Implementing Balanced Scorecard at The Business: A Detailed Report

This report presents a detailed analysis of 'The Business' company, identifying critical shortcomings in its operations, including poor customer service, inadequate store locations, outdated inventory, and lack of employee training. It proposes the implementation of a balanced scorecard (BSC) as a strategic management tool to address these issues and improve overall performance. The report outlines a strategy map for the company, illustrating the cause-and-effect relationships between financial, customer, internal processes, and learning & growth perspectives. It emphasizes the importance of aligning objectives, clarifying desired outcomes, and enhancing non-financial operations to achieve business success. The BSC is presented as a means to improve communication, restructure the business, update inventory systems, and ensure qualified personnel. The report highlights how the BSC can help the company achieve its financial goals, improve customer satisfaction, and enhance employee skills, ultimately leading to increased market share and profitability.

MANAGEMENT DECISION MAKING1
MANAGEMENT DECISION MAKING
Name
Course
Tutor
Institutional Affiliation
Date

MANAGEMENT DECISION MAKING2
MEMORANDUM
TO: Mr. John Clark
Manager of The Business Company
FROM: (Name)
Consultant
DATE: October 6, 2017
SUBJECT: Implementing Scorecard at ‘The Business’
Upon survey and review of the company ‘The Business,’ it has come to my notice that several
activities and operations are not in accordance with the required standards of a business
operation. The business does not fulfill some of its vital objectives which can result in the
success of the company. During the survey, it was observed that the company does not provide
sufficient customer service and most of the customers were forced to queue for long periods
before being offered the services. This act has contributed to customer dissatisfaction. The stores
of the company are also poorly located making it quite difficult to access and do not even
provide ample parking for the visiting customers making them compete while others opt to leave
without making a purchase.
It was also observed that the stores primarily stored old stocks with no organized inventory
system. The products in the shops are entirely inappropriate with the present market demands,
and therefore most clients are not able to buy as they are unusable. The business also uses false
advertising to deceive the clients into buying the products. This is against standard business
operations. The general structure of the stores is not in excellent condition with poor lighting
systems and poor organization of materials leading to waste of time. Worse still, most of the staff
lacked necessary store keeping skills since they did not have any form of training. The staff
lacked knowledge in both the products and on customer service.
Recommendations
Based on the identified shortcoming being carried out at the stores, it is prudent to restructure the
entire management system of the company. The use of balanced scorecard was thus deemed as
the most appropriate strategic management tool that can be implemented to improve the
performance of ‘The Business.' All the employees at ‘The Business’ should be trained to
improve their knowledge and skills in customer service and products. All the workers that are
transferred to the stores should have acquired sufficient knowledge required in the operation and
management of the business.
I will be glad to discuss the mentioned recommendations with you to elaborate and follow
through on any decisions you will decide to make.
Thank you for your concern
(Signature)
(Name)

MANAGEMENT DECISION MAKING3
Table of Contents
MEMORANDUM...........................................................................................................................2
Introduction......................................................................................................................................3
The company’s strategy map...........................................................................................................5
Strategy Map for ‘The Business’.................................................................................................7
Figure 1: Balanced Scorecard Strategy Map...........................................................................7
The Objectives of the Company and Their Importance...................................................................7
Balanced Scorecard for ‘The Business’...........................................................................................9
How Balanced Scorecard Will Achieve the Stated Strategies.......................................................10
How Balanced Scorecard Enhances Goal Congruence for ‘The Business.’.................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

