The Development of the Balanced Scorecard - Free Essay Example

Introduction The intention of this essay is to analyse the Balanced Scorecard and to review its effectiveness as a performance management tool. It will review briefly the short history of the Balanced Scorecard and then analyse each of the different aspects of the management tool and describe how they link together. History of the Balanced Scorecard The notion of the Balanced Scorecard first appeared in the Harvard Business Review in 1992 in an article titled The Balanced Scorecard Measures that Drive Performance,authored by Robert Kaplan and David Norton (Kaplan and Norton 1992). They had conducted a year-long study with 12 companies at the leading edge of performance measurement, [and] devised a balanced scorecard'as a result of their research (Kaplan and Norton, 1992, p.71). A Balanced Scorecard is a strategic planning and management system that is used to align business activities to the vision and strategy of the organisation, improve internal and external communications, and monitor organisation performance against strategic goals(Balanced Scorecard Institute, Unknown). It was brought out of the necessity to include non-financial indicators to measure performance, where in the past businesses and managers focused primarily on financially-based indicators to measure performance. These financially-based performance mea surement systems worked well for the industrial era, but they are out of step with the skills and competencies companies are trying to master today(Kaplan and Norton, 1992, p.71). After spending a year with various companies, Norton and Kaplan realised that Managers want a balanced presentation of both financial and operational measures(Kaplan and Norton, 1992, p.71). The recognition of the importance of operational measures was a milestone in performance measurement systems, as financially-based measurements help indicate the final outcomes of actions and processes already set in place, whilst operational measures help aid the driving of future financial performance. Since its inception in 1992 the Balanced Scorecard is now adopted by thousands of private, public, and non-profit enterprises around the world(Kaplan, 2010, p. 2). Which provides testament to its importance and effectiveness as a performance management system, it is likely that businesses that have implemented th e systems have seen profound impacts on their profit margins and the happiness and innovativeness of their workforce. The Four Perspectives The scorecard itself is made up of four different perspectives; Financial, Customer, Internal Business Processes, and Learning Growth. By looking at these different perspectives the balanced scorecard provide[s] answers to four basic questions; How do customers see us? What must we excel at? Can we continue to improve and create value? How do we look to shareholders?(Kaplan and Norton, 1992, p.72) By providing senior managers with information from four important perspectives, another benefit of implementing a scorecard is that it minimises information over-load by add[ing] value by providing both relevant and balanced information in a concise way for managers(Mooraj, Oyon and Hostettler, 1999, p.489). To understand more completely how the interaction of the phases helps an organisation create additional financial value whilst aiding in the learning and growth, internal business processes and customer satisfaction perspectives see the appendix for fig.1, and fig.2. The four diff erent perspectives and the way they interconnect are an important issue, as such it is also important to analyse each of them on an individual basis; first it must be recognised that each of the perspectives is made up of Objectives, Measurements, Targets and finally Programmes. Each of these areas within the perspective helps identify and measure a way in which a company can achieve its stated objective through the implementation of a programme. A basic example for customer perspective would be as follows; Objective Measurement Target Programme Reduce staff turnover Staff turnover ratio A ratio of less than 6 months To implement staff feedback and satisfaction surveys with the aim of creating an environment in which they feel productive and appreciated Learning Growth Perspective This perspective is the beginning of the scorecard and in conjunction with the cause and effect hypothesis (Fig.2), makes up arguably the most important aspect as its intended to drive improvement in financial, customer and internal process performance(Kaplan and Norton, 1993). This aspect focuses primarily on innovation and improvement of work level employees, essentially creating more efficiency within the internal business processes. However, in order to achieve required innovation and improvements in efficiency a motivated and empowered workforce is essential, one method of achieving this is to implement a staff attitude survey, a metric for the number of employee suggestions measured whether or not such a climate was being created(Kaplan and Norton, 1993). Other such methods which could be implemented are that of calculating revenue per