...Balance Score Card (BSC) An active and engaged board is an essential part of shaping and executing a successful strategy. Followings are the primary responsibilities of corporate board of directors: 1. Approve and monitor the enterprise’s strategy, created and formulated by CEO and Executive Leadership Team 2. Approve major financial decisions 3. Select the chief executive officer, evaluate the CEO and senior executive team, ensure executive succession plans 4. Provide counsel and support to the CEO 5. Ensure compliance However, board of directors often fall short in carrying out their five responsibilities due to limited time they have available, and the inadequate information provided to them. The board members, burdened by limited time and limited information, can participate in a more effective and efficient governance process by implementing Balanced Scorecard program. The program starts with an Enterprise Scorecard enabling the board to become more informed about the enterprise’s strategy so that it can perform better its responsibilities. The board can also create a Board Scorecard, which defines its primary outcomes, board processes, and skills, information, and meeting dynamics for more effective governance. Finally, executive scorecards enable the Board to evaluate the performance of each senior executive and his or her succession plans. Enterprise Balanced Scorecard Enterprise Scorecard describes the strategy of the organization, including strategic...
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...Balanced scorecard is an analysis technique designed to translate an organization's mission statement and overall business strategy. An organization can use the balance scorecard analysis to track progress and manage the implementation of their strategies. The scorecard measures an organization’s performance from four perspectives: (1) financial, the profits and value created for shareholders; (2) customer, the success of the company in its target market; (3) internal business processes, the internal operations that create value for customers; (4) learning and growth, the people and system capabilities that support operations. A company’s strategy influences the measures it uses to track performance in each of these perspectives (Horngren, Datar, & Rajan, 2012, p. 470). UNUM’s success with its balanced scorecard has been the result of getting a number of fundamental things right (Building and Implementing a Balanced Scorecard, Case Study: UNUM Corporation, 1999, p. 13). Vision and Strategy, the vision is the future and the gap between now and the future leads to a plan of action to achieve the vision. How we get to the future involves strategies. UNUM’s strategic goals and measures are to support a clearly defined and meaningful corporate vision (Building and Implementing a Balanced Scorecard, Case Study: UNUM Corporation, 1999, p. 2). Each perspective in UNUM has a vision, quantitative measure and goal. What makes the UNUM scorecard particularly powerful is the strategic implementation...
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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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...BALANCE SCORECARD INTRODUCTION: A Conceptual Framework for Managing Lodging Brands: A Balanced-Scorecard Approach Abstract: The issue of brand management remains a formidable challenge for lodging organizations and lodging brand managers. This challenge is partly due to the fact that effective brand management requires an all-inclusive and comprehensive organizational approach. This paper proposes a framework that uses the balance scorecard (BSC) as the basis for brand management. The framework proposes both a proactive and reactive approach to brand management through the use of performance measures or perspectives, which form the underlying components of the BSC. These are the financial perspective, the customer perspective, process perspective, and the learning perspective. The paper enhances and expands this BSC framework by including a brand maintenance and enhancement component. The concept of balance scorecard was introduced by Kaplan & Norton (1992, 1996, 2007) and they argued that that balance scorecard is a useful tool that tells managers how organization is performing in relation to strategic objectives of organization. Kaplan & Norton(1992) state the four perspectives which are financial perspective,customer perspective,internal business process perspective and learning and growth perspective.These four perspectives are used by managers in order to measure and analyze information. Kalpan and Norton explain these four perspectives which are effective...
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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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...Putting the Balanced Scorecard to Work Managers recognize the impact that measures have no performance but they think that measurement is an essential part of strategy. Effective management however is an integral part of management process. New strategies and process are being introduces to improve performance without examining whether old measures of performance are relevant or whether new one is necessary. The balanced scorecard combines an effective measurement system that help a company’s strategic objectives with a management system that can help drive changes in key areas such as products process customer and market development. The scorecard presents manager with four different perspectives from which to choose measures.it compliments traditional finance indicators with measures of performance for customer internal process and innovation and improvement activities. The measure of the balance scorecard helps focus a company’s strategic vision encourages thinking about current and future success and helps provide a balance between external and internal measures. This helps manager to see what tradeoffs they are making among their key success factors. Looking at the balanced scorecard measures of a company which should be different for every company it should be clear that what is the company strategy. Many companies used balance scorecard. Rock water a global engineering and Construction Company used balanced scorecard to respond to their changing industry. The CEO &...
