Management Perspectives: Balance Score Card Report on Ford Motors

This report provides an executive summary and detailed analysis of the balance scorecard, a performance evaluation tool, focusing on Ford Motor Company. It begins by defining the balance scorecard, its characteristics, and its benefits over traditional performance measurement systems. The report then delves into the details of Ford Motor Company, discussing its strategic objectives, including increased fuel economy, light-weighted product manufacturing, customer base expansion, efficient working culture, and stakeholder consideration. The core of the report examines the application of the balance scorecard to Ford, considering its financial, customer, internal business process, and learning and growth perspectives. The report concludes with recommendations based on the analysis, offering insights into how Ford can leverage the balance scorecard to achieve its goals. The report uses reliable sources and is structured with appropriate headings and subheadings for clarity.

qwertyuiopasdfghjklzxcvbnmqwerty
uiopasdfghjklzxcvbnmqwertyuiopasd
fghjklzxcvbnmqwertyuiopasdfghjklzx
cvbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmrtyuiopasdfghjklzxcvbn
mqwertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyuiopas
dfghjklzxcvbnmqwertyuiopasdfghjklz
xcvbnmqwertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbnmqwerty
MANAGEMENT PERSPECTIVES -
BALANCE SCORE CARD
STUDENT NAME:
STUDENT ID:
5/21/2018
1

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
EXECUTIVE SUMMARY
CIMA defines Balance Score card as a tool for organization which assist an
organization in evaluation of level of performance with the intention to provide the
measures as to how the same shall be improved. It is the comparison of past
performance level which an organization already performed and future performance
level which the organization want to achieve. The main intention of framing this
report is identify the linkage between the performance level and the company’s goals
and objectives. The another aim of preparing this report to assess the difference
between the traditional performance measurement system which mainly focus on
short term financial and competitive measures and Balance Score card which is new
technique and focus on long term financial and competitive measures. This reports
helps in understanding how the top level management measured the value generated
in past by per unit of resource and how much value will be generated in future. This
report provides a platform for organization to incorporate new performance measure –
Balance Score card in their internal control systems so that various goals and
objectives like enhance customer satisfaction can be achieved. With the defined aims
the report has been prepared with appropriate headings and sub headings and proper
conclusion has been drawn thereon.
2

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
Contents
EXECUTIVE SUMMARY............................................................................................. 2
INTRODUCTION........................................................................................................ 3
DETAIL OF THE COMPANY - CHOSEN.........................................................................4
MEANING AND DISCUSSION OF BALANCE SCORE CARD.............................................6
DEFINITION.......................................................................................................... 6
CHARACTERISTICS................................................................................................ 7
ANALYSING THE BENEFITS OVER TRADITIONAL PERFORMANCE MEASUREMENT.......9
CHECKING THE SUITABILITY..................................................................................10
CONCLUSION AND RECOMMENDATION...................................................................10
REFERENCES.......................................................................................................... 11
INTRODUCTION
Each and every company shall strive to maintain the system robust in order to achieve
the objectives as defined by the company. In order to have such system, the company
shall adopt a defined and the valuable technique which will help the company in
integrating the efforts towards the attainment of the common objectives. The
techniques or method so tried to be implemented shall be best and according to the
3

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
needs and the requirements of the business of the company. Although there are many
management accounting tools and the technique available with the companies
operating in the particular industry but for the purpose of this report, the balance
scorecard has been discussed in detail. For the furtherance of this report, the company
that has been chosen is the manufacturing division of the Ford Motor Company. It is
the company based in United States.
The report has started with the description and details of the company so as to have an
understanding of the company. The description includes the name of the company, its
nature of business and how the company is currently operating its functions. Then the
technique of balance scorecard has been discussed in detail with its meaning and as to
what are the main characteristics that it carries in each process. After mentioning the
features, the technique of balance scorecard has been compared with the traditional
system for the measurement of the performance of the company. In this the
advantages of the balance scorecard has been given which is over the traditional
system. Then the detailed discussion has been made regarding whether the balance
score card so listed is suitable and applicable to the selected company.
With these discussion and analysis the report has been presented with the appropriate
headings and subheadings and all the data for the purpose of this report has been
collected from the reliable and the available sources.
DETAIL OF THE COMPANY - CHOSEN
For the furtherance of this report, the Ford motor company has been selected. The
company has been carrying out its functions since the year of its incorporation which
is nineteen hundred and three. The company has been into the business of
manufacturing of the cars, trucks, SUV’s and the electric vehicles. The company does
not only manufactures but also markets and sells the automobile goods. The company
has their own division of financing and provides the finance to the customers as and
when the demand arises and only on the purchase of the goods of the company. The
company has operating across the globe and for the purpose of this report, the
subsidiary of company located in Australia as Ford Motor Company Limited has been
considered and accordingly the analysis has been made (Ford Company, 2017).
Before proceeding with the application and suitability of the balance score card to the
company, it’s better to have more detailed discussion on the strategic objectives of the
4

