Flashcards
Balanced Scorecard
Flashcards do conjunto (30)
- 1basis of balanced scoredcardintangible assets play a central role in value creation of companies;
can be used to motivate,measure and evaluate company performance - 2challengehow to integrate the measurement of intangible assets into the company's management system?
- 3balanced scorecard for perfromance measurementfinancial metrics
customer perspective
internal process
Learning and growth - 4historical tools: GE's decentalizationFinancial :Profitability
Customer : Market Share
Process : Productivity, Product LEadership, Public reponsibility
Learning : Personnel development
Employee attitudes
Balance between short-range and Long-range objectives - 5historical tools: Herb SimonScorecard question :Am I doing well or badly?
Attention directing : What problems should I look into?
Problem-solving question : Of the several ways of doing the job, which is the best - 6Peter Drucker : MBOManagers must understand ultimate business objective
what is expected of him and why?
what he will be measured against and how? - 7Robert AnthonyStrategy =>
Management Control =>
Operational Control - 8Robert Anthony : StategyWhere to compete and How to Compete?
- 9Robert Anthony : Management COntrolprocess by which managers effectively and efficiently use resources to accomplish organizational objectives
- 10Robert Anthony : Task Controlprocess by which specific tasks are carried out effectively and efficiently
- 11Issues with US corporationstoo much obsessed with short-term financial measures to the detriment of long-term objectives
- 12Issues with placing values on intangible assetsAssets such as knowledge and technology seldom have direct impact on revenue and profit ; involve 3 or more intermediate stages before before it affect financial outcome
Intangible assets depend on organizational context and strategy ; not a linear and additive model
Intangible by themselves seldom have value. they must be bundled with other tangible/intangible assets to create value - 13issue with financial accounting as a performance measuretraditional cost accounting doe not track sources of competitiveness and profitability of the global economy
cost accounting does not track factors such as quality, flexibiilty and dependability;
business needs information about activities and not accounting costs to manage competitive operations and to identify profitable products - 14New framework from Big-3, Analog devices and a Large chemical companyfrontline employees need to see financial metrics
senior executive teams needs to supplement financials with customers,quality and employees - 15share-holder value and principal-agent frameworkstock prices reflect all public information about company performance ;
executive compensation could be better aligned with owner's interests thru expanded use of stock options and other equity rewards - 16fallacy of balanced scorecard as pointed by michael jensenscorecard that gives no scores!
no way to make purposeful decisions - 17Kaplan's explanation to Jensenpilot example:
safe and on-time arrival
cannot fly using time and destination as sole parameters; (incentive)
need information,communication and alignment as well
(fuel indicator,deviation from flight path, proximity to other airplanes) - 18another issue of principal-agent model : short-runprincipal agent models are single period models in which the firm's output is revealed at the end of the period and no further managerial (Agent) actions are required
- 19multiperiod optimization issue of principal agent modeldynamic programming teaches us that , maximizing shareholder value over 10 year period cannot be accomplished by optimized financial perfromance or stock price period-by-period
- 20How does BSC deal with multiperiod optimization issueBSC includes outcome metrics as well to signal when the long-term strategy appears to be delivering the expected and desired results
- 21Stakeholder theory vs BSCStakeholder theory : Stakeholder precedes Strategy
BSC : Strategy precedes Stakeholder - 22StakeholdersExternal : shareholder,customer,communities
Internal:
Suppliers and Employees - 23Issue with stakeholder theorycompany would attempt to meet the expectations of exisiting and potential customers it could serve and end up getting "stuck-in-the-middle";
(High cost and non-dfferentiated) - 24BSCIntegration of
Operational effectiveness (process) - lead indicators
Financial economics - lag indicators
Stakeholder theory - (other metrics) - 25how to choose metrics for BSCdo not use existing metric
do not benchmark metrics
instead use BSC perspectives to express their strategic objectives;
from the objectives , metrics can be easily derived - 26what is strategy maplinks intangible assets and critical processes to the customer value proposition and financial outcomes
- 27vision for BSCdefine and track performance among multiple financial and nonfinancial measures that are considered important
- 28Larry Brady on scorecardsscorecards are cornerstone of management system for executing the strategy;
not to be seen as just a measurement system - 29BSC as Simon's interactive systemNeed a device like the scorecard where the business unit managers are measuring their own performance.
keep adjusting the light I shine on their strategy and implementation to monitor and guide their journeys and see whether there are any potential storms on the horizon that we should address ;
use scorecard to question,probe,challenge and coach about the strategy and its implementation - 30strategy focused organizationMobile change thru executive leadership
translate the strategy
align the organization to the strategy
motivate employees to make strategy their everyday job
govern to make strategy a continual process
Informações
- Descrição
- ea MCS FlashCards sobre Balanced Scorecard, criado por Mukundhan Srinivasan em 18-07-2016.
- Criado por
- Mukundhan Srinivasan
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- Avaliação