...A Balanced Scorecard approach generally has four perspectives: Financial Internal business processes Learning & Growth (human focus, or learning and development) Customer Each of the four perspectives is inter-dependent - improvement in just one area is not necessarily a recipe for success in the other areas. Areas * Finance Return On Investment Cash Flow Return on Capital Employed Financial Results (Quarterly/Yearly) * Internal Business Processes Number of activities per function Duplicate activities across functions Process alignment (is the right process in the right department?) Process bottlenecks Process automation * Learning & Growth Is there the correct level of expertise for the job? Employee turnover Job satisfaction Training/Learning opportunities * Customer Delivery performance to customer Quality performance for customer Customer satisfaction rate Customer percentage of market Customer retention rate the Balanced Score Card introduces the drivers of future financial performance. (Figure 1) The drivers (customer, internal business process, learning & growth perspectives) are derived from the organization's strategy translated into objectives and measures. The Balanced Score Card is more than a measurement system it can be used as an organizing framework for their management processes. The real power of the Balanced Score Card is when it is transformed from a measurement system to a management system. It fills...
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...Foundations of BSC David and Kaplan introduced balanced score card in 1992. It was based on a 1990 Nolan, Norton multi-company research project that studied performance measurement in companies whose intangible assets played a central role in value creation. Norton and Kaplan believed that measurement was as fundamental to managers as it was for scientists. Its roots lie in 1950s-1980s where a team of employees in GE did a project to find out non-financial metrics to measure the performance of a company. They came out with a single financial and 7 non-financial metrics. They are : 1. Profitability (measured by residual income) 2. Market share 3. Productivity 4. Product leadership 5. Public responsibility (legal and ethical behavior, and responsibility to stakeholders including shareholders, vendors, dealers, distributors, and communities) 6. Personnel development 7. Employee attitudes 8. Balance between short-range and long-range objectives This concept was later on carried out by many academic experts including Simon, Drucker and Anthony. Even Japanese also influenced this concept. By 1990 authors that companies should focus on improving quality, reducing cycle times, and improving companies’ responsiveness to customers’ demands. Doing these activities well, they believed, would lead naturally to improved financial performance. stakeholder theory was useful to articulate a broader company mission beyond a narrow, short-term shareholder value-maximizing...
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...In response to these needs, there have been many important developments, in both management accounting research and practice that focus on the use of accounting data and related information regarding strategy and operations for these purposes. One of the most important developments in strategic planning and control have been: the balanced scorecard, a comprehensive set of performance measures designed to assist managers in implementing competitive strategies and monitoring performance with respect to them (Kaplan and Norton 2000). Kaplan and Norton describe the innovation of the balanced scorecard as follows: "The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation." Perspectives The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives: Financial Perspective : “To succeed financially, how should we appear to our shareholders?” Customer Perspective : “To achieve our vision, how should we appear to our...
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...document from: | Other available formats: Abstract Full Text Full Text - PDF (2 MB) Find more documents like this: Subjects: Balanced Scorecard Electric utilities Studies Safety standards Customer satisfaction Cooperatives Success factors Classification Codes 9190 United States 2310 Planning 8340 Electric, water & gas utilities 9130 Experiment/theoretical treatment 5340 Safety management 2400 Public relations Locations: United States--US Author(s): Tim Sullivan Henry Cano Document types: Feature Case Study Publication title: Management Quarterly More options ↓ | | close ↑ INTRODUCING A BALANCED PERFORMANCE SCORECARD FOR ELECTRIC COOPERATIVES: A TOOL FOR MEASURING AND IMPROVING RESULTS Tim Sullivan, Henry Cano. Management Quarterly. Washington: Winter 2009. Vol. 50, Iss. 4; pg. 12, 16 pgs Abstract (Summary) Currently, many electric cooperatives have difficulty systematically measuring their performance in the "mission critical" areas of reliability, safety, cost control and member satisfaction. In part, this is because benchmark data -- particularly for safety and reliability -- has been difficult to come by. Yet, survey research and field experience show that many best-in-class cooperatives already measure their results in these critical areas, often using some form of a Balanced Performance Scorecard. Scorecard for all electric cooperatives. Using the new scorecard, electric cooperatives will, for the first time...
