Balanced Scorecard

As mentioned in the introduction above, different business types bring a significant different treatment of strategic business control and evaluation. Consider for example, a firm that produce sheets of paper. The production processes are well defined and relatively stable, functional skills are specialized to gain operating efficiencies. There are relatively no strict challenge from the same competitor, because the market share are divided equally, as long as they keep the productions quality and maintain the cheapest cost of production.Regardless of whether the environment is stable or dynamic, an organization needs to exercise control over its operations so that its objectives are achieved as preliminary business planning. Firm that operate in a stable environment with standardized products and processes and low competitive pressures will employ the less complex functional business strategic. While the more complex firm with the dynamic competitor pressure should be consider to em ploy the more complex strategic control system (Shaw, 2004).Concerning the development of strategic control over a corporation, this paper will discuss about the Balanced Scorecard (BSC) for a company named ‘Puppy Luv Doggy Day Care’. Furthermore, it also develops at least three strategic objectives for each of the four Balanced Scorecard areas (Financial, Customer, Process, and Learning & Growth). 2. Balanced Score Card of Puppy Luv Doggy Day Care 2. 1. Balanced Score Card The Balanced Scorecard (BSC) is one of the most influential business ideas in the 20th century.It was noted that over one-half of the fortune 1,000 uses the BSC system (Niven, 2006). Some people consider it as a form of project management, a form of measurement or controlled improvement system. Despite the awesome popularity of the concept, we witnessed the practice of the BSC concept surprisingly concentrates on the private sectors. Robert Kaplan and David Norton first introduced the Balanced Scorec ard in the early 1990’s as a strategic management system that forces managers to focus on the important performance metrics that lead to success.There are four perspectives of BSC as following: 1. Financial perspective This is the standard perspective that everyone uses even before the BSC. Even a non-profit organization uses this perspective in order to balance their books. It measures financial performances through financial ratios and other financial indicators. In the case of Puppy Luv Doggy Day Care, the financial perspective includes strategic objectives in following areas: ? Market share ? Revenues and costs ? Profitability? Competitive position 2. Customer Perspective It is a measure of corporate value viewed from the value it delivers to customers. For instance, time taken to process a phone call, result of customers’ surveys, number of complaints, competitive rankings, etc. In the case of Puppy Luv Doggy Day Care, the Customer Value Perspective includes strat egic objectives in following areas: ? Customer retention or turnover ? Customer satisfaction ? Customer value 3. Business Process PerspectiveIt measures corporate value from the enhancement of its business processes, like time spent prospecting, quality cost, product rework required, etc. In the case of Puppy Luv Doggy Day Care, Process or Internal Operations Perspective includes strategic objectives in following areas: ? Measure of process performance ? Productivity or productivity improvement ? Operations metrics 4. Learning and Growth Perspective This perspective measures corporate value from its learning abilities or the progress of its learning processes.Example of activities measures are staff training, employee suggestion and improvement of certain processes as an outcome of the learning process (‘Balanced Scorecard’, 2006). In the case of Puppy Luv Doggy Day Care, the Learning and Growth (Employee) Perspective includes strategic objectives in following areas: ? Employee satisfaction ? Employee turnover or retention ? Level of organization capability ? Nature of organization culture or climate ? Technological innovation These perspectives are then adaptable to various businesses by choosing different drivers for each perspective.The BSC can also detect and measure correlation between activities, in order to help decide which activities positively impacted others. For instance an online customer service can help reducing telephone calls and time to handle complaints, thus increasing effectiveness of business processes. According to Kaplan and Norton, there are various utilities of the Balance Scorecard. Some of them are: to clarify and update strategy, communicate strategy, align unit goals with corporate strategy, link strategic objectives to long term target, etc (‘Balanced Scorecard’, 2006). Balanced Scorecard The balance scorecard is a management tool that is used by the management of companies to enable them in planning on how to align the business activities to the vision and strategy of the organization so as to improve the internal and external processes of the company. Communication is used to monitor the organization performance against the strategic goals that have been set by the management of the organization.The balance scorecard was first developed by Dr Robert Kaplan and David Norton who discovered that the tool would be used to measure the performance of the employees of the company so that they would improve on their performance it was used by the management of companies so as to clarify the vision and the strategies and then to translate them into action. According to some economist they noted that an organization was viewed into four perspectives as per the balanced scorecard. The Learning and growth perspectiveThis perspective that deals with how the employees can be trai ned in order for them to gain the knowledge and skills that can enable them carry out their activities effectively. It also deals with the corporate cultural attitudes that relate to both the individual and corporate self-improvement so that the attitude for each the individuals and the corporations would change so that they would perform their activities according to the needs of the organization and not for their own interests.There had been increased technological changes that have resulted to the management of the organization to train their employees so that they can adapt to those technological, economic and social-economic changes. The business process perspective The perspective deals with the internal business processes.The metric allows the managers of an organization to learn how well their businesses are run and whether the products and services of the company can conform to the customer tastes and preferences There are two kinds of processes that are used when determini ng the goals of a company these are mission oriented processes and the support processes. The mission-oriented processes are used in measurement of the employee’s performances so as to ward them according to their skills and responsibilities.The processes are usually used in the government offices. The customer perspective The recent research showed that customers contributed to the success of the company and therefore it is important to satisfy their needs because incase they do not get satisfied with the services of their suppliers or traders they can look for alternative suppliers who could meet their needs and this can pose to be a big challenge to the marketing department as the volume of sales of the company can be affected negatively.The management should learn how to satisfy their customers needs by identifying the different types of customers and their different tastes and