MBA 687 - The CASE STUDY-WEEK7

The CASE STUDY-Siemens

YANLIN LIU

0261099
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Using a balanced scorecard framework, outline the financial and strategic organizational

controls used by Siemens to drive management behavior and firm performance. Are the

corporate criteria balanced? Are they yielding desired outcomes for the company?

What is balanced scorecard?

A balanced scorecard is a strategic management performance metric used to identify and

improve various internal business functions and their resulting external outcomes. Balanced

scorecards are used to measure and provide feedback to organizations. Data collection is crucial

to providing quantitative results as managers and executives gather and interpret the information

and use it to make better decisions for the organization. (Balanced Scorecard by EVAN

TARVER)

The scorecard presents managers with four different perspectives from which to choose

measures. It complements traditional financial indicators with measures of performance for

customers, internal processes, and innovation and improvement activities. (Source: Harvard

Business Review)
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The four Balanced Scorecard Perspectives:

 Learning and Growth

The learning and growth perspective looks at your overall corporate culture.

Siemens has more than 60 training facilities around the world. Siemens management

schools around the world aim to improve the management level of global staff and provide a

solid manpower guarantee for local business development and long-term development. Like a

learning engine, Siemens combines the latest leadership concepts with the latest leadership

behaviors, encourages actions with thinking, converts knowledge into behaviors, and enhances

effectiveness with theories.

Siemens Automation Cooperates with Education (SCE)

Comprehensive support for educators and students on the way to Industry 4.0

Teaching made easy! SCE offers teaching material, trainer packages for blended learning

environments to teach/learn topics like PLC programming and convey Industry 4.0

(Digitalization) know-how. Educational institutions benefit from special conditions, support and

partnerships e.g. with WorldSkills.

 Internal Processes

The management needs to apply relevant metrics to its internal processes and analyze

which ones are efficient, and which need to be improved. Their products and services must be

developed according to their customers’ expectations to ensure that they continue to grow. Those

who are in direct contact with customers and the market are able to provide better criteria for

defining these metrics.

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“we remain committed to continuously improving our profitability- even beyond the

margin targets we have defined. where we can’t achieve this with our top+ business excellence

tools alone, we will further adjust our portfolio.” (Annual Report Siemens)

Siemens management has been concerned about internal procedures, resource allocation,

quality control, lead time, inventory and other internal procedures. Has been looking for

innovative ways to make the internal process smoother.

 Customer

The customer perspective focuses on the people who actually buy your products and

services. Employees need to be educated about the importance of building relationships with

customers if they want to gain understanding of their requirements. Customers are the best

sources of identifying whether the products and services are meeting their demands or not. If not,

they will readily turn to competitor’s solutions.

These perspectives provide a thorough picture of what are the important factors that the

company should consider for its growth.

 Financial

Just because we're taking a balanced look at your organization doesn’t mean that we want

to ignore traditional financial measures. Quite the contrary, the financial perspective is a major

focus of the balanced scorecard.

The management needs to provide a realistic picture to its shareholders of its cash-flow

and return-on-capital employed in the short run. It also takes past financial data into

consideration as it helps in forecasting probable risks and costs that may arise. (Yatin Pawar

2017)
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This chart shows how each step leads to the next. Only by continuous innovation and

continuous cultivation of excellent talents, can the company improve the efficiency of internal

links, shorten the internal business cycle, so as to ensure the timely and quantitative completion

of customer orders, timely completion of orders, and guarantee the quality, so as to improve

customer satisfaction and enhance customer loyalty. The more loyal customers, the more sales

the company has, the better the cash flow performance and the higher the rate of return on

investment. Only in this way can a good cycle be formed. Balanced scorecard can really play a

role.

Are the corporate criteria balanced?

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By studying the Balanced Scorecard and the case study of Siemens, I think the company

standard of Siemens is balanced. The answer is yes, the corporate criteria are balanced.

Are they yielding desired outcomes for the company?

Yes, they are yielding desired outcomes for the company. overall, the performance

impact of top+ appeared to be very significant. during the period of investigation from 1998 to

2007, siemens was able to increase sales by 28.7 percent, earnings by 197.3 percent and market

capitalization by 213.9 percent.

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Reference

Balanced Scorecard By EVAN TARVER, Reviewed By THOMAS BROCK (2020)

https://www.investopedia.com/terms/b/balancedscorecard.asp

Yatin Pawar 2017 Understanding Balanced Scorecard and what it represents;

https://upraise.io/blog/understanding-balanced-scorecard/