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...A PROPOSAL ON HOW TO APPLY THE BALANCED SCORECARD TO THE COLLECTIVE INVESTMENT MANAGERIAL FIRMS. Muñoz Colomina, Clara I. Urquía Grande, Elena Sevillano Martín, Fco. Javier (Universidad Complutense de Madrid) PAPER FINANCED BY THE PROJECT PR1/03-11669 OF THE UNIVERSITY COMPLUTENSE OF MADRID A PROPOSAL ON HOW TO APPLY THE BALANCED SCORECARD TO THE COLLECTIVE INVESTMENT MANAGERIAL FIRMS. Muñoz Colomina, Clara I. Urquía Grande, Elena Sevillano Martín, Fco. Javier (Universidad Complutense de Madrid) Collective investment companies, as other institutions in the financial sector, are actually going through moments of great volatility. Consequently these firms need to reformulate their strategic forecast for the next years. This need arises, among other factors, from the collapse of global financial markets, progressive liberalizations in tax and company regulation and the evolution in information technology. Collective investments are very appealing for small investors, as they allow them to benefit from the skills of a professional management, as well as to spread different risks with a diversified portfolio in the different mutual funds. Nevertheless in moments of crisis such as the world is experiencing now, the great volatility of markets and capital losses clearly offset the attractiveness of the portfolio management. The starting point is to take into account the new scenario now developing in collective investment management firms: increasing competence, less captive...
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...1.1 Introduction of Balanced scorecard The concept of balanced scorecard was created by Art Schneiderman who is an independent consultant on the management of processes in 1987 at Anolog Devices, a mid-sized semi-conductor company. In 1992, Robert S. Kaplan and David P. Norton start publicising the balanced Scorecard though a series of journal articles and 1996 they published the Balanced Scorecard book. The Balanced Scorecard is a performance planning and measurement framework, with similar principles as Management by Objectives, which was publicized by Robert S. Kaplan and David P. Norton in the early 1990s. Having realized the short comings of traditional management control systems, Robert S. Kaplan and David P. Norton designed the Balanced Scorecard as a result of a one-year research project involving 12 companies. Since its introduction, the Balanced Scorecard has been awarded a prize by the American Accounting Association as the “best theoretical contribution in 1997”. The balanced scorecard (BSC) was developed in the 1990’s is to allow businesses to utilize both non-financial and financial measures in order to align business strategies and goals with the strategic plan. The goal of the balanced scorecard is to integrate the main organizational measures of success into a plan or framework if you will; a plan that is in alignment with the organizational mission, goals, strategic plan, and allows for modification in response to unanticipated change. Historically...
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...Robert Norton & David Kaplan have seen the increasing attention to the importance of strategic measurement system that include both financial and non-financial measures (Kaplan, 2010, p.2). To answer the call, those professors have introduce in 1992 the balanced scorecard which is a multi-dimensional measurement system considering more than one source of information and including both financial and non-financial information. The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and non-profit organisations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals (Balanced Scorecard Institute, 2013). The balance scorecard is a tool that aims to translate the mission, objectives and strategies of an organisation into performance measure. It allows firms to implement strategy and to monitor and manage performance within the organisation focused basically around four different perspectives. From results obtained, managers are able to undertake corrective action on area they should operate further. History: The balanced scorecard has been first introduced in a Harvard Business Review article in 1992 by the professors Robert Kaplan & David Norton and then developed by themselves at Harvard Business...
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... The balanced scorecard is a facet of a performance management system, which measures a company’s strategic success based not only on past performance, but, most importantly, future forecasting as well. Though financial perspective is deemed the most important indicator of measurement, other non-financial perspectives are found to be vital to overall success and growth, such as customer relations, internal business processes, learning and growth (Kaplan, 2007, p. 150). The use of the balanced scorecard is said to create several advantages to the long-term success of an organization and is also proven to increase strategic learning: “The balanced scorecard signals to everyone what the organization is trying to achieve for shareholders and customers alike. But to align employees’ individual performances with the overall strategy, scorecard users generally engage in three activities: communicating and educating, setting goals, and linking rewards to performance measures” (Kaplan, 2007, p. 154). This paper will illustrate a balanced score card for the Naval Ordnance Safety and Security Activity (NOSSA), specifically the budget execution process. NOSSA is a field activity of the Naval Sea Systems Command (NAVSEA) within the Department of Defense (DoD). NOSSA acts as the Technical Authority for Explosives Safety, providing technical policies, procedures, and designing criteria associated with weapons system safety across warfare sites. Through the balanced scorecard...