MANAGEMENT DECISION MAKING4
Introduction
The objective of every business organization is profit maximization through the provision
of high quality products and excellent customer service which contributes to gaining more
significant market share amidst stiff competition. To achieve their objective, an organization will
thus employ the use of appropriate strategies and management tools to help counter the market
and industry competition and expand its sales volume through both existing and new markets
(Northcott and Ma'amora Taulapapa 2012). Some of the vital ingredients of a successful
business venture other than the provision of quality goods and services are excellent customer
service, and sufficient training of the staff to have a proper understanding of their roles. Other
include proper maintenance and organization of the workplace and exceptional marketing
strategies that help promote the company’s products to new and existing customers (Hsu and Liu
2010).
Drawing from our case of ‘The Business’, it is observed that the organization pays little
attention to the very basic fundamentals of a business success which have significantly
contributed to its poor performance. The case of ‘The Business’ outlines numerous weaknesses
which when assumed, may result in the total failure of the business (Smith 2010). Based on the
numerous identified weaknesses of the business, it is prudent to have a total overhaul of the
entire management system and employ new strategic systems that will propel the organization to
its glory. One of the most appropriate strategic planning and management system that is
applicable to ‘The Business’ case scenario is the Balanced Scorecard using its performance
measures; the tool will help drive the business to success gaining more significant market share
and expanding sales to new and existing markets. The present paper, therefore, delves in

MANAGEMENT DECISION MAKING5
developing and discussing the dynamics of Balanced Scorecard, illustrating the strategic map for
the enterprise, the objectives of the company and how the use of Balanced Scorecard contributes
to the achievement of the business strategies.
The company’s strategy map
A strategy map is one vital component of communicating an organization’s business
structures to the employees and the whole management. By definition, organization’s strategy
map is a framework which tends to create value for a firm through the connection of strategic
objectives in an explicit way illustrating the cause-effect relationship with each other following
the four fundamental goals of the Balanced Scorecard (BSC). These are financial, customer,
processes, learning, and growth (Yüksel and Dağdeviren 2010). In essence, therefore, strategic
mapping are crucial parts of the BSC which primarily help illustrate the strategies that a firm can
employ to create value from its products. The strategic map is thus one vital tool which helps
organizations achieve a high level of business objectives based on a firm’s weaknesses and
strengths.
With the help of a well-structured strategy map, all the workers and the management
body will have a clear understanding of the general outlook of the organization’s strategy and
their roles in achieving the firm’s objectives. The strategic map, therefore, acts a guide that
gives workers an opportunity to view how their responsibilities contribute to either the
achievement or failure of the firm’s strategic objectives (Wu, Lin and Chang 2011). A strategic
map accrues some benefits to an organization that employs its use, and one of them is that it
creates an easy, simple, neat visual representation way of communication. It further helps
identify organization’s key objectives, unifies the organization’s goals into a single strategy and

MANAGEMENT DECISION MAKING6
through its financial perspective of the BSC, it contributes to the creation of long-term
shareholder’s value (Bigliardi and Bottani 2010). By aligning organization’s strategic objectives
around the business strategy, the map ensures the successful implementation of the business
strategy which eventually contributes to the improvement of organizational performance.
Based on the present case scenario of ‘The Business’ a strategic map will be the most
prudent tool to help improve its performance. In drawing the business strategy map, the
organization’s five year’s objective is considered based on the weaknesses that are experienced
at the business based on its current structure (Arzu Akyuz and Erman Erkan 2010). Currently,
the firm’s five-year objectives include increasing sales volume annually to a maximum of about
A$5 Billion in five years, attaining positive operating income with a sales return of 15% and
expanding its market share to a minimum of 11% in five years. Other than the five-year financial
objectives that ‘The Business’ aims at attaining, the management is also mandated to enhance the
current organization structure which seems to have totally the non-financial operations which
significantly contribute to the achievement of the firm’s financial objectives. Through the
implementation of the BSC, it is anticipated that new management of ‘The Business’ will
enhance the communication system within the business to help clarify the primary and desired
outcome from the business operations in regards to quality service and customer satisfaction.
The implementation of the BSC through strategy mapping aims at restructuring the
location of the business to make it more accessible to the target customers giving them amble
parking, and this will expand the business’s market share. It is also anticipated that ‘The
Business ‘updates its inventory system to only stock in abundance what the market demands
besides having a truthful marketing strategy that does not deceive the public of their services.
Having qualified personnel is also a vital component in the success of the business as it gives

