Week 22

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

Balanced Score card is used to check how the strategy obtained can be applied throughout the organization. It can be used by managers to make sure whether employees are executing the task properly or not (Pro.N,2013). Some of the benefits of using Balance Score card are as follows:

• Provides a comprehensive view of the whole organization
• It drives changes in organizational behavior/ performance
• It gets everyone focused and aligned to the organization’s strategy
• People will use it & support it because people support what they help build
• It allows effective communication of strategy throughout the organization
• It captures the value of business both tangible & intangible
• It adds discipline and structure to the day-to-day organizational operations
• It is very flexible and adaptable

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

20 important KPIs of Balanced Score Card are:

Financial Perspective:

•  Return on Capital
• Economic value added
• Sales growth
• Cost reduction
• Cost of goods sold

Customer Perspective:

• Customer satisfaction
• Customer retention
• Acquisition of new customers
• Concern classification
• Average resolution time
• Customer service chart count

Internal Perspective:

•  Manufacturing cost
• Job turnover
• Product quality
• Stock turnover and inventory management
• Average order size

Future Perspective:

•  New product development record
• R&D core competencies
• Employee retention
• Employee profitability

3) Present your thoughts and understanding on the article “The Strategic Management process”

In a hyper competitive marketplace, companies can operate successfully by creating and delivering superior value to target customers and constantly adapting to changing business environment. So to meet changing conditions in their industries, company must develop long-term strategies. Strategic Management is required to create competitive advantage and to guide company successfully through all changed in the environment (I. o. C. A. o., 2010).

Although strategic management has 7 stages but it can be summarized in 5 different stages that are:

•  Setting Vision and Mission
• Setting objectives
• Creating a strategy to achieve the objectives
• Implementing the chosen strategy effectively.
• Evaluating performance and add corrective measures

References

pro, N., 2013. Balanced Score card Kenya. [Online]
Available at: http://balancedscorecardkenya.com/why-balanced-scorecard/
[Accessed 2013].

Lynch,R (2012) Strategic Management 6thed. Chapter 13

India, I. o. C. A. o., 2010. Strategic Management. New Delhi: Sahitya Bhawan Publications.