A Balanced Scorecard for Strategic Growth

Economic markets of today are no longer locally supported and our economy is a reflection of globalization of the market. Moreover in the pursuit of finding a method to be successful in the new market businesses are implementing specific strategies to expand their reach. Undeniably, economic prosperity does not come without strategic planning and coordination of many compound interacting elements. Moreover, there must be a system of measurement, which provides quantifiable results, which business owners can refer to in pursuit of economic stability and growth. A balanced scorecard organizational approach provides this through measuring performance from four viewpoints learning and growth which ensures employees are exceptionally qualified, business processes review which allows for increased efficiency, client satisfaction, and a financial standpoint allowing for effectual use of company funding. Therefore, developing an effective balanced scorecard is an essential implement for developing organizations searching for a concrete method for efficient economic development and richness. This initially begins with strategy and quality employee interaction with clientele.

Consequently, to generate an organization that fosters increased physical and economic development you must have managers and employees ready for an unpredictable work environment. Therefore, the first pillar of an effective balanced scorecard within an organization begins with learning and growth geared towards strategy development and internal improvement. Strategy development begins with information gathered about the competitive environment. Therefore, learning is necessary so that “Business units devise customized scorecards to fit their mission, strategy, technology, and culture” (Shaw, 1995). This makes the balanced scorecard applicable to a variety of growing businesses and organizations. Additionally, as a strategy is developed, employee education must occur as well. Likewise, “Ensuring your employees have the most recent knowledge and skills must become a non-negotiable item throughout the organization” (Hart, n.d.). Employees are the representation of employers therefore staff must be well versed in all aspects of company policy and product information. This further ensures product sales and a continued relationship with consumers over the long hall. Moreover, complete training of employees leads to greater employee satisfaction and retention. Additionally, a highly skilled and competent staff, which is aware of necessary changes to existing work procedures, is invested in the company and care about improved results. Furthermore, the balanced scorecard allows for continued evaluation of employees and their individual performance. In the past employees were evaluated primarily according to financial improvement, “However, in the current globalized and highly competitive environment, maintaining long-term competitiveness requires companies to engage in overall strategic planning and performance evaluation” (Ming-Hon, 2007). Through statistical evaluation and focused surveys, a balanced scorecard provides a detailed evaluation, which considers all aspects of employee improvement while considering the new economic environment. Overall improved employee performance creates a work environment with more worth and fluidity of business practices.

Obviously without efficient business procedures productivity could not be maximized to ensure organizational growth. In fact, organizations' productivity can be measured by their adeptness. Certainly, business efficiency begins at the managerial level and, “The BSC aims to integrate intangible assets in the management system in a more efficient way” (Van Grembergen and Van Bruggen, 1997). Due to the information gathered about these intangible assets through statistical research management can strategically coordinate employees so that the organization as a whole can run more efficiently. Furthermore, “The research approach uses the Balanced Scorecard as a framework for developing goals, hypotheses and metrics for each project” (Kampschroer and Heerwagen, 2005). This creates an environment in the workplace that values the input of employees to improve work procedures. Moreover, as the market for a product changes an organization must be agile and change in accordance with current economic conditions fittingly. Therefore, reviewing business processes as suggested by the second perspective of a balanced scorecard will definitely have a positive impact on a growing organization. Reviewing current procedures leads to improvement by, “cutting complicated procedures that no longer make sense, and adding procedures to create clarity” (Barrow, 2010 ). The benefits of creating an environment for increased turnover can translate into increased merchandise production, improved profit, and ultimately improved product quality. Obviously which are all extremely desirable results that lead to continued structural growth for an enterprise. However the ladder, product quality can be considered perhaps the most looked-for when growing an enterprise because of its effects on the satisfaction of those consuming the product. Without a good quality product that fulfills the needs of clients well; success and continued development would not be possible.

This is why a thorough review of client satisfaction is essential to developing an effective balanced scorecard. With the balanced scorecard “Business units establish an integrated model of a service-delivery system, customer relationship management (CRM), and customer satisfaction evaluation” (Yang, 2010). Providing specific information for business owners to refer to while making a product delivery strategy is key. Furthermore, the “balanced scorecard model provides a step-by-step process to innovation, learning, and knowledge that can be applied to every workplace situation and implemented by every worker (Barrow, 2010). This means, in essence, further assisting emergent organizations in creating products and services, which meet clientele requirements exactly. Moreover, providing, “tangible key performance indicators that reflect the performance providing an outlet,” for creators to gauge the effectiveness of their designs (Hamouda, 2013) is vital. The balanced scorecard, “presents a conceptual framework for managing the process of systematically deriving improvement actions from customer expectations and strategic decisions through business processes, and prioritizing improvement actions that will most contribute to strategic objectives” (Barrow 2010). This ensures the environment for quality product creation within an organization. Methods for measurement of consumer satisfaction include purpose-driven employee interaction as well as the administration of surveys included with the product. Discernibly the contentment of customers is measured by the profits created by their purchasing.