preferences so that the right kind of products and services are produced for them so as to main tain the customers and also to increase the earnings of the company by providing the right of goods and services that are acceptable to the customers. The financial perspective It is important for the management of organization to provide timely and accurate records of data so that they can give the true financial position of a company.The implementation of corporate databases it can enhance proper centralization and automation of information that can enhance proper recording of the transactions into the financial statements so that proper analysis of the company can be made. The Tri-cities community Bank was a company that was located in the Midwest United States; it had ten branches that were grouped into divisions that is the southern Division (SD) and Northern Division (ND). The divisions consisted of five branches that were headed by a Branch President and a Branch Chief Loan Officer.The other staffs that managed the operations of the company were the customer service represent atives, loan representatives, mortgage loan originators, head tellers and the administrative assistants. Mrs. Chris Billing was the Southern Division (SD) president from a Marketing Director because she could improve the performance of the company since she had acquired the necessary skills from college about how to improve the performance of the company.In the year 2000 she implemented the balanced scorecard into the organization although there were protests from the Northern Division (ND) presidents who saw the implementation of the strategy as impossibility since they had not had about the strategy before and was not ready for change. Branch A According to the Customer Service Representative of Tri Cites Community Bank Mrs.Mary Richards, she stated that the implementation of the balanced scorecards would create greater loan volume for the loan balances, deposits and the certificates of deposit and this would lead to lower profit margin, but it would be beneficial to the companyâ €™s growth. According to Mike Moore she stated the measures of the balanced scorecard were realistic, but the implementation of the measures was difficult because it was the first time for the employees to use them thus getting to learn the measures would mean creation of more time to train all the staff about the implementation of the performance measures.According to Paul Franks he stated that since the employees carried out their activities while using the measures then they would earn more cash bonuses, which improve the company’s performance and also the living standards of the employees of the company if they used the measures since proved good returns to the company once they utilized them appropriately. Branch B Mrs.Pamela Wise the loan representative of branch B said that the measures would be used to measure the progress of the company while in the process of trying to achieve its goals and objectives as this would lead to meeting the needs of the community and also to increase the profitability of the company. The measures would be used in determining the right kinds of promotions and pay rises for the employees, they would also be used to assign the employees according to their skills and knowledge so as to ensure the duties and responsibilities of the company were carried out effectively.Branch C Mr. Bill Sovensen stated that the balanced scorecard measures would promote teamwork among the tellers, loan officer and the customer service representatives such that they would enable them to discuss the goals of the organization and also be in a position to understand the activities of the bank so as to promote effective implementation of the company’s goals and objectives. The scorecard measures would enable the management of the company to achieve goals such as selling, cross-selling, and the goal of making customers to feel comfortable with the services of the bank.The Administrative Assistant Mr. Luo Martin said the balanced score card measures would lead to the successful implementation of the goals and objectives of a company. The success of the company would led to the management to organization of recreational places that would be used to appreciate the efforts of the employees so as to motivate them to work harder in their duties and responsibilities and also to avoid employee turnover as it could affect the reputation and performance of the company. Branch B According to Mr.Gray Smith he stated that the balanced scorecards were important but it was important for the management of the company to choose measures that were relevant to the management’s growth. Mr. Al Taylor stated that the measures would lead to achievement of the company’s goals. Branch E The balanced scorecard would be used to compare the performance of the company with other companies so that the company could keep track of the company’s performance so that the right measures could be put in place in order to enable the company to compete effectively with its competitorIt was noted that in order for the organization to improve in its performance it had to the implement the four perspectives of the balanced scorecard into its organization these were financial measures, customer measure, internal business measures and the retention measures and the learning and the growth perspective. The management of the company Northern Division should have implemented the balanced scorecard into the company in order for it to achieve its goals and objectives.The benefits of the perspectives were that if one perspective was good then other would also improve, for example if the internal perspective improved then the internal processes would also improve. If the customers were satisfied with the services that they needed then they would continue to purchase the company’s products and also use their services and this would boost the performance of the company .The sales volume of the company would improve if the company’s financial status improved then the management of the company would be in a position to achieve its strategies successfully, if the company’s strategy would be good then this would be translated to increased returns for the company and the application of the financial measures would be done in an effective and efficient manner.It was reported that if the employees were trained about sales effectiveness, customer service, product profitability and local bank knowledge, they would be in a better position to serve their customers since the knowledge and skills acquired would enable them to gain relevant experience of how to improve the performance of the company. The management of the bank also noted that the training programs given to the employees such as the in house tests on various training topics, higher-quality referrals and cross-self proposals they would equip the employees with right techniques to handle the company’s activities.The imple mentation of the programs would lead to higher customer satisfaction and it would also lead to the management of the company to learn more techniques of retaining their customers so as to achieve high sales volume of the company’s products and services. References Burgelman R A. and. Grove. A. S. (1996) â€Å"Strategic Dissonance . California. California Management Review, Vol. 38, No. 2. pp. 8-28. Kaplan, R. S. and Norton. D. P. (1996) Using the Balanced Scorecard as a StrategicManagement System. Harvard Business Review 74, no. 1 75+. (May be accessed at http://www. hbsp. harvard. edu/frames/groups/hbr/janfeb96/96107. html). Liedtka J. M. and Rosenblum J. W. 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