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Internal Business Processes


  • Post Date 2018-11-07T12:45:10+00:00
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Internal Business Processes

Internal Business Processes

Module_4CA.docx Module 4 - Case The Learning and Growth Perspective The learning/growth perspective of the balanced scorecard presents some particularly interesting challenges. Here is a useful brief summary of the approach: Niven, P. (N.D.) Learning and Growth perspective. EPM Review. Retrieved May 17, 2010, from http://www.epmreview.com/Resources/Articles/Learning-and-Growth-Perspective.html Part of the problem is that this perspective seems the most remote from the final payoffs in the financial area – “touchy-feely” rather than good old hard-nosed management. Kaplan and Norton, the originators of the balanced scorecard, have addressed this issue of how to measure the contribution of such intangible assets as human capital, information capital and organizational readiness, pointing out how human capital is most useful when it is concentrated in key jobs involving internal processes that are critical to the achievement of the organization`s strategy. The article is fairly long and you don`t need to read it in detail, but it has some ideas that may help you understand this case better: Kaplan, R.S. & Norton, D.P. (2004). Measuring the strategic readiness of intangible assets. Retrieved May 17, 2010, from http://www.cma-slp.com/onlinelibrary/OL_English/Strategy%20Implementation/Management%20Accounting/MeasuringTheStrategicReadinessofIntangibleAssets.pdf Our example in this case is Futura Industries in Clearfield UT. They have implemented the balanced scorecard in an interesting way, apparently giving priority to the learning/growth perspective and expecting it to drive the others. Here`s how this process has been described: “Most companies use the balanced scorecard (BSC) to focus on the financial aspects or the operational metrics required by ISO quality certification. But that is not all one unique company uses the BSC for. At Futura Industries, President Susan Johnson built the enterprise`s success over the past 3 years on the BSC`s foundational level - the learning, innovation, and growth dimension. This dimension provides the building blocks that generate success in the remaining 3 quadrants: customer service, financial, and internal operations. And the results have followed: a 50% increase in revenue without adding personnel from 1996 to 1999. This organization is all about putting people first. So much so that the company of 300 ranks in the top 10 Family Friendly Employers in Utah for the third year in a row. A look at how they have implemented the 4 quadrants of the BSC using the learning innovation, and growth dimension as their foundation is presented.” The article from which this summary is taken can be found here: Gumbus, A. & Johnson, S.D. (2003, July). The balanced scorecard at Futura Industries. Strategic Finance. 85(1). 36-42. Retrieved May 17, 2010, from http://proquest.umi.com/pqdweb?sid=1&vinst=PROD&fmt=6&startpage=-1&clientid=29440&vname=PQD&RQT=309&did=370139621&scaling=FULL&vtype=PQD&rqt=309&TS=1226799369&clientId=29440 As your case assignment for this module, you are to carefully review this article, and then (in 3-4 pages) prepare your analysis of how Futura Industries implemented the balanced scorecard and its apparent effects. Assignment Expectations: Your analysis should be structured along the lines you`ve been using this far in these cases: Introduction: Why did Susan Johnson, Futura`s President, emphasize the learning and growth perspective over the other balanced scorecard perspectives? Analysis: What specifically does Futura measure, and what types of measurements do they use to evaluate the company`s learning and growth? Conclusion: Do you think these measures capture the full dimensions of the learning and growth perspective as explained in the background materials from this module as well as previous ones? Support your answer with examples and citations. Evaluation: What is your evaluation of Futura`s approach? Does it make good business sense or do you think it could cause problems for the company? Agree or disagree with the issue, then defend your position. Use the readings done so far to decide whether the implementation was done well or poorly. ================= mod5ca.docx Module 5 - Case Integration - Causal Chains and Strategy The case for this module involves putting together all you have learned about setting objectives for each of the four perspectives, establishing measures and targets for them, and identifying action plans that might put them into effect. As we noted in the introduction to this module, the trick in putting things together under the balanced scorecard involves creating "causal chains" linking together the objectives in such a way that achieving one objective makes it possible to achieve another in sequence. Thus, when we have a series of objectives defined for each of the perspectives, we should