Академический Документы
Профессиональный Документы
Культура Документы
T
The balanced scorecard has been a widely used sup- number of benefits, particularly regarding overall productivity
ply chain performance measurement tool because it and profitability, despite some limitations.
can enable distinct competitive advantages. Busi- Globalization and changing customer requirements are
ness, industry, government and nonprofit organi- forcing industries to adapt new and efficient manufacturing
zations use it extensively to monitor organizational practices, often changing their traditional ways of business
performance, improve internal and external com- to remain competitive. Unlike much of the Western world,
munication and streamline the enterprise’s vision and mission. which in the last few decades has adopted a “supply chain vs.
Since its introduction in the late 20th century, research- supply chain” mentality, companies in subcontinent India have
ers have investigated the advantages and disadvantages of this yet to leverage the supply chain for competitive advantages.
integrated approach. Evidence reveals that implementing bal- This must change, as multinational companies are fully ex-
anced scorecards as a performance measurement tool has a ploiting their supply chains and, in the digital age, even mov-
monitor the results of strategy implementation more easily, ex- perspective, reductions in distribution, inventory and ware-
plained Chi-Bing, Bao-Guang Chang and Chung-Jen Fu in house costs, according to “Performance Evaluation in Supply
“Evaluating the Effectiveness of a Balanced Scorecard System Chain Using Balanced Scorecards.” That 2014 research by P.
Implemented in a Functional Organization,” published in the Mathiyalagan, K. Tamil Mannan and P. Parthiban was pub-
Journal of International Management Studies. lished in the International Journal of Advances in Mechanical & Au-
They described how the balanced scorecard concept can tomobile Engineering.
be implemented in many ways, although the system must Companies ultimately want to succeed against their com-
be adapted to fit each specific organization. A good score- petition, increasing the enterprises’ value for shareholders and
card reflects the strategic plan of the organization, provides a employees. This can happen through one of two basic ap-
framework that helps shape work behavior, allows each person proaches: productivity improvement or revenue growth.
to measure individual performance and gives data to make The essential components of productivity improvement in-
changes immediately so that performance is enhanced. As clude cost reduction by lowering direct and indirect expenses,
mentioned earlier and shown in Figure 1, the balanced score- along with the efficiency of financial and physical utilization.
card framework covers four different perspectives: financial, Revenue growth includes generating more revenue and in-
customer, internal business process and learning and growth. come from existing customers, from existing products sold in
new markets and from creating new products for new markets,
Show us the money Kopecka’s piece reported.
The financial perspective seeks to answer what financial stake- According to R. Rajesh and the coauthors of “Generic Bal-
holders expect or demand. anced Scorecard Framework for Third Party Logistics Service
The driving factors in this perspective will be customized Providers” in the International Journal of Production Economics,
to the organization. According to Ayesha Farooq and Zareen financial performance strategies indicate whether implement-
Hussain, the most common performance measures are return ing a company’s strategy effectively improves the bottom line.
on investment (ROI), cash flow, net operating income and Financial goals are to survive, succeed and prosper. Survival
revenue growth, as they wrote in “Balanced Scorecard Per- is measured by cash flow, success by growth in sales and op-
spective on Change and Performance: A Study of Selected erating income and prosperity by increased market share and
Indian Companies,” published in Procedia Social and Behavioral return on equity and capital employed.
Sciences.
The financial perspective represents FIGURE 1
the long-term goal of organizations to
provide superior returns based on the
capital invested. Financial measures have
Four eyes on the prize
been the traditional method of analyz- The balanced scorecard framework covers four different perspectives: Financial,
ing organizational success, involving ele- customer, internal business process and learning and growth.
ments such as profitability, sales growth
Financial
and revenue per sales visit. It is important
for organizations to know from where What do our financial
they get money and how they invest these stakeholders expect
or demand?
funds, although financial indicators do
differ from company to company.
