Practical Implication of the Balance Scorecard in BHP Billiton Company

This report examines the practical implications of the Balance Scorecard (BSC) within BHP Billiton, a multinational mining, metals, and petroleum company. The analysis focuses on how BHP Billiton utilizes the BSC to translate its vision and mission into strategic programs. The report explores the four perspectives of the BSC: financial, customer, process, and learning and growth, and highlights the importance of lead and lag indicators in performance measurement. It discusses the strategic performance measurement system, strategic map, and the use of BSC by managers to improve decision-making and overall business outcomes. The report also addresses the company's corporate social responsibility (CSR) activities and the impact of the BSC on identifying key issues, such as oil spills, and improving benefits for society. The study concludes that implementing the BSC effectively can enhance the quality of products and services while achieving the company's goals.

RUNNING HEAD: Practical Implication of the BSC in BHP Billiton 1 P a g e
Practical Implication of the Balance Score card Approach in BHP Billiton

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Introduction
With the ramified complexity of the business organization, use of balance score card
approach has been gaining momentum throughout the time. It is observed that the BHP
Billiton Company is an Aglo Australia Multinational mining metals and petroleum dual listed
company which is indulged in providing the fisheries and promotion of the agriculture
products in Australia.
It is fully owned conglomerate company which has been running its busienss in
Australia.
Implementation of the Balance score card approach
The Balance score card method of the Kaplan and Norton emphasis upon the
strategic approach and performance management system that enables organization to translate
BHP Billiton Company vision’s mission into the implemented strategic program. It simply
provides the road map to implementation of the strategic program to implement the strategic
program to sales its services and products in market.

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Statistical data for the customers services
Source: https://www.sec.gov/Archives/edgar/data/811809/000119312510213954/d20f.htm
This graph reflects the statistical data and work program which have been taken by BHP
Billiton company to implement the proper strategies and smooth running of its busienss.

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Source: https://www.slideshare.net/ezendu/performance-of-knowledge-management
The increased numbers of cases which had negatively impacted the BHP Billiton
Company resulted to increasing the benefits of the corporate social responsibilities program
undertake by the company for the stakeholders. The Balance score card approach helps BHP
Billiton Company to identify the issues and key problems which will eventually reduce the
complexity and render more benefits to society.
However, the number of cases related damages arise to society due to the spill of the
oil and gas has increased by 20% since last five years.

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Source: https://www.valuewalk.com/2017/04/elliot-management-bhp-shareholder-value-
unlock-plan/
The main issues which have been founded by the BHP Billiton Company is related to the less
benefits rendered to society

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BHP is the leading global resources company and by using the effective strategic work
functions and proper balance score card approach it could easily set up direct and indirect
link in its busienss functioning.
The above given graph reflects that in 2016, BHP Billiton has faced the increased number of
oil spill cases which have put negative impact on the society and economic at large.
Therefore, by using the Balance Score Card approach, Management and directors could use
the systematic work plan and implemented work functions to mitigate the issues related to oil
spill cases. The proper strategic program and implemented balance score card approach will
assist in increasing effectiveness of the work program and implement the strategic approach
(Al-Hader, and Rodzi, 2009).
Strategic performance measurement system
It is the planned system which enables organization to plan, measure and control organization
performance. It will eventually increase the overall ability of the strategic decision making
and increase the outcomes available to society at large. The Strategic performance
measurement system measures the financial and non-financial measures which eventually
increases the overall output and efficiency of the business at large. It is observed that the
Strategic performance measurement system will assist organization to implement the proper
strategic program and evaluate how it could add value to society through its CSR activities.
The CSR activities of the BHP focuses on setting the new eco system and implementing the
strategic program which eventually increases the output to the environment and society at
large (Al-Hader, and Rodzi, 2009).
Balance Scorecard Approach
It is the performance metric strategic tools which are used to set up a particular work program
by using the lead and lagging indicators. The Balance score card method of the Kaplan and