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...Business Model and Strategic Plan III, Balance Scorecard and Communication Plan Abstract This paper discussed issues and strategies of implementing a Balanced Scorecard in order to facilitate strategic planning in PepsiCo’s Mountain Dew Energy drink company KickStart. PepsiCo has been using the Balanced Scorecard in order to manage its performance measures for the implementing of the Balanced Scorecard to try and select the appropriate performance measures for the area’s listed below; • Growth in developing in the Energy drink new product and emerging markets • Financial perspective---how do we look to stakeholders • Customer perspective---how do our customers se us? • Internal business processes—what must we excel at? • Innovation and learning----how can we continue to improve and create value? Other challenges include collecting the desired information and systematizing its production analysis. Understanding what the customer wants and getting feed back on the flavors, the taste, and the coconut waters affect on the healthier side of the choice. Background and Context PepsiCo’s sister brand Mountain dew has created an off brand for young coffee drinkers of America called Millennia’s. The Challenges of implementing performance for the new product taste is going to be difficult without getting the target audience approval. PepsiCo’s motto is to make sure when it introduces a new product it is consistent with “The performance with Purpose”. The performance...
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...Business Model and Strategic Plan Part 1 BUS/475 Business Model and Strategic Plan Part 1 Scorecard Four Balanced Areas For Measures | Strategic Objectives | Measure | Metric | Target Year 2 | Target Year 2 | TargetYear 3 | Financial | Improve Profitability | Improve return on investments | ROIC | +2% | +3% | +4% | | Improve Revenue | Improve overall Revenue for the company | Revenue | +3% | +4% | +5% | | Increase Assets | Strengthen Financial Resources | Cash Flow | 5% | 5% | 5% | Customer | Customer oriented growth | Increase total number of customers | Market share | +3% | +5% | +7% | | Increase customer satisfaction | Customer satisfaction for goods | Customer surveys | +5% | +10% | +15% | | Increase obesity and healthy living awareness | The amount of customers signing up for monthly newsletters | Customer enrollments | +25% | +40% | +50% | Operation or Process | Improve productivity | Reduce the time to launch products | Product development cycle time | -3% | -5% | -7% | | Improve Physical Resources | Increase the efficiency of current products that product products | Product development | +3% | +4% | +5% | | Reduce Waste | Decrease the total amount of waste at the production line | Expense | -3% | -5% | -8% | Learning and Growth | Improve leadership by reducing turnover | Retain top management positions | Management turnover rate | -20% | -30% | -50% | | Implement a unique work-friendly culture for employees to continue to...
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...Enhancement Voice of Employee The Voice of the Employee focuses on providing a safe and secures workplace in response to instances of violence and poor employee relations (Evans, 2011). Organization utilizes the Voice of the Employee (VoE) to focus on internal processes as traditionally employees’ perspective wasn’t a top priority and not taken into consideration as far as the business was concerned. As part of an organization strategy to continue to evolve, compete, and improve the businesses’ bottom line, as they are devoted to understanding and communicating an open dialogue with their employees. A business seeks to respond to the needs and condition of the employees by strategically designing and implementing the VoE. The United States Postal Service (USPS) developed a metric to improve their internal processes by aligning with Occupational Safety and Health Administration (OSHA). USPS derived slang “Going Postal” after several workplace violences erupted with employees killing managers and other fellow employees. USPS wanted to focus on the internal workplace environment, safety, and employees’ satisfaction. An internal survey was developed as a tool to collect data and employee’s opinions to assess and analyze for workplace improvement, safety, and create a positive friendlier environment. USPS employees are able to deliver mail faster and customers are delighted. The employees are meeting their goals and work habits as well as...
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...Balanced Scorecard Paper BSOP588 June 8, 2014 Professor Walter Mamak In this day and age of technology, strategically planning the performance of your organization, many companies have or will implement the new balance scorecard method as the new catalyst for implementing some kind of strategy improving or monitoring performance. “The balanced scorecard is a generic management term such as information technology “or” performance measurement.” It is not trademarked or copyrighted. (Norton, 1996) From the beginning there were simpler performance measurement frameworks which have evolved into full strategical planning and management systems. Although this performance management frame work was developed about 1990 by Drs. Robert Kaplan (Harvard Business School) and David Norton to incorporate customer, learning/growth, and business process metrics into traditional financial reporting measures, it is now being used worldwide for many governmental agencies, businesses, nonprofit, and industry organizations and the main goal for these entities is to see future performance that will help them all achieve a better balance, vision and strategy for each area or segment of their organization. Utilized in different ways and for different reasons, the balance score card may be used for something as a simple measurement of how well they perform in their jobs and duties daily and on the other hand for others it may be an extremely comprehensive planning and management system...