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...Mecklenburg County positioned for a tough economy through a Customer-Focused Balanced Scorecard Grantham University BA510 Accounting Professor Ezewuchi Amaefule March 24, 2015 Abstract Management’s ability to affectively plan, control, and make good financial decisions in accounting practices are an essential component to achieving organizational profitability. Budgetary restraints, increased operational costs, the economy, and the ultimately the needs of the customer must also be considered to achieve success. When the managerial approach is to evaluate the cause-and effect of both financial and process performance measures, properly aligned to the organization’s strategic goals and objectives, this poses organizations for success, such as, Mecklenburg County in position for a tough economy through a customer-focused balance scorecard, necessary to optimize sustainability and achieve the organization’s overall goals. Mecklenburg County in position for a tough economy through a Customer-focused Balance Scorecard Harvard University Professors, Kaplan and Norton, are credited as inventors of the Balanced Scorecard (BSC). A BSC is a tool organizations use to link strategic goals to operational objectives, through performance measures, to promote successful outcomes. (Snell, Scott & Bohlander, p. 372, 2013). Through BSC, management monitors performance measures from four perspectives...
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...Balanced Scorecard: Measuring performance of an organization involves studying its processes and outcomes to see if it is getting the results it intend to achieve. The best way to determine operational effectiveness is by measuring business performance. There are many methods of measuring performance but the goal is the same — to find out what is working well and what needs to change. Performance measurement can keep a firm on track towards its vision and help achieve its objectives. Balance Scorecard (BSC), an important measure of an organization’s performance is defined as “a document that translates an organization’s mission and strategy into a comprehensive set of performance measures that provides the framework for implementation of its strategy”. A Balance Scorecard strikes a balance between financial and operating measures, links performance to rewards, and gives explicit recognition to diversity of organizational goals. In its simplest form The Balanced Scorecard breaks performance monitoring into four interconnected perspectives: • Financial perspective: Highlights achievement of financially strategic goals, including continued maximization of shareholder value and reasonable return on invested capital for business enterprises. • Customer Perspective: identifies the targeted market segments and measures the company’s success in those segments. It includes customer’s perception of the business, satisfaction, and other value added measures. A non-profit will look to...
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...Week One – Case Study One “Success and Challenges of Balanced Scorecard at Philips” Name: Priyanka Gandhi Institution: Fitchburg State University Course: Select Topics in Advance Managerial Accounting – MGMT 9034 Professor: Dr. Beverley Hollingsworth Date: January 25, 2015 Introduction Philips is a Netherlands based technology company headquartered in Amsterdam with three main divisions namely, Philips Consumer Lifestyle, Philips Healthcare and Philips Lighting. It is the largest manufacturer of lighting in the world. After a dismal performance during the 1990s, Philips decided to restructure the company. High manufacturing costs, growing competition etc made Philips realize the need to transform. It then came up with Business Excellence through Speed and Teamwork (BEST) program aimed at excellence in every aspect of business. Balance Scorecard was one of the tools selected under BEST. The Balanced Scorecard is an organizational performance measurement tool. This system helps in the measurement of both financial and non-financial factors that contribute towards organization’s future growth and profitability. Based on the organization’s vision, mission and strategy it views the organization in four different perspectives namely, 1) Financial Perspective 2) Customer perspective 3) Process perspective 4) Learning and growth perspective In terms of the above perspectives, the various subsidiaries of Philips will group their strategies, set targets and...
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...BALANCED SCORE CARD FINANCIAL PERSPECTIVE To drive revenue growth Sip-n-Sweet objectives concentrate on diversifying into new markets locally within North Luzon. As well as branching out into new customer markets and increasing the number of stores owned by Sip-n-Sweet. Each of these objectives chosen all tie in with Sip-n-Sweet’s overall strategy of expansion of the business in the near future. The key performance indicators incorporated into this perspective help to measure each objective for the business. The main similar measure here is percentage of increase in revenue growth in the overall business and individual store-level. To achieve these objectives they would have to be based upon implementing bonus and incentive schemes for employees so that they are motivated to achieve their task. They would also need to target larger segments of new customer markets by advertising in new locations such as near to universities to appeal to students or offices to appeal to the working customers. Another important objective within the financial section is improvement of operational efficiency, which is reducing wastage costs for the business. It is important to achieve this objective as it saves the company money and better for the environment. CUSTOMER PERSPECTIVE It is important to measure this objective, as it involves the public with collating feedback and results in reference to how the general public perceives Sip-n-Sweet as a business. This objective also gives the...
