ACCOUNTING The Balanced Scorecard-Measures that Drive Performance By Robert S.Ka

Question

ACCOUNTING

The Balanced Scorecard-Measures that Drive Performance

By Robert S.Kaplan and David P. Norton

FROM THE JANUARY- FEBRUARY 1992 ISSUE

(1) Customer perspective: How Do Customers See US?

Other Measures for the Customer's Perspective

ECI'S Balanced Business Scorecard

(2) Internal Business Perspective: What Must We Excel at?

Other Measures for the Internal Business Perspective

(3) Innovation and Learning Perspective: Can We continue to Improve and Create Value?

(4) Financial Perspective: How Do we look to Shareholders?

How one Company used a Daily Financial Report to Improve Quality*

Please write 2 pages of the 4 statement above. Write your own ideas don't copy and paste.Just write your thoughts and what you learn from them.Just summarize the notes for that four statement.

Thanks

Explanation / Answer

(1) Customer perspective:

The customers and the market segments in which the company competes are identified in this stage. Also, the means through which value is provided to these customers are identified. Indicators are identified which differentiate customers and markets from one another. These indicators vary from customer to customer or market segment. Some measures of customer perspective are on time delivery, on site service, after sales support, defects per order. Apart form all of these the companies must keep its eye open to be sensitive enough to the cost of their products. By meeting the cutsomer expectations, measures such as customer satisfaction and retention are achieved.

(2) Internal business perspective:

The objectives defined at the customer and financial perspective stage are achieved through processes and activities that the companies identify in this stage. The emasures for internal business perspective should be developed based on the processes that have the greatest impact on customer satisfaction. The companies should decide on what processes they must excel at. The measures should link the top management's judgement about key internal processes. This enables the employees at a lower level to have a clarity about their target actions and decisions. Some of the measures are cycle time unit cost yield for measuring manufacturing excellence, actual introduction schdule as compared to the planned schedule for a product newly introduced.

(3) Innovation and Learning perspective:

The activities and infrastructure necessary to achieve the goals set in the other three perspectives are determined by the companies. the targets for success are never constant and to keep up with the pace of the fast chanding world, the targets are also often revised. To sustain the global competition, the companies must make continual chnages to the existing products and processes and must be able to introduce new products. Innovation and learning stem from employee capabilities, information system capabilities,motivation from the organization. Some of the meassures include the time taken to develop the next generation, process time to maturity.

(4) Financial perspective:

Financial performance meaures indicate whether the company's strategy, implementation and execution are helping in the generation of revenues and earnings for the company. Some critics believe that rather than focussing on financial measures, making fundamental changes to the operation will take care of improvement in financials as well. However, if improved operations do not result in an improvement in financials, the strategy is to be reexamined by the officials. The companies should understand and be able to communicate how improved quality, lead time and customer satisfaction can lead to increased market share and operating margins. The challenge lies in the ability to create a link between the operations and the financials.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.