Balanced scorecard implementation at Cattaraugus County rehabilitation center

Strategic Management represents a collection of managerial actions and positions that shapes a company's performance in the long run. It entails internal as well as external environmental scanning, strategy development (long-term or strategic planning), strategy execution, evaluation, and control (Wheelan and Hunger, 2008). Gluck, Walleck, and Kaufman (1982) are of the view that organizational managers endeavor more towards effectively tackling the changing global scenario through four strategic management stages. The first stage entails primary financial planning. The second stage addresses forecast-based planning, and the third comprises of externally oriented strategic planning. Cattaraugus County's ReHabilitation Center (ReHab) started making the use of Balanced Scorecard (BSC) in its process of organizational strategic planning (Martelloetal, 2011).

The Balanced Scorecard (BSC) model of Norton and Kaplan is a strategic performance tool used by managers to give a balanced view of the outcomes and the factors guiding the outcome.. The BSC is a guidance tool that helps a system to organize the strategic objectives of an organization into four outlooks. The model is operationalized through development of quantitative measures in these four outlooks; they are:

Financial

Internal Business Processes

Growth and Learning

Customer (Martello et al., 2011)

Analysis

The ReHab Center of Cattaraugus County is committed to enhancing disabled persons' QOL (quality of life). It delivers all-round care to help every patient attain maximum independence. It has been engaged in strategic planning since many years. A Strategic Planning Director was appointed about 9 years ago, by the Center. Following a careful evaluation of the Center's efforts in strategic planning, the newly instituted director resolved to employ the BSC strategic tool for cascading strategic planning through the Center. The aim of employing BSC was uniting every area of the Center under its overall strategic design. Subsequently, all areas would come up with outcome measures in line with the Center's overall strategic goals. Though numerous metrics or measurements are easily discernible or available in the case of for-profit firms, they cannot be so easily obtained in the case of non-profit organizations, particularly for rehab facilities wherein the consumer population has developmental issues (Martello et al., 2011)

Gaining acceptance and involvement of all staff members in the BSC system is crucial for its successful implementation in the ReHabilitation Center. Initially, a number of employees expressed doubts about the approach, viewing it as an impetuous, one-time system which would again require them to divert precious time towards it, away from their routine tasks. The director, after some interval of time, was successful in convincing the senior-most managers that this tool would result in more efficient organizational strategic planning. The Center, then, with the aid of its entire workforce, accomplished the development of a corporate strategic plan for 2002-2005, which the organization has continually updated, on an annual basis. The ReHabilitation Center's vision, mission and values are displayed below in Exhibit 2 . An analysis of its Mission statement makes it rather clear that the Center's key focus is its customer base (Martello et al., 2011).

The ReHabilitation Center aims at becoming the leader in delivering and evaluating requisite services to disabled individuals. The Center's Vision as well as Mission must be achieved with the help of personnel in the Center, whose work culture is values-based. The Center's outlined values are: integrity, loyalty, positivity, respect, learning, and result-oriented attitude (Martello et al., 2011).

Exhibit 1

The ReHabilitation Center accords equal importance to both financial and customer perspectives.

THE FOUR PERSPECTIVES

With regard to the customer perspective, the Center's intention is enhancing consumer QOL in two areas. Firstly, it strives to provide customer satisfaction, by bridging the chasm of unmet needs; bettering customer access to required services; aiming at improved support of families of disability-affected individuals; and, increased service delivery in natural settings. Secondly, the ReHab Center strives for improving QOL of its customer base by according them as much independence as possible. This is achieved by providing them with opportunities for participation in their respective community; aiding them with the development and sustenance of relationships; formulating personalized plans through the aid of customer input; enhancing customer opportunities to exercise alternative options; and, offering work opportunities to them (Martello et al., 2011)

The ReHab Center has endeavored to acquire new sources of revenue; acquire new incomes; increase discretionary financing; and maximize prior financing. It has also endeavored to attain breakeven level, in terms of its operations, with use of all available finances, while providing for effective resource utilization. In order to facilitate the achievement of its financial and customer objectives, a number of goals have been developed by the Center from the operational viewpoint. The Center, in order to facilitate its customer services targets, has endeavored to improve and strengthen bonds with customers and families of customers by increasing public awareness of the services they can avail of at the Center; ensuring Center workforce accessibility; and by increasing accessibility of services to those suffering from developmental disabilities (Martello et al., 2011).

