Q1.The Balanced Score Card is a framework for integrating measures derived from strategy. Take an Indian company which has adopted balance score card successfully and explain how it had derived benefits out of this framework.
The Balanced scorecard
The Balanced Score Card is a framework for integrating measures derived from strategy. While retaining financial measures of past performance, the Balanced Score Card introduces the drivers of future financial performance. (Figure 1) The drivers (customer, internal business process, learning & growth perspectives) are derived from the organization’s strategy translated into objectives and measures.
The Balanced Score Card is more than a measurement system it can be used as an organizing framework for their management processes. The real power of the Balanced Score Card is when it is transformed from a measurement system to a management system. It fills the void that exists in most management systems – the lack of a systematic process to implement and obtain feedback about strategy
The Balanced scorecard
The Balanced Score Card is a framework for integrating measures derived from strategy. While retaining financial measures of past performance, the Balanced Score Card introduces the drivers of future financial performance. (Figure 1) The drivers (customer, internal business process, learning & growth perspectives) are derived from the organization’s strategy translated into objectives and measures.
The Balanced Score Card is more than a measurement system it can be used as an organizing framework for their management processes. The real power of the Balanced Score Card is when it is transformed from a measurement system to a management system. It fills the void that exists in most management systems – the lack of a systematic process to implement and obtain feedback about strategy
In India few noted organizations have adopted Balanced Score Card successfully. The commercial vehicles business unit (CVBU) of Tata Motors was among the first Asian organizations to be inducted into the prestigious Balanced Scorecard Hall of Fame, in recognition of its exemplary success with the model. The company is one of the world’s top 10 truck manufacturers and the CVBU began deployment of Balanced Scorecard in 2000, in an attempt to remedy years of poor financial performance. The focus was on achieving a turnaround, and then progressing to sustainable growth. Within 2 years of implementation, the company began to show tangible improvement in performance including a 40% growth in revenue.
The implementation of the Balanced Scorecard has enabled them to focus on different elements of operational performance. Defining, cascading and communicating strategies across the organization have brought about transparency and alignment. The scorecard incorporates SQDCM (Safety, Quality, Delivery, Cost and Morale) and VMCDR (Volume, Market Share, Customer Satisfaction, Dealer Satisfaction and Receivables).
In India few noted organizations have adopted Balanced Score Card successfully. The commercial vehicles business unit (CVBU) of Tata Motors was among the first Asian organizations to be inducted into the prestigious Balanced Scorecard Hall of Fame, in recognition of its exemplary success with the model. The company is one of the world’s top 10 truck manufacturers and the CVBU began deployment of Balanced Scorecard in 2000, in an attempt to remedy years of poor financial performance. The focus was on achieving a turnaround, and then progressing to sustainable growth. Within 2 years of implementation, the company began to show tangible improvement in performance including a 40% growth in revenue.
The implementation of the Balanced Scorecard has enabled them to focus on different elements of operational performance. Defining, cascading and communicating strategies across the organization have brought about transparency and alignment. The scorecard incorporates SQDCM (Safety, Quality, Delivery, Cost and Morale) and VMCDR (Volume, Market Share, Customer Satisfaction, Dealer Satisfaction and Receivables).