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...BALANCED SCORE CARD Es una metodología para traducir la misión estratégica de una organización en un grupo de indicadores numéricos de desempeño que integran y enlazan todos los niveles y funciones de esa organización, asegurando así una correcta ejecución de la estrategia en tiempo y forma. Se utiliza para apoyar el alcance de las estrategias de recursos humanos que son: * Maximizar el recurso humano: contar con la presencia de personal con talento y con experiencia que sea capaz de crear valor * Maximizar la productividad: mantenimiento de los niveles apropiados de personal Los factores que se consideran para el BSC para la implementación de una estrategia que genere valor son: financiero, clientes, proceso empresarial interno, aprendizaje y crecimiento. Financiero: | Clientes: | Mejorar la estructura de costos Mejorar el uso de activos Identificar nuevas fuentes de ingresosIncrementar el valor de clientes clientes actuales | Costo total más bajoProducto líderImagenAtributos del producto | Proceso empresarial: | Aprendizaje y Crecimiento: | Excelencia operacionalDesarrollar relaciones conproveedoresProducir productos o servicios excelentesServicio al clienteRelaciones con clientesCrecer y profundizar las relaciones con clientesRetenerlosRegulaciones y comunidadMejorar la actuación en el ambiente, salud y seguridadCuidar y crecer a la comunidad | CompetenciasHabilidadesExperienciaConocimientoTecnologíaSistemasBases de datosRedesMoralCompromisoSatisfacción...
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...BALANCED SCORE CARD ORGANIZATION’S SUPPLY CHAIN MISSION / STRATEGY “Provide channel partners with the latest and competitive product range through a flexible and fast product distribution network while meeting organization’s organic growth objectives” OVERVIEW OF GOODS / SERVICES FLOW Consumer Wholesaler Consumer DC – Asia Mass Retailer Consumer Factory Europe Master Distributor Consumer Factory Asia DC – Europe Specialized Stores Consumer Wholesaler Consumer Page 1 DC – Africa Mass Retailer Consumer On-Line Stores Consumer BRIEF BACK GROUND STEKKO is a French marketing company which deals with the design, manufacturing, distribution & marketing of Consumer Electronics & Technology product range. 80% of the products are manufactured in China and Korea, shipped to distribution centers in Europe, Far East and Africa. STEKKO’s Tier-1 customers are Mass Retailers, Wholesalers, Specialized Stores and Master Distributors who are spread across 40 countries. Although the company’s key focus is on marketing and business development, because of its distribution driven business model, it relies heavily on a cost effective, efficient and fast supply chain network. The Balanced Score Card is a resourceful tool to illustrate the inter-relationship between various business units within STEKKO. Apart from identifying cause and effect dynamics which play out between different functional units, the exercise provides ample opportunity...
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...Phillip Nelson Journal of Political Economy Vol. 78, No. 2 (Mar. - Apr., 1970), pp. 311-329 The psychoanalytic theories and philosophies of Freud have influenced not only psychology but also literature, social science, and medicine, as well as marketing. Freud stressed the unconscious nature of personality and motivation and said that much , if not all ,behaviour is related to the stresses within the personality’s three interacting sets of forces, the id ,igo and superego, interact to produce behaviour. According to Freudian theory, the id is the source of all driving psychic energy, but its unrestrained impulses cannot be expressed without running afoul of society’s values.The superego is the internal is the internal representative of the traditional values and can be conceptualized as the moral arm of personality.The manner in which the ego guides the libidinal energies of the id and the moralistic demands of the superego accounts for the rich variety Harold H. Kassarjian Journal of Marketing Research Vol. 8, No. 4 (Nov., 1971), pp. 409-418 Personality and Consumer Behavior: A Review Abstract This article reviews the current literature in the fields of consumer behaviour and the marketing of services in order to examine the main issues facing the consumer in purchasing services, as opposed to goods. Five distinguishing characteristics of services are discussed and the implications of these for the consumers are placed within the information processing...
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