The Balanced Scorecard is often used as an analytical tool to evaluate organizat
ID: 369853 • Letter: T
Question
The Balanced Scorecard is often used as an analytical tool to evaluate organizational performance. Please review the text on this topic as well as the charts and illustrations. The Balanced Scorecard approach encompasses four different perspectives of the organization. All four perspectives are important and interrelated. Ultimately, any sound strategic plan should address all four perspectives. However, the bottom-up structure of how value is driven also provides a framework for building strategy. For example, value is only realized when something is sold to a customer. What is involved in this economic transaction and how can more be executed, at a higher margin? This is then pushed back into internal processes for improving customer processes and increasing efficiency of internal processes. This then is translated into how employees execute their job functions and improve their capabilities. If all of this is executed well, financial performance is improved. Starting with the value chain, how does StilSim generate value? (Or how might they in the future?) Push these ideas back into the BSC strategy map to determine what supporting strategies emerge. Operational Strategies Operational Strategies address how you plan to deploy (or redeploy) resources within the organization. You may be able to identify 8-12 different options for operational strategies for StilSim. These strategies are lower down than generic or corporate strategies and deal with the day-to-day operations of the company. Operational strategies could fall within any of the four basic areas of the Balanced Scorecard (BSC), ie., internal processes, customer, innovation and financial. In many instances they may overlap or support each other. Also address the following questions for this discussion: What are some of StilSim’s options with regard to operational strategies? Can you identify specific operational strategy options for each of the four Balanced Scorecard areas?
Explanation / Answer
What are some of StilSim’s options with regard to operational strategies?
The operational strategies of StilSim with respect to customer and internal processes are:
StilSim has been in business for the past 25 years and hence have very good customer base. The options that StilSim has are to increase the relationship with the customers to improve on sales. This in turn is based on the workforce of the company. The company needs to have skilled and talented employees to retain the existing customer base by building rapport and then to target at converting the leads into sales thereby increasing new customers. Since the company has been in business for the past 25 years, the customers trust StilSim which in turn leads to trusting of the employees.
Can you identify specific operational strategy options for each of the four Balanced Scorecard areas?
The four Balanced Scorecard areas are: internal processes, customer, innovation and financial.
Internal processes – Adequate training needs to be provided by StilSim in order to handle the customer base effectively. Since the company has been in the industry for the past 25 years, training needs to be provided to employees to effectively handle the customers to avoid switching to other brands. The client response rate is very slow and this has to be improved via training.
Customer- The customer is the lifeblood of the organization. The customers need to be educated about the changing trend in the organization. The respect and recognition given to them will make them be loyal customers.
Innovation- Innovative products needs to be developed to meet the changing trend in the market. Technology usage needs to be implemented in marketing the products as well since they are lagging behind in their current techniques.
Financial- The value realized is the financial returns. Every area in the organization needs to changed and people needs to be encouraged to accept the change so that the company can reap more profits by successfully running the business.
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