employee, and as such it can then create a measurement which can be observed and recorded year on year to achieve a pre-set objective, thus fu lfilling each of the required facets of the balanced scorecard in relation to this perspective. By implementing a programme, in the form of a survey or other such measures it [can] identify strategic initiatives and related measures, these gaps can then be addressed and closed by initiatives such as staff training and development(Mooraj, Oyon and Hostettler, 1999, p. 483). Once work-force empowerment is achieved and employees are happy and informed about their roles and the overall strategic aim of the organisation and methods of observing, recording and measuring are in place it can now focus on the next stage of the balanced scorecard. Internal Process Perspective This perspective, once an empowered and informed work-force is achieved and employees are working to their full potential, focuses primarily on making business and/or manufacturing processes more efficient, creating more output for the input. In order to achieve these improvements a business may implement many changes that may range from moderate and localized changes to wide-scale changes in business process, the elimination of paperwork and steps in processes, and introduction of automation and improved technology(Balanced Scorecard Institute, 2002). In order to achieve this increase in efficiency an organisation managers must devise measures that are influenced by employees actions. Since much of the action takes place at the department and work-station levels, managers need to decompose overall cycle time, quality, product, and cost measures to local levels(Kaplan and Norton, 1992, p.75). By devising measurements aimed at work-station levels, such as delivery time turnaround or decrease in waste produced, managers are able to observe and monitor increases or decreases in efficiency and also locate where these increases or decreases stem from. Once a suitable measurement system is in place, managers are able to create targets to achieve and finally programmes in which to implement in an attempt to meet the pre-set targets. By implementing a programme which is easily communicated, achievable and produces results that can be monitored by all levels that are relevant to the process, it will find that employees will benefit from seeing the results they produce with the intention of further motivating the work-force to increase efficiency. Once efficiency within the internal business processes has been achieved and an objective, a measurement system, pre-set targets and a programme that is successfully implemented, it can focus on whether or not the increase in innovation and empowerment combined with efficiency has had its intended effect on the customer . Customer Perspective The next perspective is that of the customer perspective which could be argued to be one of, if not, the most important aspect as this is where an increase in sales revenue and thus an increase in income are generated. After creating an empowered, informed work-force and improving efficiency relating to business processes this should lead to improved products and servicesà ¢Ã¢â€š ¬Ã‚ , (Balanced Scorecard Institute, 2002) which in turn should improve the quality of products and services and ideally, with reduced costs incurred from efficiency, lower the cost of products and services offered to customers. In order to achieve this increase in customer satisfaction or market share a similar method is needed in which an organisation must first create an objective, such as increase market share by 10% or maintain or increase repeat purchases. Once an objective is set in place then the organisation must create a measurement system to implement, one which can be reviewed annually, mo nthly or even weekly, an example of this may include a % increase in customer loyalty cards or a % increase in sales revenue. Finally, a programme must be implemented in order to drive toward the objective; an example of this may be an increase in market research to explore the possibility of new market opportunities or perhaps an investment in a new marketing campaign and special offers directed at repeat customers. Financial Perspective The final perspective is that of the financial perspective, in the eyes of the shareholders this is by far the most important aspect and where the effort in the earlier facets of the balanced scorecards cumulates in an increase in profit margins and ratios such as Return on Investment (ROI). This perspective included three measures of importance to the shareholder. Return-on-capital employed and cash flow reflected preferences for short-term results, while forecast reliability signalled the corporate parents desire to reduce the historical uncertainty cause by unexpected variations in performance(Kaplan and Norton, 1993). The first two are self-evidently of importance to shareholders with a return generated for shareholders and cash flow results which result in larger profits, while reducing the risk of uncertainty caused by a variation in performance is of particular importance and is something that can