The balanced scorecard is considered one of the most useful devices to use to analyze company performance in a 'balanced' format. Rather than focusing on the financial performance of a company alone (although this is one component of the scorecard), the company is also examined from a learning and growth perspective; a business process perspective; and a customer perspective.
Balanced Scorecard
i attaching a case study answer question USING STRATEGY IMPLEMENTATION THEORY AND FRAMEWORK >>>Critically discuss benefits a balanced scorecard approach measuring monitoring performance, analyze BCom develop performance measures relate corporate goals.
Balanced scorecard: How it can help Bcom plc
The balanced scorecard approach
The balanced scorecard approach was developed, as its name implies, to give businesses a more 'balanced' way of evaluating their strengths and weaknesses. It suggests that organizations view themselves through four distinct lenses: the learning and growth perspective (which stresses 'soft' resources such as employee strengths and corporate culture); the business process perspective (metrics which see if the internal business processes are running well and business' products and services align with customer needs); the customer perspective (customers' satisfaction with the product or service price, quality, and style); and the financial perspective (profitability, risk-benefit analysis, and so forth) (Balanced scorecard basics, 2013, Balanced Scorecard).
In a competitive industry such as telecommunications, intelligent use of the balanced scorecard is essential. The British-based company Bcom plc, "was one of the first UK companies to develop Bluetooth® computer chips that allow electronic devices to communicate with each other using short-range wireless technology. A leading provider of personal wireless technology to consumer product manufacturers, Bcom operates in the UK semi-conductor industry" (Case study, n.d.: 1).
The learning and growth perspective
Fundamentally, as a technologically-driven company, Bcom plc can only be as strong as its human and intellectual resources. New ideas are essential for the company to thrive and it must ensure that its employees are well-trained and have strong technology backgrounds." In a knowledge-worker organization, people -- the only repository of knowledge -- are the main resource. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode" (Balanced scorecard basics, 2013, Balanced Scorecard). The balanced scorecard suggests using metrics to measure employee knowledge and performance. For example, does the knowledge base of employees fundamentally align with the types of products the company wishes to develop in the future? How many employees have advanced degrees and experience commensurate with the needs of the company? Do employees have a strong track record of developing innovations? Other metrics include the company's ability to secure top graduates and to retain them. Although employee quality can be the most intangible aspect of the balanced scorecard, "learning and growth constitute the essential foundation for success of any knowledge-worker organization" (Balanced scorecard basics, 2013, Balanced Scorecard). This is supported by the fact that the company has decided to increase its expenditures on R&D, to remain competitive within the industry and to support greater revenue growth, which is expected to fall from 30 to 25% in the coming year.
The business process perspective
Although having an inspiring mission is important, ultimately the business processes must support the products and services generated by the company in a positive fashion. "Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements (the mission)" (Balanced scorecard basics, 2013, Balanced Scorecard). In the case of Bcom plc, the company's focus is on R&D to maximize cost efficiency while outsourcing the actual manufacture of its products elsewhere. Determining what the customer wants is essential, given that the core, base of its revenue is innovation and ideas rather than its manufacturing capabilities. However, also part of the business process perspective is ensuring that the companies to which it outsources produce products of high quality: monitoring for quality and defects is another vital metric to keep in mind.
The customer perspective
Bcom plc remains highly dependent upon a very narrow range of customers, deriving 60% of its revenue from only five customers. Demand for cheaper handsets without the Bluetooth capabilities that are the core of the company's output is the main reason for the company's decline profits. To shift its production to answer this change in customer demand, Bcom is creating lower-cost Bluetooth headsets and is also exploring the gaming component of the market. "Other projects include a next generation chip to allow mobile phone handsets to operate as a radio, which Bcom believes will be attractive in low cost markets, especially in emerging economies" (Case study, n.d.: 2). Monitoring customer demand is important as are monitoring trends in the industry and wider economy. Not only must Bcom respond to demand from its core customers, it must also analyze demand trends amongst the consumers who buy from those companies. Finally, it must continue to explore new venues to sell its products and find new retailers whose product lines align with the company's specialties.
You’re 83% through this paper. Sign up to read the full paper.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.