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
company. It is because only after knowing the company in detail, the applicability and
suitability of the balance score card can be verified. Few are the strategic objectives of
the company which will help in assessing the main purpose of this report.
 The first strategic objective of the company is to have the increased the fuel
economy on the global basis. It can be done by the reduction in the rate of
emission of the gases which are hazardous in nature. It has been mentioned
that the company has been able to achieve the improvement of ten percent in
the emission of carbon dioxide. This ten percent is regarded as the benchmark
of the industry and is the best in the automobile industry.
 The second strategic objective of the company is to have the right or
monopoly in the industry to manufacture the product which will be light
weighed. The market share can be measured through the data that has been
collected in the survey for the customers including the corporate who are using
the goods of the company. Currently the company is producing lighter goods
with one hundred and fifty to seven hundred pounds.
 The third strategic objective of the company is to have the number of customer
base increased with the usage of their goods. It means the customers using
their goods in the market shall be more and thereby having the high market
share. The strategy that the company has adopted for the same is to conduct
the marketing of the products through advertisements or door to door
advertisements and through the way of business promotion events. Higher the
customer base of the company higher will be their chances for survival in the
future.
 The fourth objective of the company is to have the smooth and efficient
working culture in the office. For this the company shall work to have the
system where the corporate governance in good terms shall be there. This can
be only achieved through the system of having the good office culture of the
company. The culture is not related to the deployment of the individuals
employed in the organisation rather it is concerned with the proper and
effective working of the organization. The code of ethics as developed in the
organization shall be followed by each and every employee employed in the
organization. Not only this, the good working culture will then is developed by
5

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
conducting the workshops so as to aware the employees about the working
culture of the company. Thus, for developing the working culture the
employees have to work within the limits as defined by the company policies
rules and procedures.
 The last and the main strategic objective are to consider the need as well as the
objectives of the stakeholders of the company. It is because it is the
stakeholder only because of which the company runs consecutively for the
future years and the company shall consider all the needs and the requirements
of the stakeholders. The stakeholder includes the shareholders of the company,
investors, potential investors, banks and the financial institutions, the
government authorities and the employee of the company. The company has
adopted the policy of full and timely disclosure to the stakeholder in order to
avoid the ambiguity in any manner and in case any deviation comes into
notice, then the same will rectified to the satisfaction of the stakeholders of the
company.
Thus, by having the detailed discussion on the objectives and the working of the
company, the importance and the applicability and suitability thereon can be verified
with the method known as Balance Score card.
MEANING AND DISCUSSION OF BALANCE SCORE CARD
Balance score card is the method which will be flowed through out the report. At first,
the meaning of the balance score card will be discussed along with the features.
Through the implementation of the Balance Scorecard, the company will have the
better measurement systems.
DEFINITION
Balance Score Card is the planning system that is being frequently used by many
companies across the globe (Kaplan and Norton, 2015). Companies include not only
the profit making organisations but also includes the not for profit making
organisations. It provides both financial and non financial measures required to
evaluate the performance of the company (Brander Brown, 2014). Through these
measures the management of the organisation have the view of performance of an
6

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
organisation in the balanced manner. The balance score card has defined four
perspectives through which the company’s overall performance can be viewed in the
effective manner (CIMA, 2015). These four perspectives are – Financial, Customer,
Internal Business Process and Learning and Growth. . Each of the perspective delivers
different values to the company. Through this report the Ford Company has been
chosen for which the overall objectives of the company will be explained and
thereafter objectives of the Manufacturing unit of the organisation will be explained.
Keeping in view the objectives so listed, the balance score card will be identified
suitable only after analysing the features of it (Kaplan and Norton, 2014)
Financial perspective is basically embedded for meeting out the needs of the
shareholders and other stakeholders like rate of return on capital employed, earning
per share, etc. Customer perspective deals with the customer satisfaction and
attraction. Internal business processes helps the company to measure the viability of
the processes between the stage when the customer needs are identified and when the
customer needs are satisfied. Last perspective deals with the measures to evaluate the
long term growth of the company (Niven and Paul, 2012).
Having dealt with the meaning of the balance score card it is necessary to understand
its features only then the comparison can be made with the traditional method
measurement.
CHARACTERISTICS
For the purpose of having the best system of the balance scorecard, following are the
distinguished features of the balance score card that every company shall have:
 First feature of the balance scorecard is the financial evaluation. Everyone is
interested in knowing this perspective because of its dealing with the
profitability of the company and other measures such as return on assets,
return on equity, net profit margin and etc (Kaplan and Norton, 2011). The
financial perspective serves as the focus for the objectives and acts as the
measure for the aim of the company and also acts as measures in the other
score card objectives. This form of perspective reflects the concern for profit
organisation stating that every action has cause and effect relationship which
helps in measuring the financial performance of an organisation in short run
and long run (Kaplan and Norton, 2016). While identifying the objectives and
7