Cattaraugus County's ReHab Center has endeavored to deliver operational excellence through the development of an extensive information system; ensuring timely customer service; instituting measures and evaluating outcome-related data for constant improvement of its services; fostering a safe, secure milieu for its workforce, customers, and visitors; and, coming up to, and surpassing, regulatory requirements. It has also endeavored to recognize and put into effect new opportunities for services for disabled individuals, in a bid to expand organizational revenues. Finally, through the creation of a positive company image, in addition to active participation in community activities, it ensures that it will generate long-run benefits critical for achievement of its objectives. The ReHab Center understands that it requires a workforce, environment and a technology that facilitates achievement of its operational aims (Martello et al., 2011).

The Center devotes three quarters of its operational budget towards staff remuneration and benefits, indicating that it realizes the significance of creating an inspired, content, and prepared workforce. It has endeavored to improve staff competencies; devise programs for recognizing employee efforts; offer its employees opportunities for personal growth within their workplace; and, hire, orientate, develop, manage, and retain personnel. Towards accomplishing its aims, the Center also needs to increasingly employ technology for supporting onsite services as well as developing information systems. It has attempted at enriching company culture by improving communication and strategic alignment across the Center, in addition to endorsing and applying company values (Martello et al., 2011).

The strategic aims for the Center's four perspectives have been outlined across exhibits 4A to 4E. The exhibits also cover individual strategic goals' key measurements and indicators. These provide specific outcomes, which are required for strategic plan implementation, to the Center. The scorecards connect the overall long-term strategies to all areas of the ReHab Center. Therefore, all the organization's sub-units get linked to its strategic plan (Martello et al., 2011).

EXHIBIT 2A

Exhibit 2B

EXHIBIT 2C

EXHIBIT 2D

EXHIBIT 2E

Conclusion

The ReHab Center, in applying the BSC tool, has equally focused on the financial and customer perspectives. The basis for this equal attention is the Center's necessity to perform its main mission for customers (i.e., developmentally disabled persons), and maintain its financial stability. The focus on both perspectives is crucial to the Center for catering to its customers in an effective and efficient manner (Martello et al., 2011).

Though the application of the BSC approach in the Center's long-term planning process is new, the company's management team has approved it. The challenge ahead is continuance of the process of developing measures of outcome for separate organizational departments, and tying these measures to its strategic goals. The Center is aware of the fact that this process is very challenging as it is not easy to measure real outcomes. Outcome measure formulation constitutes a constant developmental process. The Center feels that this will undoubtedly improve long-run organizational effectiveness and efficiency (Martello et al., 2011).

SLP (3 Pages)

The largest beverage manufacturer in the world, the Coca-Cola Company (NYSE: KO) refreshes its customers with over 500 sparkling brands. The organization, along with its bottling partners, commits itself to its 2020 Vision, which is a strategy to increase system revenues two fold in this decade, and concentrate on five major areas, namely, profit, portfolio, people, planet and partners. Its brand portfolio is the strongest among non-alcoholic beverage makers; the Company now features 20 brands, which generate a yearly retail sales amounting to 1 billion dollars (Sheets, 2010).

Mission

The Coca Cola Company's mission is long-term. The mission statement declares its intent as an organization, while serving as a yardstick against which the company evaluates its decisions and actions.

To invigorate the planet.

To stimulate moments of happiness and optimism.

To make a difference by creating value (Sheets, 2010).

VISION

This plays the role of a framework for Coca-Cola's Roadmap, driving all elements of its business by outlining what requires to be done by the company for continuing to attain sustainable, quality progress.

People: The Company strives to provide a great work setting wherein its people (employees) feel motivated to put their best foot forward.

Portfolio: It aims to develop a range (portfolio) of superior beverage brands, which foresee and meet customers' needs and wants.

Partners: The Company aims at nurturing a successful network of suppliers and customers with whom it wishes to develop mutual, lasting value.

Planet: It strives towards being responsible and making a difference by building and supporting sustainable communities.

Profit: Coca-Cola Company's goal is long-term maximization of shareholder returns, while bearing in mind its overall responsibilities.

Productivity: It attempts to be a lean, highly effective, and dynamic organization (Sheets, 2010).

WINNING CULTURE

This describes the behaviors and attitudes required by the company personnel to make its 2020 Vision come true.

VALUES

Coca-Cola Company's values play the role of a compass for its actions, and portray its behavior in society.

Leadership: The mettle to make the future better

Collaboration: Leverage combined genius

Accountability: Be the one to make it happen

Integrity: Being real

Passion: Dedication via both mind and heart

Quality: To perform every task/activity well

Diversity: As wide-ranging as its brands (Sheets, 2010).