MANAGEMENT DECISION MAKING7
customers confidence and satisfaction. The implementation of the BSC will thus aim at
providing sufficient and necessary training of the staff to equip them with the prerequisite skills
which will enhance the performance of the business. Using these objectives, an appropriate
strategy map for ‘The Business’ can be drawn that will help connect all the objectives with the
overall organizational strategy (Taticchi, Tonelli and Cagnazzo 2010). The strategy map for ‘The
Business’ will take the following style;
Strategy Map for ‘The Business’
Figure 1: Balanced Scorecard Strategy Map
The Objectives of the Company and Their Importance
Given the present organizational structure of “The Business,” the primary objective
expected to be achieved through the implementation of BSC is the attainment of clarification and
proper focus of the firm’s desired outcome, strategy, and its non-financial operations. According

MANAGEMENT DECISION MAKING8
to Tseng (2010), the real power of BSC in any business environment is always to develop a
performance measurement system that aligns the various perspectives of the business operation
to achieve the desired results at the end of a fiscal year. Thus, proper study and analysis of “The
Business” situation as well as a discussion with key personnel in the firm about the internal
processes would reveal the methods and fundamental success pillars that if adequately triggered
would contribute to the desired outcome. The current situation of the business indicates that there
is lack of proper clarification of what the company aims at achieving at the end of the financial
year and this explains why the firm records a nil operating income.
Through strategic mapping of the internal processes, success factors as well as desired
outcome, it is highly expected that the company’s operations would be aligned appropriately for
excellent performance. In the current setup, it is noted that the activities are not aligned with the
firm’s objectives since the business lacked trained personnel, it has poor customer service that
has contributed to customers’ dissatisfaction, and the quality of the products are also low. These
factors are indications that the current structure has no focus on achieving the company’s
objectives. However, it must be noted that setting the improvement objectives for “The
Business” activities and processes cannot be on the basis of the established standards of the
prevailing market environment (Tayler 2010; Wu 2012). The organizational management
structure as well as previous performance both financially and non-financially must be used as
benchmarks in establishing useable and applicable objectives.
Another objective that is anticipated to be attained at the end of the BSC implementation
is the realization of the vital role that each perspective of the organization plays in the overall
performance and productivity of the firm. In view of “The Business” present situation, it is
evident that the company pays very little attention to some of the crucial non-financial factors

MANAGEMENT DECISION MAKING9
(Niven 2011). Some of these factors include providing ample parking area for its consumers,
training of its staff in its products, updating its stock inventory and poor employee management
(Chen, Hsu and Tzeng 2011). Thus, the strategic mapping would help the organization identifies
some of its attractive and unattractive positions that have a direct impact on its performance and
success. In other words, establishing a visual representation of how the performance measures
need to be taken to improve the productivity of the company is vital to unify the goals of the
corporation into a single strategy that is easily executable.
Balanced Scorecard for ‘The Business’
The famous concept of the balanced scorecard (BSC) was first introduced and actively
propagated by the works of Kaplan and Norton (1992). According to them, BSC is strategy and
performance measurement tool that is used by an organizational human resource to evaluate the
efficacy and efficiency of the firm’s processes, design, and architecture (Kaplan, Norton and
Rugelsjoen 2010). The tool is also used to keep track of the various activities that the company
team members are working on at any particular moment as well as carefully monitor the cause
and effects of any change that is adopted within the organizational structure to ensure adherence
to the specific business goals. An organization’s BSC serves four basic functions, and these
include communicating the business objectives, aligning the daily operations with the individual
roles of the workers and prioritizing the organization’s projects, products, and services (David
2011). It further helps in the measuring and monitoring of the organization’s progress towards
the achievement of the strategic targets in the strategy map.

