating the design and implementation of a comprehensive balanced scorecard framework, (3) analyzing the usefulness of flexible budgeting as part of a balanced scorecard, and (4) assessing the performance of operating managers.

Excerpt

UVA-C-2160

Rev. June 17, 2009

MAVERICK LODGING

In early January 2000, Cindy Baum was reviewing the 1999 balanced scorecard results for Maverick Lodging. As the Vice President of Asset Management, Baum had developed and implemented the balanced scorecard throughout 1998. Thus, 1999 represented the first full year of results using the balanced scorecard approach. She was anxious to see if the scorecard she had created was accomplishing its primary objective of aligning the company's strategy, structure, measurements, and incentives.

Developing a balanced scorecard had been a considerable challenge because of the complicated nature of the hotel industry. Baum's employer, Maverick Lodging, managed hotels on behalf of third-party owners who had franchise agreements with the Marriott Corporation. Maverick Lodging concentrated on managing three specific types of Marriott properties: Fairfield Inns, Courtyards by Marriott, and Marriott Residence Inns. Fairfield Inns and Courtyards by Marriott offered the typical variety of hotel rooms, whereas Residence Inns offered “suite arrangements” that included a kitchen, sitting room, and one or two bedrooms. The Courtyards typically had a restaurant, whereas the Fairfield Inns and Residence Inns did not. Instead, they had a “gatehouse” area that served complimentary breakfast.

Because third-party owners had many choices among hotel-management companies, including the Marriott Corporation, Maverick Lodging believed that adopting a balanced scorecard framework might help differentiate its services. In addition, Baum believed that a good balanced scorecard would be particularly useful to her because, as the Vice President of Asset Management, she was the principal liaison between the hotel owners and Maverick Lodging. Therefore, she had primary responsibility for ensuring that the contract terms and both parties' objectives were met. Maverick Lodging was one of the earliest hotel-management companies to implement a balanced scorecard management system.

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Keywords: balance sheet, accounting, control systems, management accounting

Suggested Citation

Brownlee, Richard and Lynch, Luann J., Maverick Lodging. Darden Case No. UVA-C-2160, Available at SSRN: https://ssrn.com/abstract=1276601

Richard Brownlee (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4800 (Phone)

HOME PAGE: http://www.darden.edu/faculty/Brownlee.htm

Luann J. Lynch

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

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