Analysis of Elite Engineering's Balance Score Card Approach

This case study analyzes Elite Engineering's business strategy and the implementation of a Balance Scorecard (BSC). The report examines the company's struggles with goal congruence, employee incentives, and the effectiveness of its BSC approach. It explores the four key perspectives of the BSC: financial, customer, internal processes, and learning and growth, highlighting the importance of accurate data collection and analysis. The study identifies shortcomings in the current BSC draft and emphasizes the need for relevant information and a focus on employee discipline. The analysis includes recommendations for a modified BSC, addressing issues such as the lack of efficient successors, changes in the business environment, and the need for aligning individual and organizational goals. The report underscores the BSC's role as a management tool for strategic decision-making, aiming to guide Elite Engineering towards sustainable growth by addressing its internal affairs and performance metrics.

Running head: BALANCE SCORE CARD
BALANCE SCORE CARD
Name of the University
Name of the student
Author notes

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Executive summary
The aim of the report is to analyse the business strategy of elite engineering and to prepare a
balance score card based on which the management can take important changes in the
structure of the business. The report also contains the analysis of the four measures of the
balance score card and explain how all these aspects can be used by elite engineering in
framing the strategy for achieving sustainable growth. The report concludes by
recommending a modified balance score card for the organisation on the basis of the draft
balance score card prepared by the management of elite engineering.

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Table of Contents
Introduction and background.....................................................................................................3
Discussion..................................................................................................................................5
Problem......................................................................................................................................5
Analysis......................................................................................................................................7
Recommendations....................................................................................................................11
Conclusion................................................................................................................................16
References................................................................................................................................16

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Introduction and background
A balance score card is used as a premeditated management tool which can be utilised
by the management to determine and enhance the different internal affairs of the business. It
is also used as a metrics to measure and give important feed backs to the organisation. To get
the accurate results from the balance score card its is essential to collect authentic data so that
the management can take accurate decisions based on such balance score card. A balance
scorecard will be useful to interpret the available data and can help the management to take
important decision based on such data.
In the balance score card mainly four aspects are considered and based on the results
of these four aspects the management take necessary decisions which will support the
organisation to accomplish its desired objective. The four aspects of the balance score card is,
finance, customers, business process and learning and growth. From these four aspects it can
be possible to take decisions that will affect the growth of the organisation. the four aspects
of the balance scorecard model are stated below:
Learning and growth
The learning and growth are analysed on the basis of the training and knowledge
resources that the organisation have. This aspect deals with the capacity of the employees to
use the information supplied to them and how efficiently they convert such evidence to get a
viable benefit over the business world.
Business process
This aspect is assessed by analysing how effectively the products are produced. The
management have to monitor the operation process efficiently to detect the gaps, delays,

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bottlenecks, shortages and wastage in the production process and should try to mitigate such
loses.
Customer perspective
The customer perspective is used to evaluate the extent of buyer consummation with
respect to the quality, price, and quantity of the products orb services of the organisation. the
information in relation to this can be collected from the feedbacks provided by the customers
in relation to the products that are consumed by them (Cooper Ezzamel & Qu2017).
Financial data
This aspect is measured by the volume of sales, expenditure incurred and the income
earned by the organisation. the financial data is used to evaluate the financial performance of
the company and to forecast the forthcoming inclination of the organisation.
These four aspects help in framing the vision and strategy which will assist the
management to reach the desired objective that the company wants to achieve within the
stipulated time frame. The balance score card for this reason is known as a important decision
making tool for the management and not a tool for measuring the financial position of the
organisation (Rotchanakitumnuai 2017).
The balance scorecard was originaly familiarized by Dr Robert Kaplan and business
administrator and theorist Dr David Norton.

