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Category: Business and Industry
Date Submitted: 05/25/2008 03:21 AM
Evaluate the usefulness of a balanced scorecard approach in assessing business performance.
To: Marketing Director
From: Marketing Consultant
Date: 12th November 2007
Subject: Evaluating the balanced scorecard approach
Introduction
A balanced scorecard is used to describe the strategy of an organisation. This report will critically evaluate the scorecard as a measure when assessing business performance.
The balanced scorecard
A balanced scorecard tells you the knowledge, systems and skills that employees in a company will need (innovation and learning) to innovate and build the correct strategic capabilities (internal) that deliver specific value to the market (customers) which should eventually lead to higher shareholder value (financial).
An example of a balanced scorecard for Alliance & Leicester Commercial Bank is detailed below:
Objectives Measures
Financial Profitability Net margin
Profitability growth Volume growth rate against industry
Loan loss rate of 10% or less No of problem loans
Customer Good customer service Customer satisfaction survey
Competitive price Competitor information e.g. Moneyfacts
Customer satisfaction Customer tracker research
Value for money Customer tracker research
Internal Product development Increase in number of sales
New product success Increase in number of sales
Sales penetration Actual versus plan
Targeted marketing material Number of sales
Innovation and learning Enhance job skills Training sessions completed
Increased upward career movement Number of internal promotions
Continuous improvement Employee suggestions
Advantages
• The balanced scorecard ensures the evaluation and control processes are in place
• It provides a much wider perspective and incorporates the measures important to employees, customers and other external stakeholders
• Used to measure stakeholder value and therefore assess company performance against goals and expectations
• Provides a...