be able to start with actions to achieve objectives in the learning and growth domain and ultimately achieve objectives in the financial return/effectiveness domain. Our case here gives you an opportunity to put together such causal chains and see how they might work. But let`s start with some practical advice. Here`s a review of a recent book by Kaplan and Norton, the gurus of the balanced scorecard, that discusses implementation strategies. While the review is interesting in its own right, even more interesting is the wide variety of reactions to it from readers that follow the review; read through them quickly to get a sense of the diversity of opinions surrounding this topic. Silverthorne, S. (2008). Executing Strategy with the Balanced Scorecard. Retrieved May 17, 2010, from http://blogs.bnet.com/harvard/?p=397&tag=nl.e713 Armed with your new sensitivity to implementation, you`re now better equipped to look at an example. A few years ago, the journal Strategic Finance published a very interesting case describing the implementation of a balanced scorecard approach in a bank: Albright, T.; Davis, S.; & Hibbets, A. (2001, October). Tri-Cities Community Bank: A Balanced Scorecard Case. Strategic Finance, 83(4), 54-60.Retrieved May 17, 2010, from http://proquest.umi.com/pqdweb?sid=1&vinst=PROD&fmt=6&startpage=-1&clientid=29440&vname=PQD&RQT=309&did=83040028&scaling=FULL&vtype=PQD&rqt=309&TS=1226794941&clientId=29440 Basically, you are to carry out the case analysis described in the article, with some slight modifications to the questions posed in the article, as follows. Your complete analysis should involve 4-5 pages, responding to the numbered points below. Assignment Expectations: What`s referred to as "Case A" in the article tracks the initial implementation of the balanced scorecard through the establishment of the first set of objectives for each of the perspectives. As you`ll see, Table 2 in the article (p. 57) presents a list of performance measures suggested by bank personnel as intermediaries toward the achievement of the three main financial goals: loan balances, deposit balances, and non-interest income. 1. The first step is to categorize each of the performance measures in Table 2 as belonging to one of the four perspectives (to start you off, we`ve put the three financial goals in the table already). Here`s a table that you can copy and paste into your paper that might be helpful toward this end: Learning/Growth Internal Business Processes Customer Service Financial loan balances deposit balances non-interest income 2. Then, following the procedure described in Figure 1 of the article (p. 58), you are to connect these objectives and measures into two or more causal chains, indicating how the achievement of one objective leads to the potential achievement of another such that ultimately one or more of the financial performance objectives are achieved. You can do this by drawing arrows, or if this is too complicated, by simply specifying the chain in order. As noted, Figure 1 shows one chain; it is highly recommended that you find two others rather than including this one as one of your two. There are numerous possibilities. For each chain, please include a brief paragraph describing the logic of the chain, and why you see the objectives as connected in the way you do. You`ll be graded on the effectiveness of your balanced scorecard logic, rather than on whether or not you happen to stumble on any one of the chains that occurred to your instructor. This may seem like a somewhat daunting task, but it`s actually kind of fun once you get the categorization of the measures into the proper perspectives accomplished. Once you`ve accomplished Case A, then you can move on to the second part of the assignment, Case B, which involves looking at the implementation of the balanced scorecard approach and its apparent consequences. There are two sources of information available to you here: Table 3 (p. 59), which lists the before and after performance of each of the branches of the bank, and the interviews with bank personnel in each of the branches where the system was implemented (pp. 57-59). Here`s what you need to do to accomplish this part of the exercise: 1. Review Table 3 in a comparative way and try to decide if there is evidence for the effectiveness of the balanced scorecard approach in terms of improving the key financial measures. Remember, the balanced scorecard was implemented in branches A-E , and not in branches F-J. To help you make tis comparison, you can click here to access an Excel spreadsheet that presents the Table 3 data for your use in this analysis. If you really get stuck in this process, you can click here to access an augmented version of the spreadsheet that has already made some comparisons to help you out -- but you`ll get more out of the case if you try to run the analysis on your own from the raw data. The important part is to present a brief but cogent analysis of the relative performance of the balanced scorecard branches versus the branches that did not use the approach, using appropriate comparative numbers to support your argument. 