FOCUS ON THE MARKET

Concentrate on the requirements or demands of customers, franchise partners and consumers

Venture out and mingle with market participants (customers, rivals, etc.) in order to observe, listen, and learn

Develop a world view

Be voraciously curious

Concentrate on daily marketplace execution

WORK SMART

Take action with urgency

Stay receptive to change

Be bold enough to alter course whenever required

Work efficiently

Stay constructively dissatisfied

ACT LIKE OWNERS

Retain accountability for both inactions and actions

Supervise and manage system assets, in addition to concentrating on value creation

Learn from outcomes, i.e., what activities led to desired results and what failed

Reward employees for risk-taking and discovering better solutions to problems

BE THE BRAND

Prompt innovation, optimism, fun and zeal (Sheets, 2010).

Financial Performance

The Company reported 12 billion dollars revenue in the third quarter, same as that of the previous year's third quarter. In combination with dip in sales during the first and second quarters, there is a 2% drop in the organization's year-to-date income. Net quarterly income was 2.1 billion dollars, a whopping fall of 14% from the past year. EPS (Earnings per share) was 48 cents - 6 cents lower than the previous year's EPS, and 4 cents short of the consensus estimate of Wall Street brokerage analysts (The Coca-Cola Company Announces Stronger Growth, 2014)

Sales volume in terms of unit cases rose by 1% during the quarter. While the volume for the company's international operations rose by 1%, there was a 1% decline in its North American volume. A volume decline of 5% in the European region was partly offset by a growth of 5% in Africa and Eurasia, making it evident that a large share of Coca-Cola's struggle rests in its markets in developed nations. Overall, in the third quarter, volume of still beverages rose by 2% - tea contributed a 4% growth, and volume of energy drinks as well as water grew 7%. The quarter results reported flat volume of beverage. Taking into account the challenges faced by the company in its home market and major business lines, a plan for growth was announced. CEO of Coca-Cola, Muhtar Kent stated that the company had looked hard at its progress up until now, and understood that, though the strategies established during the year's start are following the right course, the company needs to increase the scope of its actions and become more fast-paced. Thus, apart from launching a program to enhance productivity, the company also decided to streamline its operations, and align its incentive plans further for delivering against growth targets (The Coca-Cola Company Announces Stronger Growth, 2014).

The aforementioned plan encompasses a streamlined operating paradigm focused more intensely on domestic markets, and aimed at achieving 3 billion dollars "annualized savings" per annum by the year 2019; its other goal is refranchising a majority of company-owned bottling territories in North America before 2018, and several unexplored territories by the year 2020. Further, Coca-Cola will renew emphasis on marketing, in addition to adding returns as an incentive metric (The Coca-Cola Company Announces Stronger Growth, 2014)

In the long run, the company anticipates high single-digit growth of EPS and intermediate single-digit growth of net revenue. Its target of earnings before tax target will be 6-8%. For the years 2014-2015, it expects results to fall short of these targets. Company shares dropped to 41.10 dollars (i.e., an approximately 5% decline) during pre-market trading hours, but rose 4.8% year-to-date before this decline; the Standard & Poor's 500 for the company rose by around 3%. At the same time, rival beverage maker, PepsiCo's futures shares dropped to $93.36 (i.e., 0.2%) but rose 12.8% year-to-date; the company, protected from drops in its soft-drink division because of a huge snack division, depicted strong earnings in its third quarter (The Coca-Cola Company Announces Stronger Growth, 2014)

Coca Cola declared that it would take action towards bolstering growth. The actions back the earlier-announced five main strategic concerns for restoring momentum of the Company and its long-run growth goal of currency-neutral comparable EPS in high single digits.

KEY INITIATIVES

For the purpose of growth revival, the following two main initiatives were introduced by the Coca Cola Company:

Restructuring and simplifying organizational operating model for speeding up its decision-making system and enhancing focus on domestic market.

Enhancing its present successful productivity initiative by targeting annualized returns of 3 billion dollars per annum by 2019. The focus of this initiative will be on four major areas:

Reorganization of the international supply chain of the Company, including North American manufacturing;

Implementation of organization-wide zero-based budgeting;

Restructuring and simplifying organizational operating model; and Inspiring greater efficiency and discipline in regard to direct marketing investments.

Consequently, owing to the above-mentioned productivity efforts, Coca Cola expects to finance essential innovation and marketing initiatives for delivering sustainable net growth in revenue.