INTERNAL BUSINESS PROCESS, LEARNING AND GROWTH PERSPECTIVE

1.1 The internal business process valuechain

1) Innovation  the innovaton process consist of two components. In the first,
managersundertake market research to identify the size of the market, the nature of
customer preference, and price points for the targeted product or service. As
organizationdeply their internal processes to meet specific customer needs, having
accurate, valid information on market size and customer preferences becomes a vital
task to perform well. Information on markets and customers provides the input for the
actual product or service design and development processes, the second step in the
innovation process. During this steps, the organization’s research and develpment
group:
- Perform basic research to develop radically new product and services for
delivering value to customer
- Performs applied research to exploit exsisting technology for the next generation
of product and service
- Makes focused development effeorts to bring new product and service to the
market.
2) The operation process  represents the short wave of value creation in organizations.
It starts with receipt of a customer order and finished with delivery of the product or
service to the customer. This process stresses efficient, consistents, and timely
delivery of existing products and services to existing customers. Existing operations
tend to be repetitive so that scientific management techniques can be readily applied
to control and improve customer order receipt andprcessing, and vendor, productin,
and delivery processes. Traditionally, these operating process have been monitored
and controlled by financial measures, such as standard costs, budgets, and variance.
Over time, however, excessive focus on such narrow financial measures as labor
efficiency, machine efficiency, and purchase price variances led to highly
dysfunctional actions, keeping labor and machnes busy building inventory not related
to current customer orders, and switching from supplier to supplier to chase purchase
prise. The influence, in recent years, ofthe total quality management and time based
competition practices of leading japanes manufactures has led man companies to
supplement their traditional cost and financial measurement with measurement of
quality and cycle time. Measurement of operating process quality, cycle time, and
 cost have been developed extensively during the past 15 years. Some aspects of these
measurement will likely be included as critical performance measures in any
organization’s internal business process perspective.
3) Postsale service  the final stage in the internal value chain is postsale cervice.
Postsale service includes warranty and repair service, treatment of defects and returns,
and the processing of payments, such as credit card administration. Companies that
sell sophiscated equipment or systems, like otis elevator know that any downtime on
thier equipment is extremely expensive and inconvinient to their customer.

2.1 learning and growth perspective

- employee capabilities  the emergence of giant industrial enterprises a century

ago and the influence of the scientific management movemet left a legavy where
companies hired employees to perform well specified and narrowly defined work.
Organizational elites, the industrial engineers and managers, specified in detail the
routine and repetitive tasks of individual workers, and established standards and
monitoring systems to ensure that workers performed these tasks just as designed.
Today,almost all routine work has been automated, computer controlled
manufacturing perations have replaced workers for routine machining, processing,
and assembly operations, and service companies are increasingly giving their
customers direct access to transactions processing throughadvanced information
sistem and communications.
- Core employee measurement group
 Measuring employee satisfaction  recognizes that employee morale and
overall job satisfaction are now considered highly important by most
organizations. Satisfied employee are a precondition for inceasing
productivity, responsiveness, quality, and customer service. Employee
morale is especially important for many service business where,
frequently, the lowest paid and lowest skilled employees interact directly
with customer. Companies typically measure employee satisfaction with
an annual survey, or a roling survey in which a specified percentageof
randomly chosen employees is surveyed each amount. Elements in an
employee satisafction survey could include : involvement with decisions,
recignition for doing a good job, access to sufficient information to dothe
 job well, active encouragement to be creative and use initiative, support
level from staff functions, and overall satisfaction with company.
 Measuring employee retention  employee retention captures an
objective to retain those employees in whom the organization has a long
term interest. The theory underlying this measure is that the organization
is making longterm investmentsin its employees so that any unwanted
departures represent a loss in the intelectual capital of the business.
 Measuring employess productivity  is an outcome measure of the
aggregate impact from enhancing employee skills and morale, innovation,
improving internal process, and satisfying customers. The goal is to relate
the output produced by employees to thenumber of employees used to
produce that output.