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Norton emphasis upon the lead and lagging indicators which needs to be used by BHP
Billiton Company to implement the proper strategic program and evaluating the four steps
work program.
Strategic Map
The strategic Map could be defined as graphical presentation of the Balance score card
activities to achieve the set objectives and goals of BHP Billiton Company.
The balance Score Card Approach is used to set up four segments and evaluating the
characteristics of the different departments of BHP Billiton Company.
Financial areas
It measures the capital requirement, cost of capital and return on capital employed of the BHP
Billiton Company. It measures the expenditure required to implement the strategic program
and implement the strategic approach to implement the developed financial plans (Al-Hader,
and Rodzi, 2009).
 Customer perceptions
BHP Billiton Company needs to evaluate the needs and demand of the clients before
investing capital and formulating the strategic plans to increase the overall effectiveness and
total turnover of the business (Baporikar, 2017).
 Process perspective
It evaluates the implemented strategic program and implemented strategies which need to be
implemented by the BHP Billiton Company s for implementing the supporting strategies and
work program. It could use advance system and strategic policies to win over the market and
implement the strategic program (Boscia, and McAfee, 2014).

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Learning and growth perspectives
It deals with the growth and learning factors of the employees and staff members. The
management department of the BHP Billiton Company needs to use the strategic clients
oriented work approach which needs to be assessed on the basis of the improvement made
and supporting plans developed for clients (Ibrahim, 2015).
Indicators in balance scorecard approach
Lead indicators
It is cumbersome to determine and analysis these factors as it is highly based on the future
factors and analytical supporting program (Harden, & Upton, 2016).
There are several lead indicators of the BHP Billiton Company which needs to be undertaken
for increasing the overall quality of the products and services offered in market.
 Use of the strategic plans prepared by the key performers.
 Analysis the revenue, future plans and return on capital employed
 Determine the main Pre-emptive action which assists in implementing the strategic
work program (Fitzgerald, and Thornton, 2016).
 Focusing on the short term and long term objectives (Lueg, 2015).
Lag Indicators
The lag indicators assists in formulating the future plans based on the last present data for
increasing the quality of the oil and gas offered by BHP Billiton Company for its clients
 Evaluation of the supporting implemented strategies.
 Setting strategies to accomplish the long term lead indicators.

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Performance Indicators of the BHP Billiton Company
These below given are the performance indicators of BHP Billiton Company which
are assessed on the basis of its desirability and uses in forming the strategies (Alani, Khan,
and Manuel, 2018).
Indicator-Lag
Governance functions
 Preparing the budget (Increase the cash flow for the supporting activities by 20%).
 Implementation of the advance technologies
 Setting nexus for the stakeholder’s welfare and organizational development
Clients
 Increasing the quality of the products offering
 Increasing the supporting program
 Implement the proper strategic program (Kaplan, & Norton, 2016).
Finance
 Reducing the cost of the capital
 Increasing the productivity
 Setting goals and objective for the increasing the overall output (Coe, & Letza, 2014).
Norms
Setting norms and program for promoting clients need and demand in market.
Reduce the cost of capital and increase the overall return on capital employed

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This performance indicator of the BHP Billiton Company has shown that if company wants
to increase the overall outcomes of its work then it will first have to set up the steps and work
program in determined approach. These different performance indicators assist in achieving
the set objectives and goals in determined approach (Kerai, & Saleh, 2017).
Use of the balance score card approach by the
managers
 It helps employees to implement the strategic program and effective work functions to
strengthen the facility available to clients.
 It assists in maintaining the flow of the cash in the internal work functions and
stakeholders supporting program.
 Setting a proper supporting program to mitigate the issues faced by the clients.
 It evaluates and implements the strategic work program to identify the problem areas
and where BHP Billiton Company needs to make improvement for the better work
functions (Alani, Khan, and Manuel, 2018).
 This shows that if BHP Billiton Company wants to reduce the negative impact of the
it’s busienss on society then it will have to infuse the proper work program and
effective work functions.
 It will assists in implementing the strategic work program and implemented strategies
to render the best suitable services for the society at large (Kang, Chiang,
Huangthanapan, & Downing, 2015).
Conclusion
It is observed BHP Billiton Company needs to make supporting program for increasing
the quality of its products and services to clients by using the proper strategic program and
strategic work program structure. The balance score card approach will divide the work in

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four different segments to achieve the set objectives and goals in determined approach. Now
in the end, it could be inferred that by making the proper department work Program Company
needs to implement proper strategies. It plays major role and requires proper work efforts or
strategic plans. If the balance score card approach is used in effective manner then it will
increase the overall outcomes and efficiency of the work program in determined approach.