BSC Adoption for N&S Ltd: Improving Strategic Performance

BSC adoption for N&S Ltd
Contents
Background................................................................................................................................1
Introduction................................................................................................................................1
Balance Score Cards..................................................................................................................2
business strategy Considerations................................................................................................4
BSC for N&S Ltd.......................................................................................................................6
Conclusions..............................................................................................................................15
Bibliography.............................................................................................................................15

BSC adoption for N&S Ltd
Overview
N&S Ltd. is a Victoria based agro-industrial enterprise that produces car tyres using rubber
latex. The company has 300 people working for the company and it has $3bn is the share
capital. In last couple of years, the company is losing on its performance mainly due to the
differences in the understanding of the strategic picture among the top management and
middle level employees. A survey conducted in the factory discovered that 95% of the people
working in the organization did not understand the strategy of the business. Thus,
organization has planned to adopt Balanced Scorecard tool to record and document business
performance.
This report has been prepared to understand how balance score card is prepared and how it
can help an organization achieve a better strategic performance. The analysis of the BSC
model would be used to understand if the company would be able to resolve its issue of lack
of awareness of the strategic objectives of the company in its workforce or managers.
Introduction
This report explores the process of adoption of BSC for N&S Ltd. The company is facing a
struggle in making its people understand the strategic objectives and plans of the
organization. The report would explore the concept of balanced score casts, business strategy
considerations and application of BSC for the case of N&S limited.
The balance score card model has been adopted by the company to get more transparency
achieved on the strategic front so that managers at all levels in the company are able to
understand the objectives of the company as well as have defined ways for achieving them.
Each of the four perspectives including financial, customer, internal and learning would be
explored to understand strategy considerations that an organisation should have while
preparing BSC. An analysis of the company shall be done where the BSC approach would be
applied to the case of the company to identify strategic objectives and targets that company
can set for its development (Snapka & Copikova, 2011).
Balance Score Cards
A balanced score card is a strategic tool developed by Robert Kaplan and David Norton for
measuring performance of an organization by converting its vision and mission into
operational activities. IT can help understand a strategy used by an organization, explore its
learning processes and define its target.
The actions defined in the BSC have specific indicators that can be used for measuring
operational performance of the organization. Creation of a BSC begins with identification of

BSC adoption for N&S Ltd
the vision and the mission of the organization and then the strategy is reviewed from four
perspectives that include customer, financial, internal business, and learning & growth.
Financial Perspective: This perspective explores how attractive an organisation looks to its
investors or shareholders. It makes use of past figures to determine a quantitative benchmark
which reflects upon the operational management and sustainability of an organizational
strategy. The value that is added to a business from the other three perspective is presented in
the form of financial gains and profits that company would receive in this perspective of the
balanced score card. Financial performance measurement can become a common business
language for the company when communicating company performance outside. Based on the
financial performance of the organization, investors and VCs can take a decision on whether
they should invest in the company or not. This perspective can also support decisions of the
shareholders as they would be able to judge if the company has been performing well or not.
The financial measurement only gives the story of what has happened in the organisation but
it does not help in making any future prediction of how company would be performing
financially.
Customer Perspective: This perspective involves exploration of the market needs for
quality, service, products, and price. Organizations try to meet the consumer expectations in
each of these areas to make the business look attractive to them.
Internal Processes: the internal business processes add value to the organizational activities
to support better performance of the organization. This is possible by aligning its processes ,
decisions and activities. This perspective answers the question on what should a company do
in order to satisfy its customers and shareholders.
Learning and growth: An organisation is faced with a dynamic environment in which it is
imperative for it to keep adapting to the changes in regulations, legislations and economic
structures. The long term sustainability of an organization and its ability to innovate is
affected by the company’s capability to continuously keep improving its processes and
systems. This perspective of BSC answers the question on whether the company would be
able to sustain itself for long with the given strategy.
A balance has to be created considering all the four perspectives defined in the balanced
scorecard. This would include considerations of company objectives, financial criteria, non-
financial criteria, leading indicators, lagging indicators, internal perspective and external
perspective. A cohesion is achieved by connecting the four perspectives to create this
balance.

BSC adoption for N&S Ltd
For implementing a BSC in an organization, a number of standard steps may be taken. The
first step in this development is the identification of vision, mission and the strategy of the
organization. The defined strategy is then linked to the strategic objectives of the
organization. The management of the organization would have the awareness of the vision,
mission as well as the strategic objectives and thus, their views would be taken by involving
them in a survey or discussion where they can express their views, set up performance
indicators and identify the critical success factors that can affect the business performance.
This involves analysis of stakeholders to understand what their expectations are in terms of
achievement of business objectives.
An inventory of major CSFs is created once they are identified. Critical success factors helps
in establishing indicators that can be used for measuring performance of an organization by
monitoring it throughout. The balance score card implementation also require collection of
performance data related to financial perspective and customer perspectives which is possible
through survey or interviews with shareholders and customers of the company. These
interactions with stakeholders of an organisation can help in understanding what they expect
from the business, its products and services. This can provide a direction to the organisation
in the areas of achievement of the strategic objectives of the organization. When identifying
critical success factors and organisational objectives, middle and senior levels management of
an organisation can be connected to for collecting data for measurement and setting of
targets. Personal objectives of these managers would have to be linked with the
organisational objectives so that they can contribute to the success of the strategy. The
strategic objectives of the organisation are then converted into personal goals of these
managers. For measurement of the objectives, key performance indications are set, values of
objectives is identified and these they are translated into operational activities (Malina &
Selto, 2001).
Business strategy Considerations
BSC model helps organizations measure performance of an organization from different
perspectives to understand the effectiveness of the company strategy in its capability to
achieve the vision, mission and strategic objectives of an organisation. The four perspectives
defined in the BSC involve specific strategic considerations that can affect the performance
measurement. Learning and growth perspective aim to improve the resource knowledge
though training and development activities. Thus, it must allow managers to measure if the
funds invested by them on the progressive development of the workforce has been worth and
have improved communication in the teams (Ram, 2019).