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Published by: praschauhan on Aug 14, 2010
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Balance scorecard




Today organization are competing in complex environment so an accurate understanding of goals and methods of attaining those goals is vital The balance scorecard provides managers with the instrumentation they need to navigate to future competitive success. The balance scorecard align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. Originated by Dr. Robert Kaplan and David Norton as a performance measurement framework that added strategic nonfinancial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance


Balance scorecard

Four different perspective of balance scorecard


Rockwater several hundred million dollar undersea construction company formed in 1989 by merger between two independent construction company, one British and one Dutch. The first president, Norman Chambers, used the balanced score card, starting in 1992, to unite culture and operating philosophy of two companies and to enable the new company to compete on basis of quality safety and value added relationship with customer. Starbucks corporation hires 200 employees every day and building 4 stores a day. This phenomenal growth could not have been achieved without key ingredient of people, which requires enormous amount of training development of people. The founder chairman and chief strategist Howard Schultz knew that competitive advantage of his brand is found in the equity of his people. Starbucks developed their skills and provided them the enviornment to be the best they can be. People come to starbucks for experience as much as for coffee. It seems that starbucks has based its strategy on the learning and growth of team.



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Why Implement a Balanced Scorecard? Increase focus on strategy and results Improve organizational performance by measuring what matters Align organization strategy with the work people do on a day-today basis Focus on the drivers of future performance Improve communication of the organization¶s Vision and Strategy Prioritize Projects / Initiatives

balanced scorecard?

The balance scorecard as a strategic framework for action Clarifying and translating vision and strategies

Communicating and linking

Strategic feedback and learning

Planning and target setting

Tata Motors Commercial Vehicles Business Unit Consisting of three plants in India, and supported by a nationwide sales and service network, Tata Motors Commercial Vehicles Business Unit (CVBU) manufactures the full range of commercial vehicles, such as 60-seat buses and 6x4 off-road vehicles. With a workforce of over 26,000, CVBU serves over 60% of the Indian market and is one of the top 10 truck manufacturers in the world. The CVBU has a top financial objective of being among the world's top five profitable commercial vehicle manufacturers, which is supported by growth and cost themes and objectives. Scorecard Commencement CVBU began its scorecard implementation in 2000, in support of efforts to reverse several years of poor financial performance. A new strategy, crafted by the leadership team headed by the then new Executive Director (essentially CEO) Ravi Kant focused first on turnaround to be followed by sustainable growth and profitability through being the lowest-cost producer.

The original Strategy Map and Balanced Scorecard was created by putting in place a high-level steering committee, comprising functional heads and some other key officers such as the regional managers in sales and marketing. The committee appointed a core project team of five people (from the Business Excellence Service Department and Executive Director's Office) to facilitate the scorecard creation and deployment process. Critical success factorsThree critical success factors in implementing the Balanced Scorecard. - The active and visible support of senior management - A strong review process -A knowledgeable team to drive and support scorecard deployment -As recognition of its success in 2004 CVBU was inaugurated into the Balanced Scorecard Collaborative¶s prestigious Hall of Fame, one of the first two Asia-based organizations to be afforded this honour.

Financial perspective Between 2001 and 2003 revenues grew by 40% helped its parent, Tata Motors Corporation, turn a US$108.62 million loss into a US$65.17 million profit between 2001 and 2003. For fiscal year ended March 2005 CVBU reported a 25% increase in sales in its domestic market of 25% against industry growth of 22%.

Customer perspective In December 2002 total volume sales of commercial vehicles was 72,612 units, which rose to 104,626 in 2003 - an impressive increase of 44%.

Internal business processing Team members also collaborated with both the CVBU Steering Committee and managers at lower levels to put in place a review process for monitoring and analyzing performance on local Balanced Scorecards. To maintain momentum, CVBU pays close attention to the continuous communication to all employees of the scorecard approach and benefits. And sharing vision, mission, future directions and strategies at a town hall meeting with all employees. Ensuring that all employees have a strong, consistent, understanding of the business units longer-term and shorter-term goals.

Learning and growthBusiness Excellence Service Team Members, who had been trained by external consultants.


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