only be achieved through getting every employee focused and aligned with the o verall strategic aims of the company, through an informed, focused and appreciated workforce, an efficient internal business process, and a satisfied customer-base. The Cause and Effect Relationship It is clear that linkages are the most important aspect of the balanced scorecard and that the cause and effect relationship (fig.2) allows for strategic alignment throughout an organisation. This has been seen to be the common thread to the successful implementation of the balanced scorecard,(Murby and Gould, 2005, pp.10) another key element to the balanced scorecard is making sure that all employees understand [the] strategy and conduct their business in a way that contributes to its mission and objectives(Murby and Gould, 2005, pp.5). The importance of the cause and effect relationship in conjunction with ensuring that each and every employee is aware of the overall company strategy allows and an organisation to create a foundation for success in that the learning growth facet provides a company with informed, innovative and an enthusiastic work-force which allows the company to be in a position to progress into the future. A final key point would be allowing managers the ab ility to introduce four new processes that help companies make [an] important link(Kaplan and Norton, 2007). By being in a position to translate the vision, communicating the strategy and linking it to compartmental and individual goals, integrating business plans with financial goals and finally giving each employee the ability to provide feedback, a company has created an environment in which they can adjust and augment at each level should managers feel the need too. Conclusion In conclusion, the essay has covered the short history and fundamentals of the Balanced Scorecard and has shown how it is made up of different perspectives which provides management with basic questions regarding important stakeholders. It also provides management which a detailed measurement system and an ability to observe progress, or regression, within each of the different perspectives via the inclusion of objectives, measurement tools and targets which are created by management themselves. This also allows management to make changes where necessary in order to ensure that the overall strategic vision of the company is still being pursued. The essay has also highlighted the importance of the cause and effect relationship and provides the strategic-mapwithin the appendix which can help provide an illustrative view of how the balanced scorecardin conjunction with the cause and effect relationship can turn an empowered work-force into a long-term financially stable organisation. It also covers the importance of communication, something that most organisations overlook as can be seen by the removal of the work-level employee from the overall strategic vision, and something that most organisations only feel upper-level management should be informed of. Bibliography Balanced Scorecard Institute, (2002). The Balanced Scorecard and Knowledge Management.Available at: https://balancedscorecard.org/BSC-Knowledge-Management Balanced Scorecard Institute, (Unknown). Balanced Scorecard Basics.Available at: https://balancedscorecard.org/Resources/About-the-Balanced-Scorecard Kaplan, R.K. (2010). Conceptual Foundations of the Balanced Scorecard,Harvard Business School, pp. 1-36 [Online]. https://www.hbs.edu/faculty/Publication%20Files/10-074.pdf Kaplan, R.K. and Norton, D.N. (1993). Putting the Balanced Scorecard to Work. [Online] Available at: https://hbr.org/1993/09/putting-the-balanced-scorecard-to-work Kaplan, R.T. and Norton, D.N. (1992). The Balanced Scorecard Measures that Drive Performance,Harvard Business Review, pp.70-80 [Online]. Available at: www.alnap.org/pool/files/balanced-scorecard.pdf Kaplan, R.T. and Norton, D.N. (2007). Using the Balanced Scorecard as a Strategic Management System [Online]. Available at: https://hbr.org/2007/07/using-the-balanced-scorecard-as-a-strategic-management-system Mooraj, S.T. Oyon, D.O. and Hostettler,D.H. (1999). The Balanced Scorecard: a Necessary Good or an Unnecessary Evil?European Management Journal, 17(5), pp.481-491. [Online]. Available at: https://members.home.nl/j.s.sterk/AQM/The%20balanced%20scorecard%20a%20necessary%20good%20or%20an%20unnecessary%20evil.pdf Murby, L.M. and Gould, S.T. (2005). Effective Performance Management with the Balanced Scorecard Technical Report, CIMA, pp.1-43 [Online]. Available at: https://www.cimaglobal.com/Documents/ImportedDocuments/Tech_rept_Effective_Performance_Mgt_with_Balanced_Scd_July_2005.pdf Illustrations Balanced Scorecard Institute, (2002). Cause and Effect Hypothesisà ¢Ã¢â€š ¬Ã‚ . [Online] Available at: https://balancedscorecard.org/BSC-Knowledge-Management Kaplan, R.S. (2010). The Strategy Map links intangible assets and critical processes to the value proposition and customer and financial outcomes.Page 23. [Online] Available at: https://www.hbs.edu/faculty/Publication%20Files/10-074.pdf Appendix (Figure 1) (Figure 2)

Building of Memory Managing Creativity Through Action...