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Discussion
Problem
Reason of the failure of elite engineering
Elite engineering fail to maintain sustainability due to the two reasons which are
analysed below
First
The main reason is that the most efficient staffs of the organisation are near to their
age of retirement and there is lack of efficient successor who can make a replacement of these
members. The company is lacking a good leader who can fill the gap of the persons who are
going to retire. The company does not find a good replacement of the founder who have step
down as the chief executive officer.
Second
The management of the company predicted a variation within the viable business
environment. The organisation estimated a huge fall in the requirement for the proficient
demonstration that is related with the disaster investigation with the tort reform and due to the
limit in the punitive loss that they have to face for the civil lawsuits. The organisation has to
rely excessively on this source of income (Mamabolo & Myres 2019).
Evaluation of the need of goal congruence
Goal congruence means merging the goal of the company with the goal of an
individual. The aim of goal congruence is to direct the goal of the employees and the goal of
the organisation in the same direction. It is difficult to align the goal of the company with the
goal of the individual as when the management try to set goal for all the employees the

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company goal may get lost. In this case also the manager of the elite engineering tries to align
the goal of the organisation with the goal of the employees to maintain sustainable growth but
fail to do so as the employees’ dose not get any interest to align their personal goal with the
goal of the organisation.
The founder of the organization CEO Paul Johnson has arranged a meeting with all
the engineers of the organisation for increasing the competence of the business. In the
meeting he pointed the following goals
 While maintaining the quality of work the operation team should achieve a yearly
revenue of $256 million.
 Maintaining the steady inflow of cash along with improving the financial growth
 To bring more versatility in the range of services along with balance.
 Running the business with efficient teamwork.
 Increasing the efficiency of the operation by recruiting efficient human resources and
by providing them high standard training.
The founder thought that sharing the goals will encourage the engineers to work with
more passion and they will actively work for achieving the goal and will consider the goal of
the organisation as their own goal. But the founder fails to predict the reaction of the
employees and later on it has been observed that no one is interested about the goal of the
organisation and every one think about their own interest only (Marimon & Malbasic 2019).
The engineers are motivated only by getting monetary incentives and they only focus
on billable jobs as that provide them higher incentives.

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For the last few years the company used too pay bonus based on the performance of
the engineers at the completion of the accounting year. To get bonus, the employees have to
finish the year with 80% billable, on the basis of 40 hour per week, 50 weeks per year. As the
incentive scheme is only related with the billable work so most of the engineers used too
focus on the billable work only and does not focus on achieving the goal set by the founder.
This self interest behaviour of the employees creates a negative impact on the
business activities of the organisation. most of the employees does not want to work as a
team in the cross diversified environment and for that reason they failed to deliver the work
properly.
Analysis
The most significant aspect of a Balance score card is the gathering of correct and
reliable information’s based which management can take decisions and take necessary steps
to rectify the mistakes that they failed to detect at the initial stage. The four aspects of the
balance score card will indicate that in which aspect the company should give more weight
and which are not important from the percept of the organisation. the effectiveness of the
balance score card depends largely over the precision of the evidence collected, if the
information gathered is not correct and adequate then the changes that the management want
to make based on the data provided in the balance scope card will not be effective to meet the
goal of the organisation (Abadi & Widyarto 2018).
Major shortcomings of the proposed BSC
In this current case the draft scorecard prepared by Stuart does not contain enough
relevant information that can help the management to take any effective changes. Stuart only
created a draft score card in which he only highlighted the areas of problems that are to be

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solved but he did not clearly specify in which areas the company should focus more and what
weightage is to be given to every aspect of the score card (Biasotto Dias & Ogliari 2017).
In the learning and growth innovation measures more emphasis should be given to
bring discipline among the employees. The management highlighted the fact that the most
essential factor that is required is goal congruence which is not mentioned in the balance
scorecard.
Information required for evaluation of measures of the balance scorecard
The management should try to collect information regarding the evaluation of the
performance measure in all the aspects of the balance score card these are, financial
perspective, innovation and learning perspective, internal perspective and the customer
perspective, to evaluate these aspects the organisation should collect information from the
customers through various market seminars, and from such seminars the organisation should
try to know what expectations the customers are desiring from the organisation. from the
internal perspective the organisation should collect information regarding the factors in which
the organisation should give more focus and make improvement.
Process of gathering information for the different measures of the proposed BSC
In the innovation and learning percept the organisation should gather information
regarding the fact that whether there is scope to improve the skills of the employees and
whether there is a need to organise a training module for them.
In regards to the financial perspective it is essential to collect evidence concerning the
position of the actual liquidity position of elite engineering and how the bonus structure
should be framed.

