Week 22

1.What is your understanding on the Balanced Score Card approach? How useful for the Companies?

The Balanced Score Card is a strategic approach which helps an organization to connect the space between strategy and actions, engage a broader range of users in organizational planning, reflects the most important aspects of the business and respond immediately to progress, feedback and changing business conditions. (thebalancescorecard.com)

It was developed by Robert Kaplan and David Norton in 1992. It helps an organization to simplify the vision and mission and turn into action. The organization applying the BSC approach are likely to have dynamic management system and focus on future potential success with best developed strategy.

Balance Scorecard embrace four different perspective from which the activities of a company can be evaluated:

        i.            Financial perspective: This includes return on investments and shareholders' value.

      ii.            Customer perspective: It measures the customer's satisfaction and the company's image in the  market.

    iii.            Internal business process: This includes to focus on the internal business process and its efficiency.

    iv.            Innovation and learning: This involves employees' ability, innovation, technological trends and overall ability to adapt, change and improve.

The uses of Balance Scorecard

·         It is a great strategic tool which many companies has been applying now a days.

·         It helps to turn the strategy into action.

·         It is helpful to overcome the problems faced and to learn from mistakes.

·         It is useful to create communication from top to bottom members of an organization.

·         It is used to organize intangible asset such as customer loyalty.

2. Identify and list the 20 important KPIs of Balanced Score Card

 The 20 important KPIs of BSC are:

1.             Return on capital (ROCE)

2.             Sales growth

3.             Cost reduction

4.             Customer loyalty

5.             Customer satisfaction

6.             Manufacturing cost

7.             Acquisition of new customers

8.             Product quality

9.             New product and development record

10.          Market share

11.          Superior technology

12.          Efficiency of assets

13.          Employee retention

14.          Labor productivity growth

15.          Average product-output ratio

16.          Expenses on research and innovation

17.          Number of registered patents

18.          Investments in exploration of new markets

19.          Total assets holdings

20.          Efficiency of sales volume

References:

BSC Designer. List of sample KPIs in 5 perspectives of BSC. Available at: http://www.bscdesigner.com/list-of-sample-kpis-in-5-perspectives-of-bsc.htm.[Accessed 15th December 2013]

The Balance Scorecard What is Balance Scorecard? Available:  http://thebalancedscorecard.com/what_is_bsc.htm [last accessed 15th December 2013]