The material in this module tells us that many companies place disproportionate emphasis on the financial perspective at the expense of the other three perspectives. Give an example of an organization with which you are familiar from either previous coursework, the news, or personal experience where this has been the case. What were the results of this focus on the financial perspective on customers and other stakeholders? Be as specific as you can and give concrete examples.
An over-emphasis on financial metrics is indeed a bad idea because it can lead to ignorance or ambivalence towards other parts of the business equation that should absolutely be taken seriously and actually end up affecting the financial bottom line even if the connection is not obvious. Customers that feel the dollars and cents are focused on too much would go to firms that focus more on customer service and contributions to the community. Stakeholders, which do not just include employees and executives, might feel the same way and go elsewhere with their advocacy and patronage. For example, a college that keeps jacking up tuition rates with no real connection to inflation or other college rates could see patients jump ship and go to the more cost effective college. A person that goes to a car dealer and is summarily ignored or directed to cars they don't really want due to incorrect perceptions about class and so forth would rub that person the wrong way and they would go to a different dealer. A loss prevention officer at a retail store only following black people would hack off a lot of potential black customers. Even though the focus is on theft, assuming this only for black people would be less than wise.
Who Are "Customers"?
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?
The definition of customer in the traditional sense may not be...
For example, food service companies that sell food to restaurants obviously would not be interacting directly with the customers but they wares would be eventually served to the customers and the food service companies themselves do work directly with the restaurants that buy their goods. The restaurants are customers in that they could always buy their goods from other food service companies and they need to be kept satisfied through good service and competitive prices. Even with this distinction, the balanced scorecard would operate a little differently because the metrics used would be different as the interactions and type of business being undertaken are different. However, it would not be accurate to say that the balance scorecard would be entirely different because efficient operations and satisfaction of the "customers" as they exist is still the goal. The different parts of the balanced scorecard should still work in concert even if they are not equally weighted in terms of performance. Acting in a fashion different than that would not be a good idea (TechTarget, 2014).
Business Process Perspective
Organizations are complex systems with multiple stakeholders. Sometimes the interests of various stakeholders can conflict. For your initial post to this discussion, give an example of a business process where the interests of two (or more) stakeholders are in opposition.
As for what facet could lead to stakeholders being in opposition, one would be how to spent retained earnings and profits. Some people in a company would want those funds diverted to research and development while others would want higher wages and benefits if the higher revenues could be maintained. The shareholders and stockholders may demand higher dividends as a reward for their investment. At the end of the day, the one way to avoid this is to have a definitive business plan and direction so that the general method in which money is spent, invested and diverted is based on the business plan of the company. For example, if one were speaking of Dell, their obvious…
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