Traditionally the capacity of business has been judged by financial results. For example, “Bookkeeping records of financial transactions can be traced back thousands of years, when they were used by Egyptians, Phoenicians, and Sumerians to facilitate commercial transactions” (Kaplan 1996). Therefore, it is essential to utilize a system to check financial efficacy using the final perspective of a balanced scorecard, which measures the use of every dollar spent in an organization. This is known as the multiplier effect and explains, “For every dollar that is in your organization how you are leveraging it for a wider impact” (Hart, n.d.). Unquestionably this sort of approach, the use of company funds, will prevent unneeded spending and ensure resources are used properly. Moreover, with efficient use of company funds and the information generated by an effective scorecard, the use of strategic management accounting is possible. Strategic management accounting describes, “the process of ‘provision and analysis of management accounting data about a business and its competitors for use in developing and monitoring business strategy” (Kampschroer and Heerwagen, 2005). This allows companies the opportunity to pinpoint are key indicators to good economic performance within their company. For example, a leading retailer in the UK Tesco has utilized a balanced scorecard and strategic management accounting, “In order to check its market positioning, the company is constantly monitoring the prices of its merchandise relative to the prices charged by its main competitors” (Kampschroer and Heerwagen, 2005). This allows growing corporations the opportunity to formulate even more precise spending plans to maximize the use of resources and funding which may have been used improperly in other areas.

In a dynamic world understandably organizations must adapt to accommodate the shift of the economy from locally supported to a globalized integrated economy in order to grow effectively. With the many factors that influence economic affluence among growing businesses, a calculated plan for success is definitely needed to ensure progress. Moreover, a specific method to measure the attainment of specific performance interventions and goals must be set into place to assure that progress in the organization is being made toward these objectives. Unmistakably this is what the application of an effective balanced scorecard serves to accomplish within an organization. With an effective and balanced scoreboard in place through analysis of employee education, business processes, client satisfaction, and financial efficacy an organization can develop a solid method to ensure continued growth and richness. What it essentially does is lay frameworks of sorts to gather information and utilize it while emergent administrations aspire to grow effectively. Moreover, it can create an open environment within an organization that encourages innovation and continued adaptability to changing economic conditions. Therefore developing businesses seeking continuous development would be wise in exercising it as a valuable resource at their disposal in the measurement of accomplishment within their organization and pursuit of the realization of their ambitions. An effective balanced scorecard provides an invaluable tool to up and coming organizations for strategic growth in a new globalized economy.

References

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Hamouda, A. (2013). The BSCBAS: a Balanced Scorecard-based appraisal system for improving the performance of software organizations. Journal Of Software: Evolution & Process, 25(7), 763-780. doi:10.1002/smr.1566

Hart, K. (n.d.). Developing a balanced scorecard for your economic development organization. Economic Developmentorg. Retrieved December 5, 2013, from http://economicdevelopment.org/2012/09/developing-a-balanced-scorecard-for-your-economic-development-organization/

Kampschroer, K., & Heerwagen, J. H. (2005). The strategic workplace: development and evaluation. Building Research & Information, 33(4), 326-337.

Kaplan, R. S., & Norton, D. P. (1996). The balanced scorecard: translating strategy into action. United States: President and Fellows of Harvard College.

Ming-Hon, H., & Hsin, R. (2007). Design and planning of the balanced scorecard: A case study. Human Systems Management, 26(3), 217-227.

Shaw, D. G. (1995). Performance measurement, management, and appraisal sourcebook. Amherst, Mass.: Human Resource Development Press.

Van Grembergen, W., & Van Bruggen, R. (1997). Measuring and improving corporate information technology through the balanced scorecard. The Electronic Journal of Information Systems Evaluation, 1(1).

Yang, C., Yang, K., & Cheng, L. (2010). Holistically integrated model and strategic objectives for service business. TQM Journal, 22(1), 72-88. doi:10.1108/17542731011009630