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For gathering the information about the customers, the organisation should arrange a
market survey from which data can be collected and find out the reason for the decline in the
demand of the products in the recent years. The billable job that are done by the engineers.
The main reason for the unsustainability in revenue generation capacity is due to the reform
in the tort and the limits for the punitive damages in the civil lawsuits. The company should
collect data from the engineers that what feedbacks they are getting from the existing clients
and what more improvements are required to be implemented in the products. Further more
data are required to be collected to get a better idea about the future trend of demand for the
projects in the market and which products will help to generate more revenue for the
company.
Internal perspective
In the internal perspective aspect, the company should gather information by
arranging meeting with the management and analysing the current situation of the
organisation the management should take decisions regarding the changes hat are to be
implemented to ensure that both the long term and short-term goals can be achieved. The
information can be collected by collecting the feedbacks of the engineers and the higher
management regarding the internal process of operation (van Veen-Dirks & Lillis 2018).
Learning and training perspective
For collecting information about the need of their training can be collected from the
engineers directly. The efficiency of the engineers can be evaluated from the volume of
production and the bonus earned by them. More information regarding the efficiency and
discipline of the employees the management can make a meeting with them and collect the

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feedback from them that what is expected from them and in which areas they have to give
more focus to improve their performance (Quesado Aibar Guzmán & Lima Rodrigues 2018).
Financial perspective
In the financial perspective it is important to collect accurate and reliable data to
measure the actual financial strength of the organisation and to take decisions on the basis of
such information. The information can be collected from the various financial reports that are
prepared on yearly basis. Moreover, information can also be collected by calculating various
financial ratios like the liquidity ratio, profitability ratio, efficiency ratio it can be possible to
measure the financial perspective of the company (Dobrovič et al 2018).
Level of analysis for these measures
Customer perspective measure
For determining the customer perspective, its is required to analyse the industry and
from the industry level analysis it will be possible to predict the trend of the market and what
the customers are expecting from the products of the organisation. the industrial level
analysis will also help the management to bring necessary changes in the products and to
increase the revenue earning capacity of the company (Banabakova & Georgiev 2018).
Internal perspective measure
To measure the internal perspective, its required to make analysis on the business
team level. From the business team it will be possible to get an idea about the current
problems that are occurring in the production process. The business can be operated only if
all the employees and the management work as a team and strive towards a common goal. So,

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in order to measure the internal perspective, it will be essential to measure the efficiency of
the business team of elite engineering.
Learning and training perspective measure
Analysis on the individual level is required to measure this perspective. The learning
and training perspective are required to evaluate the performance of individual employees
and to find out the areas in which the individual employee should give more focus in order to
increase the level of his or her skills. The training perspective is an important tool to evaluate
the efficiency level of the employees based on which the management can take important
decision whether to retain the individual employee or to reject the employee. In addition to
that this perspective is also useful to enhance the skills of the employees and make them
efficient so that they can increase their productivity and also increase the quality of the
products produced or services rendered by them (Ali 2019).
Financial perspective measure
The financial measure can be analysed at the company level. The financial measure
can be evaluated by analysing the financial reports of the company and the various efficiency
ratios that are calculated on the basis of the results of these ratios.
Recommendations
Balance scorecard of Elite Engineers
Possible
metrics
Information
required
Analysis
level
Associated
goal
Initiatives
Customer
measure
Rating given
by customers
Making
surveys to
Industry 5 The company
is trying to

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at the end of
the project
necessary
data about
the feedback
of the
customers
increase the
productivity
along with
increasing
the quality of
the products.
Internal
measure
Feedback
from the
engineers at
the end of the
meeting with
them.
Making
internal
surveys
among every
employee
and
collecting
their views
Company
level
3.5 The
management
want to
encourage
the engineers
by making
changes in
the bonus
structure.
Learning
and growth
measures
Feedback
from the
management
and from the
engineers
Arraigning
meetings and
noting down
the important
points.
Individual
level
5 The
management
taking
initiative for
goal
congruence
Financial
measures
Financial
reports
Analysis of
the financial
reports
Company
level
3 Offering
production
bonus to

