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The balanced scorecard is a performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes. The balanced scorecard attempts to help managers plan, control, and execute company goals by providing feedback to while implementing new strategies, goals, and objectives. The balanced scorecard is a system used by management that when implemented allows management to make their company’s vision and mission clear, shows what will be measured, and helps managers devise a plan of action to meet their goals. After the plan of action is established, they are implemented and measured through four perspectives: the customer perspective, the business process perspective, the learning and growth perspective, and the financial perspective.
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    1 The balanced scorecard is a “performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes” (Balanced Scorecard 201! The balanced scorecard attempts to help managers plan# control# and execute company goals by providing feedbac$ to %hile implementing ne% strategies# goals# and ob&ectives The balanced scorecard is a system used by management that %hen implemented allo%s management to ma$e their company's vision and mission clear# sho%s %hat %ill be measured# and helps managers devise a plan of action to meet their goals fter the plan of actionis established# they are implemented and measured through four perspectives) the customer  perspective# the business process perspective# the learning and gro%th perspective# and the financial perspective (Balanced Scorecard Basics 201!The customer perspective sho%s the importance of the recent trend for businesses to concentrate on customer focus and satisfaction *f a customer is unhappy %ith the products or services they receive from a business then they %ill loo$ for a different company to purchase from To develop measurements# managers need to focus on customer feedbac$ in order to devise strategies that improve customer experiences This %ill allo% the company to gain ne% customers and retain them for years to come +oncentration should be placed on a business' target mar$ets and the means by %hich %e are providing products and services to these customers The business process perspective# as it implies# pertains to the inside procedures of a company ,easurements based on internal procedures allo% managers to see if their products aremeeting customer standards as %ell as examine ho% efficient the company's operations are -bviously# if there are issues management %ill need to ma$e some changes in order to improve  products and processes of the business The learning and gro%th perspective implies that people are the company's only source of information and that it is vital# %ith the advances in technology#    2 to train# gro%# and empo%er employees *mplementing this strategy %ill utili.e the organi.ation'smain asset) people# as %ell as develop a positive %or$ing environment that %ill consist of a team effort and company pride %hile increasing productivity /mployees ma$e the difference bet%een a company having a competitive advantage or not having one The financial perspective loo$s at a company's finances such as) revenues# earnings# cash flo%s# and return on capital ll  businesses use financial data to prepare internal and external financial statements and reports The thought process %ith the balanced scorecard is that if only financial information is considered# the situation of the company ends up unbalanced and that is %hy the other  perspectives are of vital importance to $eep the company balanced (Balanced Scorecard Basics 201!*mplementing a balanced scorecard management system assists managers in focusing on customers# operations# financials# and employees to combine them in the best %ay possible to carry out the company's mission by developing both short and long term goals# devising a plan of action# and monitoring the progress to reach these goals %hile ad&usting as necessary *n order for the balanced scorecard management system to be successful# the measurements and re%ard systems must be accepted company%ide so everyone $no%s their distinct roles in implementing the system ata must be collected and analy.ed in order to compare actual performance %ith anticipated performance so any necessary actions may be ta$en to reach company goals s //+'s financial analyst * %ould most definitely recommend that //+ adopt the  balanced scorecard management system This system %ill help improve every aspect of the company *t %ill focus on the company mission %hile developing strategies to meet long term and short term goals *t %ill improve customer satisfaction and retention %hile gaining ne% customers because %e listen to %hat they have to say regarding our products and ma$e the    3 changes and improvements they suggest *t %ill assist in improving efficiency and productivity  by t%ea$ing operations procedures and ma$ing employees feel li$e assets %hile re%arding them for their performance This %ill develop a very positive# open# and productive culture that %ill increase employee retention and cut do%n on costs The more invested in a company's greatest assetits' people the more %e %ill get bac$ in return By implementing the balanced scorecard management system on a continuously improving system# //+ %ill function as a %elloiled machine that %ill allo% them to reali.e maximum profit potential for their sta$eholders %hile continuing to sustain gro%th and innovation for years to come fter providing the resident of //+ this recommendation# she has decided to adopt the  balanced scorecard management system She has no% as$ed me to provide information regardingtying compensation to performance measures Specifically# the unethical behavior that can result from utili.ing incorrect performance measures# ho% //+ can best avoid these behaviors# ho% should //+ tie performance measures to compensation# and %ho is ultimately responsible for creating the performance measures *f the %rong measures are utili.ed to tie performance measures to compensation# employees may ma$e unethical decisions in order to receive more compensation Top executives#such as the ones from /nron and Tyco# misrepresented their financial statements# charged many  personal luxury expenses to the company# committed fraud# reduced the labor force to reduce costs# and the companies declared ban$ruptcy 3o%er level employees could misstate billable hours# falsely record their production activity# and alter customer orders or payment# steal# as %ell as many other unethical behaviors that can result from human greed (Serving 1445!    4 //+ can minimi.e unethical behavior by establishing a clear and precise  performance6compensation measurement system %here measures and responsibilities are clearly defined and not easily manipulated This system should be applied to every employee of //+# regardless of position# in order to decrease favoritism and uncertainty 3eadership is a vital component in establishing and implementing an effective performance6compensation measurement system Senior management should be aggressively involved in the creation and execution of its organi.ation7s performance measures //+ needs a strong and unified  performance measurement system in order to effectively and fairly tie it to employee compensation# %hich include both financial incentives and nonfinancial incentives *t needs to have precise and clearly defined measures that are easily understood by all of //+'s employees By utili.ing the balanced scorecard perspectives# performance measures can be established in regards to financial# customer# internal business operations# and employee and sta$eholder satisfaction that %ill be directly tied to compensation %hile striving to reach organi.ational goals and ob&ectives *n order to accomplish this# top management should develop a precise and %ell constructed performance6compensation measurement structure This structure should sho% ho% the structure %or$s and employees should be %ell educated to the measures and ho% their  performance %ill be evaluated in regards to employee compensation 8or each performance measure# a starting point and target goal need to be established company%ide and for each contributing operation 9ext# baseline data needs to be established to assist employees in understanding their individual and group responsibilities (Serving 1445!/fficient communication %ith employees# suppliers# consumers# and sta$eholders is essential to the successful creation and execution of //+'s performance6compensation measures /mpo%ering employees to ta$e pride in their %or$ and accomplishments %ill ma$e the culture
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