2. Then, to finish the analysis, review the relative performance of the five implementing branches in relation to the information you have presented in the interviews about how the balanced scorecard was used in each of the branches -- apparently, there were significant differences in implementation, and there are significant differences in the relative performance of the branches (A-E). Briefly describe the relative performance of these branches, and any conclusions you can draw about how the system was implemented in each of them. 3. Conclude with a brief statement of advice that you might give to the board of the bank about the use of the balanced scorecard overall, and how it ought to be implemented to achieve maximum effectiveness, citing appropriate information and data to support your argument. Write a well written paper addressing the above assignment, support your position and cite your sources appropriately. ====================== mod5ca3.docx Executing Strategy with the Balanced Scorecard By Sean Silverthorne | August 14, 2008 Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001. Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily`s first journalist based in Silicon Valley. More from Leadership • Walmart`s Powerful Corporate Supporters • How to Achieve a Turn Around • MBAs Who Earn $3 Million Plus • How CEOs Become Deer in their Competitor`s Headlights • How to Compete Against the Big Guys View more The originators of the Balanced Scorecard approach to management are at it again with a new book that urges executives to make strategy a continuing process that is embedded deeply throughout the organization. The Execution Premium: Linking Strategy to Operations for Competitive Advantage by Harvard Business School professor Robert S. Kaplan and consultant David P. Norton shows managers “how to weave organizational principles into a more effective management system that respects the differences between strategy and operations yet integrates them in a powerful way,” according to an interview with Kaplan in HBS Working Knowledge. Several takeaways: • Strategy execution often fades in the face of day-to-day operations issues — fighting fires. The senior management team should meet monthly on strategy-only topics. • The operational plan and budget should be driven from the revenue targets in the strategic plan. • Large organizations should consider creating the Office of Strategy Management, which is a team of professionals that coordinate strategy management details orchestrate strategy for the executive team. “We don`t advocate abandoning an intense focus on operations and their improvement,” Kaplan says. “But we do advocate planning strategy, not just describing it as important.” The book lays out a six-stage process: 1. Develop the strategy. 2. Plan the strategy. 3. Align the organization. 4. Plan operations. 5. Monitor and learn. 6. Test and adapt. How does your organization craft and execute strategy? Is it effective?
Module 5 - Case[Name][Course Title][University][Instructor Name][Date]Module 5 – CaseCase ABalanced scorecard can be the most effective tool in strategic management if the links between the input, processing of the input and the output can be logically aligned in an optimum manner (Hubbard, 2007). In this paper, there are four perspectives which would be considered. The four perspectives are; learning/growth, internal business, customer service and financial. Following is the categorization of the performance measures given in the case study into the four perspectives (Albert et al, 2001).Table: 1Learning/Growth Internal Business Processes Customer Service Financial Number of new customersNew loans createdNew accountsNew products introducedEmployee Training HoursEmployee SatisfactionEmployee Turnover ReferralsCross Sells Products per customerCustomer SatisfactionCustomer RetentionSales CallsThank-you Calls Outstanding loan balancesDeposit balancesNon-interest income Table: 1 shows the classification of performance measures in accordance with the four perspectives. Following are the two causal chains based on the classification of performance measures into four perspectives.Causal Chain 1Customer PerspectiveFinancial PerspectiveInternal Business PerspectiveLearning/ Growth PerspectiveImproved Loan, Deposit and Non-Interest IncomeProducts per customerIncreased Cross SellsNew Products IntroducedThe causal chain shown above represents that, if new products are introduced by the organization, it would help the personnel of the organization conduct cross selling to the customers. This can be implemented by marketing complimentary products by the organization along with the products that customer seeks. Due to the increased cross sells, there would be an increased number of products per customer. Increased cross sells and the increase in the number of products per customer increase the non interest income of the organization a...

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