MANAGEMENT DECISION MAKING10
How Balanced Scorecard Will Achieve the Stated Strategies
Upon consideration of the financial situation of ‘The Business’ and its operations, it is
evident that the company has paid no attention to its non-financial areas to ensure excellent
customer service as a strategic move to boost its success (Niven 2011). As a management tool,
the balanced scorecard will be useful to combine both the historical financial data together with
significant qualitative information on those areas which despite the fact that are not related to
financial issues are vitally important to the organization success. The tool will enable the
management at the business to align the roles of the workers with the organization’s objective to
ensure that all the business activities are geared towards achieving the desired outcome within
the financial year and in the five-year plan (Smith 2010).
As a performance management model, BSC has four generic perspectives, namely
Financial, Internal Processes, Customer Perspective and Learning and Growth. Through this tool,
‘The Business’ would be viewed from four different perspectives and necessary measures taken
to improve the specified areas that are pulling the firm’s economic efforts down (Kaplan, Norton
and Rugelsjoen 2010; León-Soriano et al. 2010). Thus, before designing a fitting BSC for the
firm, it is essential to correctly understand the situation as it is in the organization and then
develop a strategy map based on the stipulated objectives for improvement. In other words, The
Business scorecard would be established on the basis of the measure, specified targets and
various initiation or action plans that are aimed at improving organizational performance of the
corporation.
As noted by Eden and Ackermann (2013), BSC forms the cornerstone of the strategic
management system as it addresses the pertinent deficiencies that exist in an organization such as

MANAGEMENT DECISION MAKING11
linking a firm’s long-term and short-term financial objectives. Through the use of the BSC at
‘The Business,' managers during their decision-making process, will be able to translate the
business vision which helps create a consensus with regards to the organization’s strategy.
Additionally, implementation of the BSC will enhance the communication at all levels of the
organization. This is vital in linking the strategies at all levels of the business with the unit of
individual goals to ensure that all the activities are geared towards achieving a common objective
(Hwang et al. 2011; Jassbi et al. 2011). By improving the communication system at ‘The
Business,' the management will be able to efficiently integrate its activities with organization
business since the workers will have a clear understanding of their objectives.
How Balanced Scorecard Enhances Goal Congruence for ‘The Business.’
As provided by Kaplan (2012), BSC promotes goal congruence in an organization by
encouraging three primary activities between individual workers and the overall organization.
Adopting BSC thus makes the users to effectively engage in activities such communicating and
educating, setting priority objectives and linking rewards to individual performance measures
and these are in turn linked to the organization’s business strategy (Hsu and Liu 2010). Using
BSC at ‘The Business’ will enable the workers to have an efficient communication system where
they express their views freely on issues that can enhance the overall business performance.
Additionally, communicating and educating will enable the workers to understand the
organization’s policies which make them aware of the organization’s strategies thus aligning
their individual objectives to organization’s goals. BSC will also promote goal congruence
through business planning where it will enable the managers to efficiently integrate their
strategic planning and their financial budgeting processes (Barnabè 2011). Through this process,

MANAGEMENT DECISION MAKING12
the management will ensure that its budget is geared towards supporting the overall strategies of
the company. Among the workers, good reward system will act as an encouragement making
them loyal in their responsibilities to help achieve organizational goals. Good reward system
makes employees feel being valued at the organization.
Conclusion
Balanced Scored forms an integral of an organization, and it significantly contributes in
aligning business strategies and the overall objectives. Based on the present case of ‘The
Business,' adopting the use of Balanced Scorecard will help restructure and streamline the
organization’s activities to be geared towards achieving the overall business objectives. Based
on its importance, therefore, Balanced Scorecard should be adopted by firms facing management
challenges as it acts as an effective communication tool that gives a good organizational picture
of its strategy elements and its initiatives. Infusing the elements of a balanced scorecard in an
organization system will thus result in high performance, good management, and improved
operation quality.