Building of Memory: Managing Creativity Through Action Student: Mac Sorfi Professwor: Dr. Akhtar Hussain Shah Strayer University 2014 Change Management Techniques Change management is the incorporation of a innovated structured and set of tools (new or the combination of old and new ones) utilized in leading the employees’ side of change to attain the desired results (Kloppenborg, Shriberg, Venkatraman, 2003). The Yad Vashem project was very technical (Systemtic) and required energetic and enthusiastic project team members (High Voltage Emotional Energy). There were many challenges in this project, and there was need to manage and enhance the morale of the team members working in the Yad Vashem memorial site†¦show more content†¦Steps to Ensure the Team Members Learn of any Proposed Changes Change is the constant and that is opt for opportunity or issue in the project. 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Hepatitis Essay - 1585 Words

Viral hepatitis are distinct diseases that affects and injures the liver due to the inflammatory cells in the tissue of the organ. They are caused by the contamination of food or water, the practice of unsafe sex, and by the usage of dirty syringes or needles. There are six known types of hepatitis, but the three which are most common include A-B-and C, as they cause about ninety percent of acute (lasts less than six months) hepatitis cases in Canada. Many people infected by this disease mistake it for the flu for its flu-like symptoms, or don’t notice it at all because it’s also possible to experience hepatitis with no symptoms at all. It is a lethal disease, as hepatitis B kills 500, 000 people alone each year. Many people have a†¦show more content†¦Most likely, the hepatitis B will go away on its own. If someone has chronic hepatitis B, treatment will depend whether the infection is worsening and damaging your liver. 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Definition and Characteristics of Shakespearean Tragedy free essay sample

Tragedy is a work of literature where the main character ends up in a catastrophe. The dramatic play The Tragedy of Romeo and Juliet written by William Shakespeare, expresses the 3 elements of tragedy perfectly. The First element of tragedy is the piece of literature must have a hero or heroine. The second element of tragedy is the destruction of a main character. The Third, and final element of tragedy is the death of the main character must serve a purpose. Well written tradgedy can result in a memerable story. A Hero is not just someone with special powers. There are many hereos who dont have special powers. A hero is someone who fights for what they believe in. I feel Romeo is a hero. He is loves hero. Love is life. And if you miss love, you miss life. Leo Buscaglia. Although he did not know it, his love for juiliet would end the the ancient grudge between the two feuding families. We will write a custom essay sample on Definition and Characteristics of Shakespearean Tragedy or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page In reference to being a hero William Wallace in the movie Braveheart written by randall wallace, is also one in a well known tragic drama. They both had motives fo fighting for what thay believed in. Whats a hero without a cause. Romeos motive was love. William wallaces motive was peace and freedom for scotland. IF heros had to have super powers romeo would have the greatest power of all.The power of love.No one person poses eternal life. Romeo demonestrates this when he commits suicide. In the story he realizes the only way he can be with his true love, juliet who he thinks is dead, is by taking his own. He destoys himself by drinking poisin that he purchased from an apothecary. Heres to my love![Drinks. ] O true apothecary! Thy drugs are quick. Thus with a kiss I die. –Romeo Act IV scene iii 119. Unlike romeo, William Wallace dies by exicution when he is captured. Eventhough everyone one will die some day most heros die of causes other than old age or natural death.