Prepare a financial balanced score
Balanced scorecard Assignment (3% of course grade):
The four perspectives of the balanced scorecard ((learning and growth perspective, business process perspective, customer perspective, and financial perspective).
Example of Balanced Scorecard provided in this module
Assignment Overview: In this assignment you will develop a balanced scorecard to measure the major factors that should be tracked to ensure successful implementation of your strategy recommendations. The scorecard will be incorporated into this final draft of the business plan.
Assignment Objectives: The first objective is to develop a scorecard that will measure the critical components of your business strategy–those items that must be monitored to ensure successful implementation of your proposed strategy.
The second objective is to develop a comprehensive, fully edited draft of the business plan for your client company to enter into and market its product/service within the selected country.
EDITING REQUIREMENT: Note that you now have a recommended entry strategy and entry country, and your client is looking to see how that strategy fits the opportunities and threats in this new country. .Therefore, you must edit your plan so that what you have analyzed about your country, industry, competitors, ties directly to the recommended country and strategy:: Specifically, when you identify risk mitigation strategies (section 10) or opportunity exploitation strategies (section 11), you must also state how (or to what degree) your recommended entry strategy will be able to realize those strategic objectives. Similarly, when you identify what is needed in country for your client (section 2) if the recommended country falls short in meeting those needs (a country threat) you explain how your strategy will mitigate that country threat. Throughout the plan, specify and strengthen the tie between your analysis and the recommended country and entry strategy. Make it more focused on that final recommended strategy, building the logical case for how you arrived at that strategy.
Assignment Requirements: Read, edit, and trim your draft Business Plan, covering all sections 1-17 into a smoothly flowing final draft that explains and supports the recommended entry strategy. The Balanced Scorecard (section 16 ) should flow logically from, and reflect the key components of, your business plan strategy. The BSC will be an appendix to the plan, but must be explained in text.
Incorporate all previous feedback into the draft and aim for a document of approximately 40 pages, to be further trimmed in the final version next week. Keep all support tables and charts in appendices. The Scorecard only will be graded this week, but faculty will provide as much feedback as possible on the entire draft, in order for the team to incorporate into your final version next week.
Balanced scorecard (BSC)
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A balanced scorecard (BSC) is a method of analyzing organizations and creating strategies to meet organizational goals. Balanced scorecards align an organization’s goals and strategies with many performance measures and other factors such as customer satisfaction, financial performance, internal efficiency, and innovations. By setting targets and analyzing performance in these categories, organization leaders can assess whether the group is meeting its goals and make informed decisions about how to correct any problems within the organization.
First popularized in the early 1990s by Drs. Robert Kaplan and David Norton, balanced scorecards underwent a long process of refinement in the next few years. By the twenty-first century, the third major version of the balanced scorecard system became a major management tool in organizations around the world. Many kinds of organization, including businesses and industries, government offices, and nonprofit groups, employ balanced scorecard methods.
History of Balanced Scorecards
In the early 1990s, Dr. Robert Kaplan of Harvard Business School and Dr. David Norton began studying and writing about various methods of measuring performance in businesses and other organizations. The researchers noted that many traditional methods were critically flawed and ineffective. Some approaches were too vague or subjective. Others focused only on the financial bottom line and left out all the other details of business.
Kaplan and Norton began searching for more effective alternatives. They developed a new method of performance measurement referred to as a balanced scorecard. The balance in the term refers to carefully weighed interactions between financial factors (traditionally favored in performance measurements) and non-financial factors (previously overlooked elements such as goals and strategies). The researchers claimed that balancing these elements would give leaders comprehensive insights into the successes and failures of their organizations.
Although balanced scorecards became popular in the early 1990s, their roots reach back farther. Kaplan and Norton may have drawn inspiration from the self-assessment endeavors of several firms, such as Analog Devices, in the mid-1980s. Some elements of balanced scorecards may even be traceable to General Electric performance reports from the 1950s, or even to a French measurement system known as Tableau de Bord (Dashboard) whose elements date back to the early 1900s.
Measures and Perspectives
A balanced scorecard is based on an assortment of interrelated organizational elements. Scorecard users analyze these elements and set targets for how an organization will address each element to meet its overall goals. In time, performance reports can be matched against the targets to help analyze how well or poorly the organization is proceeding toward its goals.
