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 develop various measures to measure the performance. Following six indicators were key for all business units: 1. Profitable revenue growth 2. Customer delight 3. Employee Satisfaction 4. Drive to operational excellence 5. Organizational development 6. IT support
Implementation
The top management at Philips headquarters in Netherlands decided to implement the