Balanced Score Card and Quality Dimensions for Toyota

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Individual Assignment DBN509 Operations Management
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Individual Assignment DBN509 Operations Management
Question 1. Balanced Score Card and its Four Perspectives and recommend two KPIs for
each Perspective to align Toyota’s operational performance with its long-term philosophy.
According to Cooper, Ezzamel and Qu (2017) in the Journal “Contemporary Accounting
Research”, is that Balanced Score Card was developed by Robert Kaplan and David Norton in
1986 as tool to be used by managers in business daily operation and management. Chung (2018)
describes Balanced Score Card as a predominantly and influential tool of management that has
remains enduringly and prevalent within all organizations around the globe. Thus, at a basic level
BSC assists companies to clarify their plans and communicate their firm’s key strategic priorities
and goals. In addition, BSC can be fundamentally being divided into a strategic framework
sections known has perspectives, the perspectives are essential for the success of the business has
suggested by (Arimoto & Kurata, 2017). According to Gonzalez-Aleu et al. (2018) in the journal
“The TQM Journal” is that main Balanced Score Card or BSC perspectives include the
following; financial perspective, the customer’s perspective, interior process perspectives and,
learning and development perspective deduced by Toyota in it management system.
1. Financial perspective: The financial perspective of the Balanced Score Card is being
described as the primary perspective in all profit based organization like Toyota (Arimoto
& Kurata, 2017). According to Bergeron (2017) is that financial perspectives deals with
all forms of Toyota Company financial objectives that has led to it successfulness in the
automobile industry. In addition the key performance indicators normally make it
necessary for the Toyota to perform a comparative analysis of various department. The
Toyota has been obtaining outcome from the analyses of the company financials aspects

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that are contrasted with the result acquired on the first analysis of the firm financial
aspects.
The two recommended KPIs (Key Performance Indicators) for the financial perspective
in the context to Toyota Company include the total profitability of investment KPI and
profitability for the net sales KPI (Hunk, 2018; Shan, Ahmad & Nor, 2016).
 KPI 1; Total profitability of investment: At Toyota Company Total profitability of
investment indicates how the Toyota profit has been able to generate profit over the
years. It also clarify from which group and type of Toyota key consumer is bring more
profit to the firm (Gibbons & Kaplan, 2015). While, the more the profit generate by
Toyota form either the groups and key firm consumers the higher the profitability, and
the higher the investment of Toyota. On the other hand, the low the profit generation by
Toyota the lower the investment and profitability. Toyota has understand the long-term
philosophy that has made it to be of greatest value. The profitability investment KPI has
enable the Toyota to know how much to incur to delivering its initial car, and all
requirements the company needs in striving to maximize and increase profitability
(Gibbons & Kaplan, 2015). Thus, Toyota Company is thriving towards generating more
profits which is one of its key long-term philosophical objectives through the help of total
investment profitability KPI.

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Profitability KPI Figure 1: (Arimoto & Kurata, 2017).
 KPI 2; Profitability for net sales: indicates the effectively of how Toyota Motor Co.,
Ltd is creating revenues on each dollar that it is obtaining from its car sales. The
profitability for net sales KPI measured the profit that Toyota Motor Co., Ltd made in
both long term and in short financial decisions that reflecting the core mission of Toyota
Company (Gibbons & Kaplan, 2015). The higher the profit obtained from the investment
of from profit earned from Toyota net sales the greater the firms profitability in the net
sales. The Toyota Company profitability for net sales has given the firm an advantage of
responding to the pricing war of its vehicles in contrast to the other competitors in the
same marketplace (Hunk, 2018).

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Net Sales KPI Figure 2: (Shan, Ahmad& Nor, 2016).
2. Consumer perspective: The consumer perspectives mainly focuses on the Toyota
performance goals linked to consumers and the marketplace has deduced by (Hunk, 2018). If
Toyota wants to attain its financial objectives and long term philosophy then it have to be aware
of what exactly should be delivered to consumers and the specific deliveries required by the
consumers. The Toyota consumer perspective objectives include, customer satisfaction and
services and brand awareness. Toyota have increase its new car brand awareness through social
media platform in order to gain customers satisfaction. The two recommended KPIs in context to
Toyota consumer perspective include consumer’s loyalty KPI and consumer satisfaction KPI
(Shan, Ahmad & Nor, 2016).
 KPI 1; Consumer loyalty: indicates the Toyota client retentions. The Toyota
consumers’ loyalty is the numbers of customers who normally buy Toyota cars more than
once in a specified period. The Toyota consumers’ loyalty KPIs has played the main role
towards the success of the company. Whereas, the greater the consumers trustworthiness
in Toyota vehicles the highest the perception the firm is committed to attain its long-term
philosophy (Arimoto & Kurata, 2017).

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Consumers’ loyalty KPI Figure 3: (Goya et al., 2018)
 KPI 2; Consumer satisfaction: is the Toyota KPI that indicates the number of
consumers’ who firm cars and after sales services satisfied. The higher the numbers of
satisfied consumer’s satisfied by Toyota the higher the profit being generated, whereas,
the lower the consumers’ satisfied the lower the profit Toyota is making, but the is loss
higher when consumers are not satisfied (Goya et al., 2018). Hence, Toyota consumer’s
satisfaction is the key performance indictors that Toyota Company has improve every
year in order to attainment its mission (Arimoto & Kurata, 2017).