Among the most important factors on a balanced scorecard are the vision and strategy of the organization’s leaders. The vision and strategy must take into account many other factors, including the knowledge of leaders and workers; the innovations used in training, research, and planning; the efficiency demonstrated in the internal workings of the group; the satisfaction of customers and other stakeholders; and the financial performance of the group. All of these factors are interconnected and must be addressed properly to ensure the overall success of the organization.
The balanced scorecard also acknowledges a number of perspectives through which various data and measurements must be assessed. These perspectives help to ensure that the parts of an organization all work together to benefit people inside and outside the organization. Some important perspectives relate to the ongoing learning and training of organization members; how effectively an organization operates on a daily basis; whether the organization is financially feasible; and how customers and stakeholders perceive the organization and its work.
Development and Uses
The first balanced scorecard system, as proposed by Kaplan and Norton in the early 1990s, was a relatively simple framework for performance measurement. This framework used a limited variety of measuring criteria that was analyzed through four main perspectives: financial, customer, internal processes, and learning and growth. This early version, known later as the first generation, contained the essential elements of a balanced scorecard, but was still unrefined. Many users found the available measures and perspectives too narrow to fit a wide range of organizations and goals, or had difficulty choosing appropriate measures or targets. For these reasons, many early balanced scorecards were unsuccessful.
In the mid-1990s, second generation balanced scorecards resolved some of the weaknesses of the initial version. The new scorecard design provided clearer objectives to help leaders choose the best targets and goals. It also included a Strategic Linkage Model (or Strategy Map) to assist leaders in choosing performance measures and justifying their choices.
About 2000, a third generation appeared. It offers users greater ease of implementation and more focus on planning stages. Through improved planning, leaders may find better ways to choose and agree upon common goals and strategies, as well as set shared targets and measures. This generation of balanced scorecards has proven more successful than its predecessors and has become widely used.
Advances in the balanced scorecard system have turned it from a passive academic analysis into a dynamic tool that helps leaders create and implement strategies in the daily life of an organization. Users report that balanced scorecards may help organizations form and carry out plans; align shared goals and strategies within an organization; better maintain finances and customer relationships; and gather feedback on an organization’s progress.
In the twenty-first century, balanced scorecards have become one of the most influential management tools in the world. More than 50 percent of large firms in the United States, Europe, and Asia employ balanced scorecard methods. The system is also gaining popularity in many African and Middle Eastern nations.
Criticism of Balanced Scorecards
The balanced scorecard method has been criticized on several different points. The academic community has criticized Kaplan and Norton for not citing any earlier papers in their original publication. Meanwhile, the method itself has been criticized for not providing any conclusions, recommendations, or synthesis of the data; it is simply a list of metrics. Some critics have also pointed out that these metrics can be subjective and hard to quantify. Finally, balanced scorecards have been criticized for prioritizing the needs of financial stakeholders above all else, which is not necessarily a detriment to their use in traditional commercial organizations, but makes them a poor fit for nonprofits and other such organizations where the financial bottom line may not be the primary concern. Some companies, however, have used the framework of balanced scorecards while altering the categories to better fit their organization’s needs.
“Balanced Scorecard Basics.” Balanced Scorecard Institute Strategy Management Group. Balanced Scorecard Institute, a Strategy Management Group Company. Web. 26 Jan. 2015. balancedscorecard.org/Resources/About-the-Balanced-Scorecard
De Flander, Jeroen. “Six Crucial Facts about the Balanced Scorecard.” QPR, 12 May 2016, www.qpr.com/fi/node/684 Accessed 31 Oct. 2016.
Kaplan, Robert S. and David P. Norton. “Using the Balanced Scorecard as a Strategic Management System.” Harvard Business Review. Harvard Business School Publishing. Jul. 2007. Web. 26 Jan. 2015. https://hbr.org/2007/07/using-the-balanced-scorecard-as-a-strategic-management-system
Wahyuningsih, Mariette. “How Apple Uses the Balanced Scorecard.” Performance Magazine, 24 Mar. 2016, www.performancemagazine.org/apple-uses-balance-scorecard.
“What Is a Balanced Scorecard?” 2GC Active Management. 2GC Limited. 2014. Web. 26 Jan. 2015. http://web.archive.org/web/20140620093448/http://2gc.eu/files/2GC-FAQ1-What‗is‗a‗Balanced‗Scorecard‗140616.pdf
Wilhite, Tamara. “Balanced Scorecard Pros and Cons.” ToughNickel, 23 Apr. 2016, toughnickel.com/business/Balanced-Scorecard-Pros-and-Cons. Accessed 31 Oct. 2016.