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...What is Balanced Scorecard? In the early 1990s, Balanced Scorecard was developed as a new approach to performance measurement due to troubles of short-termism and past orientation in management accounting (Kaplan and Norton 1992). Balanced scorecard is a strategic planning and management system that is widely used in business and industry, government, and nonprofit organizations to side with business activities to improve internal and external communications and monitor organization performance against strategic goals (Balanced Scorecard Basics n.d) The balanced scorecard has changed from its simple performance measurement structure to a full strategic planning and management system. The balanced scorecard has evolved from its early application as a simple performance measure framework to a full strategic planning, a simple public presentation-measuring framework to a full strategic planning (Balanced Scorecard Basics n.d).The new balanced scorecard transforms an eye-catching but unreceptive document into the "marching orders" for the organization on a daily basis. It offers a framework that provides performance measurements as well as helping planners identify what should be through and considered. It also enables executives to truly implement their policies (Balanced Scorecard Basics n.d) The balanced scorecard does not only focus on attaining financial objectives, furthermore, it emphasizes the nonfinancial objectives that an organization must accomplish to convene and...
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...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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...1.) What are the respective business strategies of Transworld Auto Parts' economy and luxury divisions? (Think about how each division adds value to its customers and differentiates itself from its competition.) The strategy of the Luxury division was to produce the most innovative, quality parts on the market. The Economy division’s strategy was to produce high quality car parts with the lowest lifetime price that are known for durability and low maintenance cost. 2.) List three items each division must do well to execute its strategy? -Luxury 1. Coordinate supplier management, manufacturing and product delivery 2. Be on time and on spec 3. Managing the supplier pipeline -Economy 1. Must be the best manufacturer (particularly in Asia) 2. Must fully master just-in-time 3. Entire division must be lean 3.) Which division manager has done a better job of executing his business unit’s strategy? Provide three reasons to support your selection. The luxury division did a better job of executing their business unit strategy for several reasons. First, the luxury division had the best results overall at the end of the six month evaluation. Eckhard’s division exceeded in meeting the short term goals that were necessary to put us in a position where the parent company can invest in programs that will help the company compete. Second, the CEO stated if the company did not reach its goal and maintain positive cash flow, he would divest or close TAP. I believe...
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...------------------------------------------------- bALANCE sCORECARD GOOGLE INC. September 12, 2015 BRITTANY JUSTICE September 12, 2015 BRITTANY JUSTICE BALANCED SCORCARD Google Balance Score Card | | | | | METRIC | OBJECTIVES | MEASURES | Supporting Initiatives | Financial | Increased Revenue | Increased Revenue | To innovate current products | Financial | Increased Profit | Increased Profit | To innovate current products | Financial | Development New Technology | Cost of implementing new technology | acquisitions, new employees to bring new insight | Customers | Retain existing customers | increased usage of products and appeal of current products | | Customers | New customers | make enhancements to appeal to new customers | | Processes | Faster Response | Reduce Response time to customer problems | | Processes | Reduce Number of System Issues | reduce system issues customers experience | | Learning & Growth | Increase Employee input, training, business processes | Increased meetings and input from employees on areas for improvement | | INTRODUCTION Google Incorporated is a vastly well-known organization from their products such as the google search engine, google maps, as well as other business applications. Even with a prosperous organization such as google there is always opportunity for enhancement. Often times these goals to enhance the organization are given on a balanced scorecard. A balanced scorecard is a planning mechanism that is...
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...The Balanced Scorecard What is it? Definition: * The Balanced scorecard is a management system that enables organizations to clarify their vision and strategy and translate them into action. * Scorecard allows for actionable terms derived from company strategy. * Makes it easier for management to carry out strategy. * “A system that balances the historical accuracy of financial numbers with the drivers of future performance, while also assisting organization in implementing their strategies” * The term “Scorecard” signifies quantified performance measures and “Balanced” signifies the system is balanced between: * Short-term and long term objectives * Financial and non-financial measures * Internal and external performance perspectives When it started… * Developed in the early 1990's by Drs. Robert Kaplan and David Norton. * The Balanced Scorecard is the most commonly used framework for ensuring that agencies execute their strategies. * Today, about 70% of the Fortune magazine 1,000 companies utilize the Balanced Scorecard to help manage performance. The Balanced Scorecard Why do it? In just 90 days, Sandia Labs was able to redirect $190,000 in savings by dropping initiatives that didn’t fit their overall strategy. “The BSC has forced our management team to focus beyond financial measures… too often in the past we would get sucked into short-term thinking.” “The BSC dramatically improved our data analysis…...
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