However, companies often make the Customer Internal process
mistake of focusing too much on finan- Who are our target Balanced What business
cial indicators, totally or partially ignor- customers? What are their scorecard processes must we
ing other perspectives, as Ivanov and expectations and what is excel at to drive value
strategy
Avasilcai wrote in their 2014 paper. Still, our value proposition in for our customers?
timely and accurate funding data will al- serving them?
ways be a priority, and managers should
do whatever necessary to provide it. Learning and growth
Various financial subfactors include How do we align our
market share, sales growth by year or intangible assets to
quarter, net profit margin, reduction in improve our ability to
manufacturing cost and, especially im- support our strategy?
portant from a supply chain management
spective identifies key operational processes in which the or- In the process of communicating this perspective to em-
ganization must excel. It is interesting to note that Kaplan and ployees, Kopecka’s 2015 paper maintained that company
Norton emphasized that the market must not be overlooked: management should link three groups as follows: (1) Human
“Internal measures to the BSC [balanced scorecard] should be resources, which focuses on development strategy competen-
derived from those business processes that have the largest im- cies and works to attract and retain top talent; (2) information
pact on the customer.” technology, which provides applications that support the strat-
A. Malgwi and H. Dahiru shared the view of Kaplan and egy, along with developing customer data and information
Norton and identified three process value chains that compa- systems; and (3) organizational culture and alignment, which
nies should apply their internal process perspectives to. In their creates customer-centric culture, aligns employee goals with
paper “Balanced Scorecard Financial Measurement of Orga- corporate success and shares knowledge about best practices
nizational Performance: A Review,” which was published in and customers.
the IOSR Journal of Economics and Finance, Malgwi and Dahiru The learning and growth perspective consists of employee
identified those three value chains as the innovation, opera- skills, training and administration of routine processes. In
tions and post-sales service processes. other words, according to Zeynep Tugce Kalender and Ozalp
In the innovation process, managers research the needs of Vayvay in “The Fifth Pillar of the Balanced Scorecard: Sus-
customers and then create the products or services that best tainability,” which was published in Procedia – Social and Be-
meet those needs. The operations process represents the short havioral Sciences, this perspective focuses on internal skills and
wave of value creation. It is concerned with producing and de- capabilities in order to align them to the strategic goals of the
livering existing products and services to customers. The post- organization.
sales service process represents the final item in the process Kaplan and Norton identified two major enabling factors
value chain for the operations process perspective. It focuses for this perspective to be actualized. The first is to increase
on how responsive the organization is to the customer after employee capabilities by ensuring that every employee is able
the product or service has been delivered. After-sale services to deliver a service that puts the company in the best position.
include warrantee and repair activities, treatment of defects Strategic measures to achieve this include constant training,
and returns, administration of customer payments and resolu- helping staffers adopt new ways and making them attend in-
tion of customer problems and complaints. ternal and external workshops and seminars on new trends.
A review of the internal process perspective surfaces the Second, Kaplan and Norton emphasized, increase motiva-
facts that enterprises should decide on what processes and tion, empowerment and alignment. The focus here is to con-
competencies they must excel at and specify measures for each sider individual goals when formulating organizational goals.
of them. Improving the quality of products, innovating new Strategic measures to align these goals include training exist-
products, customer satisfaction, on-time delivery of goods and ing staff to acquire new knowledge and welcoming individual
services to customers all play a dominant role in the internal suggestions on ways to improve products and processes or de-
process perspective. velop newer and better ones.
A review of this perspective clearly concludes that employee
Learning and growth perspective participation plays a major role in effective organizations. In
The learning and growth perspective seeks to answer the fact, this perspective is the backbone to a successful scorecard
question: To achieve our vision, how will we sustain our abil- because it involves employee skills and information systems.
ity to change and improve? As Farooq and Hussain’s 2011 Employees and their skills are important not only for their spe-
research in Procedia Social and Behavioral Sciences asserted, the cific tasks, but also for their creativity and ability to develop
learning and growth perspective deals with employee satisfac- new ideas.
tion, alignment of employee skills with jobs, the number of
employee suggestions implemented and the hours taken for An (almost) wide world adoption
employee training. The balanced scorecard has evolved from its early use as a sim-
Ivanov and Avasilcai’s 2014 research asserted that the need ple performance measurement framework to a full strategic
for employee knowledge, skills and abilities can be important, planning and management system. It plays a wide role as a
especially when new technologies and processes come to the performance improvement tool in industries, business, health-
market. A company’s ability to innovate, improve and learn care organizations, educational institutions, government and
corresponds directly to a company’s value. Continuous learn- nonprofit organizations.
ing processes with innovation can bring about efficiency in The Gartner group suggested that more than 50 percent
an enterprise’s operating domain. The learning and growth of U.S. firms have adopted the balanced scorecard, and more
perspective aligns employee incentives and rewards with the than half of the major companies in Europe and Asia are us-
strategy. ing balanced scorecard approaches, with an upsurge of ap-