As per balanced
scorecard.org, the balanced scorecard is a strategic planning and management
system to align business activities to the vision and strategy of the
organization, improve internal and external communications, and monitor
organization performance against strategic goals. It was originated by Drs.
Robert Kaplan (Harvard Business School) and David Norton as a performance
measurement framework that added strategic non-financial performance measures
to traditional financial metrics to give managers and executives a more
'balanced' view of organizational performance.
with Financial Perspective at the expense of the other three perspectives:
Please give an example of an organization with which you are familiar from
either, form the news, or personal experience where this as been the case. What
were the results of this focus on the financial perspective on customers and
other stakeholders? Please be as specific as you can and give concrete
Rule # 1: Never
rely on just one measure of financial performance. Instead, use a
three-bottom-line approach, which provides for checking performance from
Here I will give
the example of the notorious Enron which was once the fortune five hundred
company. At its peak, Enron reported annual revenues of $100 billion and
employed over 20,000 employees, Fortune
ranked the company as high as seventh on its "Fortune 500" list. We
now know, however, that this edifice was an intricate house of cards built on a
foundation of sham transactions and accounting manipulations. (Bnet, 2009) Enron was myopic on getting the volumes
to raise the revenues without considering the other perspectives.
Can you think of
any organizations that do not have relevant "customers" to take into
consideration? If there are such, how are they different from other
organizations where all parts of the BSC operate equally?
I will give the
example of Kmart. Kmart was losing market share to Wal-Mart way
back in the ‘70’s, but Kmart’s management failed to heed the warning -
apparently because the company was still growing and profitable. Although Kmart
eventually made some changes to its strategy, it was too little, too late. Now
it’s a Chapter 11 "blue-light special" and the chances of it
regaining its market position appear to be somewhere between zero and none.
On the other hand
Wal-Mart is now the biggest retail chain in world having turnover of more than
place disproportionate emphasis on the financial perspective at the expense of
the other three perspectives. Please Give an example of an organization with
which you are familiar from either, the news, or personal experience where this
as been the case. What were the results of this focus on the financial
perspective on customers and other stakeholders? Please be as specific as you
can and give concrete examples.
This has been
4. “Learning and
several measures of the learning and growth perspective, such as
availability of accurate customer and internal process information to
- Ability to
launch new products
- Ability to
create more value for customers
- Ability to
penetrate new markets
- Alignment of
employee incentives with overall organizational success factors
- Rates of
improvement in critical customer-based and internal processes
these measures reveals that it can be difficult to quantify these factors.
a. Identify one
specific example of a measure of learning and growth measure that you feel
could be critical to an organization, but difficult to measure.
growth perspective measures aim at developing the human resources to their
optimal level. Thus the indicators such as employee training hours, turnover,
development and retention will be useful. One specific example of a measure of learning
and growth measure that you feel could be critical to an organization, but
difficult to measure is employee satisfaction levels. This is because employee
satisfaction is determined by multiple factors.
For detailed learning : See Posting No. 222