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engineers to
increase the
volume of
revenue and
increase the
cash inflows.
Major short coming detected in the draft balance score card
The major short coming that is detected in the draft balance scorecard prepared by
Stuart is that there are no columns found for the weightage that is to be given for every
metrics. Further the draft balance score card also does not contain the source from which the
information is to be collected so that based on such information the founder of elite engineer
can take actions. The main factor for which the management decided to prepare the balance
score card is not mentioned in the draft balance score card prepared by Stuart.
The revised balance score card reflects suggestion for every goal of the company. For
the customer perspective it has been suggested that the company should encourage the
engineers to enhance the productivity and handle the challenge of the changes in the tort
reforms and the limits for the punitive damages for civil lawsuits. The balance scorecard
provides a suggestion to collect feedback from the clients regarding what additional
improvements are to be implemented in the failure analysis area which generate 75% of the
revenue for the firm (Shen Chen & Wang 2016).
Suggested measure for every goal
Internal perspective

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In the internal perspective area, it is suggested to give more emphasis on goal
congruence as the company wants to align the goal of the concern with the goal of the
employees. In order to do that the its is suggested to give more monetary benefits to the
engineers so that they can get more motivation in fulfilling the goal of the company. the
company should give more focus in developing a strong relation with the insurance
companies and with the manufacturers and the builders who used to appoint these insurance
companies (Shen Chen & Wang 2016).
Stuart arrange a meeting with the engineers to implement the concept of the business
team which is lacking among the engineers and the engineers are only concentrating on
fulfilling their own interest only.
Learning and growth measures
For this goal the main suggestion that is required is to enhance the communication
skills of the engineers so that they can easily interact with the manufactures and builders and
bring new revenue generating sources for the organisation. the company should also give
training to the employees regarding the process by which that can work as a team and serve
the organisation more effectively and increase the level of production. It is clear from the
intention of the management that they want align the goal of the company with the goal of the
individual employee which can be achieved only if the company can make a structure of
giving bonus to the engineers if they can bring additional source of revenue, by doing this
the company can align the goal of organisation as well as the interest of the engineers
(Hansen & Schaltegger 2016).
Financial measures

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It can be suggested to the organisation that the company should keep consistency in
maintaining the working capital requirement and as the liquidity condition of the organisation
is not good so elite engineering should implement a financial strategy to maintain a strong
liquidity condition of the organisation. the company should also increase its revenue growth
rate so that it can be possible to improve the cash inflow (Du Plessis & Tachiwona 2016).
Relating the measures with the goal of the organisation
The internal perspective measure can be related with the congruence goal of the
organisation. the management is trying to motivate the employees so that they can work more
efficiently and give their best effort to fulfil the goal of the elite engineering.
Customer perspective
The customer perspective measure can be related with the goal of capturing the
market and to ensure that the company can provide high quality products to the customers.
Learning and growth perspective measure
The goal that is attached with the learning and growth perspective is to enhance the
communication skill of the employees and to motivate the employees to work as a team and
bring sustainable growth for the organisation.
Financial measure
The goal of the financial measure is to improve the liquidity position and to improve
the condition of cash inflow of the firm. The bonus structure is to be made simpler so that the

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engineers can easily understand what benefits the changes in the bonus structure will bring to
them.
Improvements and additional information that can be gathered in future
The main improvement that Stuart can made is to bring more balanced approach in
the bonus structure from which both the company and the engineers will get optimum
benefits.
The company can give more production related bonus to the engineers which will
motivate them to bring more clients for elite engineers and by doing so both goal of the
organisation to increase its revenue and the interest of the employees to earn more bonus can
be achieved and that will help the organisation to implement goal congruence strategy
(Kalender & Vayvay 2016).
Conclusion
From the above analysis it can be said that elite engineering will be able to take some
important decision from the information that they will get from the balance score card. The
management of elite engineering is unable to detect the actual area of problem for which they
failed to maintain sustainable growth. The top management has faced several problems like
the dissatisfied employees, fall in the volume of revenue, lack of interest of the employees to
accomplish the goal or objective of elite engineers and the to give importance to the specific
areas in which they should give the highest priority. The balance score card prepared by the
top managers of the organisation only highlight the areas and fail to highlight any solution for
such problems also it is not mentioned that which areas require more emphasis. So, a revised
balance score card is prepared in which the areas are highlighted where the company has to
bring immediate changes if elite engineers want to achieve the desired result.

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