Professional Documents
Culture Documents
GROUP 4
QUESTION [3]
BALANCED SCORE CARD CAN BE APPLIED WHEN ASSESSING
MANUFACTURING FIRM’S PERFOMANCE. DISCUSS THIS ASSERTION CITING
RELEVANT EXAMPLES. [20 MARKS]
INTRODUCTION
The choice of measures to evaluate the performance of business units is one of the most
critical challenges of several companies. This is due to intense competition, increased
expectations, and augmented customer demand and consciousness (Sroka & Szanto,
2018; Stonkute et al., 2018). Pakurár et al. (2019) emphasized that a performance
measurement system of a firm should integrate different measures for ensuring effective
strategic performance. The Balanced Scorecard (BSC) as performance measure was
developed by Kaplan & Norton in the early 90’s which includes both financial and non-
financial measures. The main purpose of the scorecard is to collect information in order
to keep organizations’ focus on their objectives and create suitable methods to compare
and to improve their performance.
According to Kaplan & Norton (1996a), the balanced scorecard is derived from an
organizations vision and strategy and view organizational performance from four
perspectives which are
i. Financial
ii. Customer
iii. Internal Business process
iv. Learning and growth.
Together, these elements create value, leading to customer and stakeholder satisfaction
and good financial performance. The balance scorecard can therefore be applied when
assessing manufacturing firms’ performance. A balanced scorecard is strategic
management performance metric that helps companies identify and improve their internal
operations and achieve their external outcomes. It measures past performance data and
provides organisations with feedback on how to make better decisions in the future.
An example of Dairiboard Zimbabwe Private Ltd financial perspective using the BSC in
assessing its performance.
In the above example the company targeted to lower cost to revenue ratio to less than
10% was achieved given the actual is 9%. This shows that the initiatives introduced were
fruitful as the business BSC has becomes efficient thereby improving its profitability.
CUSTOMER PERSPECTIVE
The customer perspective monitors how the fir is providing value to its customers and
determines the level of customer satisfaction with the firm’s products. Customer’s
satisfaction is an indicator of the company’s success thus how well a company treats its
customer can obviously its performance thereby profitability. In a manufacturing firm,
customers can be given a platform to provide feedback about their satisfaction with
current products. It enables the firm to step out of its comfort zone to view itself from the
customer’s point of view rather than just from an internal perspective which enhances its
performance. Performance in the manufacturing of soft drinks “Coca-Cola” can be
assessed by improving product quality from analysis, the trend of customer taste and
preferences. Enhancing the customer shopping experience by making the bottle of the
drink handy and quantity which is ideal and pricing adjusted to suit consumer
preferences.
The Coca Cola Company customer perspective using BSC model
In the above model the Coca Cola’s customer perspective focused on the objective of
having a high average customer rating and quality products. The company’s target was to
increase sales by 15% and the actual is 20% this shows that the initiatives was effective
enough and it even surpass the target.
In the aspect of internal process perspective Delta beverages Pvt ltd highlighted reduce
rework and workload as its objective and units used to measure was number of re-work
per unit time, with a target of less than 5% and the actual was 4%. This shows that the
BSC enables the company to establish a position that their initiative of total quality
management programs was effective since It ranges within target.
THE LEARNING AND GROWTH PERSPECTIVE
This perspective is related to intangible drivers of organizational performance. It focuses
on human capital, information capital an organizational capital. The objectives of
learning and growth perspectives are an assessment of skills, talent and knowledge,
information about safety system infrastructure investment and data protection system.
Updates to staff engagements, employee alignment, knowledge management and
teamwork. For a manufacturing firm like the Coca-Cola company latest technologies
should be used for a competitive advantage within the industry.
The Learning and Growth of Coca Cola company for using the BSC model
From the learning and growth perspective the Coca cola company targeted more than
60% with an objective of equipping their staff with modern tool for productivity and they
attained a 100% actual. This shows that Coca Cola Company identified correct and latest
technical tools of trade which suited their business strategy as far as leaning and growth
perspective is concerned.
Kaplan, R.S., & Norton, D.P (1996a). The balanced scorecard: Translating strategy into action.
Harvard Business School Press, Boston, MA.
Pakurár, M., Haddad, H., Popp, J., Khan, T., & Oláh, J., (2019). Supply chain integration,
organizational performance and balanced scorecard: An empirical study of the banking sector in
Jordan. Journal of International Studies, 12(2).