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
measures various matrices are considered which are appropriate for different
units operating in an organisation. These matrices help in linking the financial
objective of the unit to the strategy adopted by the organisation as a whole.
 Second feature is of the customer perspective. It deals with the customer
satisfaction. It helps in understanding as to where the organization stands at
from the view of the customer. This feature will not always be static like
financial evaluation indicators rather it keeps on changing (Isoraite, 2014).
This form of perspective measures the compatibility of the organisation to
provide the goods and services of better quality, to assure the timely and
effective delivery of the goods to the consumer, to provide the customer a
desired level of service and overall satisfaction to the customer (Piedra
Palacios, 2016). The need and requirements of the customers shall be fulfilled
in an effective manner as the organisation derives the value of their products
and receives the profit only because of the customer satisfaction. Therefore, it
is regarded as the basic and important form of perspective for the effective
working of the organisation. (Kaplan and Norton, 2016)
 Third feature is of having the system of sound internal control processes. This
form of perspective deals with the results of the business generated internally
that leads to the success of the organisation not only financially but also by
increasing the level of satisfaction provided to the customer (Kaplan and
Norton, 2012). In order to achieve the organisation objectives and the
expectation of the customers, the key business processes should be identified
on which the organisation as a whole should work with full dedication. By
placing the key business processes it is ensured that the drawbacks will be
more than the satisfactory and also helps in achieving the expectation relating
to the performance as well as customer satisfaction (Gumbus, 2016).
 Fourth and the last feature is of the learning and growth perspective which
basically deals with the employees of the company. This form of perspective
focus on the ability of the personnel working in the organisation, the
information system installed in the organisation and its effectiveness and the
change in the organisation in order to support the objectives of the
organisation (Arora, 2012). Every process requires the manpower to accelerate
the process in the right direction and on the right path. Processes will only
8

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
succeed when the manpower who are adequately skilled and are motivated
accordingly and are supplied with the proper, accurate and timely information
are the real personnel who are driving the process. This process takes on
increased importance in organisation as most of the organisations have
undergone a drastic and radical change in every sphere (Kaplan and Norton,
2013). To meet the ever changing requirements in the business and to gain the
competitive advantage over other organisations and to gain the expectation of
the customer, personnel should be motivated to take the new responsibilities,
acquire new skills, acquire innovative technology and adopt the change if any
in organisation.
ANALYSING THE BENEFITS OVER TRADITIONAL PERFORMANCE
MEASUREMENT
The company has been adopting the budgeting method for the measurement of the
performance of the company. Budgeting is the management tool under which the
standards are set for each and every activity of the company and against which the
performance of the company is judged (Norreklit, 2012). These standards are
prepared in accordance with the past experiences of the company as well as in
accordance with the judgment made by the management of the company if any. The
budgeting has been regarded as the traditional performance measurement as it is the
old indicator for measuring the performance. Although the balance scorecard is also
an old method but due to its gaining importance in the last so many years it can be
said that the method is new as compared to budgeting (Zelman, 2013).
Under the method of budgeting, the company is required to prepare the materials
budget, sales budget, purchase budget and cash budget and so on. These budgets help
in minimising the cost of particular thing if the budget gets exceeds or if there is the
scope of saving of the money of the company (Möller, 2014).
Budget usually plays very crucial part in the success of the business of the company.
It persuades each and every manager of the company as well as the persons who have
been charged with the corporate governance of the company to be ready for all the
events that may happen in the near future (Gautreau, 2011). Master budget comprises
of all the forms of budget and lays down the plan for all the activities of the company
in total. All the budget which is required to be made for the specific purpose like
purchase budget or sales budget forms the part of the master budget only (Chavan,
9

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
2014). The main advantage of the preparation of budget is that the company can have
an idea as to how the activity is required to be performed and what type of measures
can be undertaken so as to bridge the gap between the actual results as well as the
budgeted results. For instance if the company’s budgeted results or the desired results
is that the production budget shall be at the minimum and the company will work
accordingly in order to achieve the desired results. There is one important concept of
zero based budgeting which is widely used by the companies across the world. It
enables the company to consider the base year as zero and instead start the budgeting
process at the fresh. Thus in this way the budgeting is the important factor for success
of every business (Suprapto, 2016).
But if the same is compared with the balance score card then the budgeting is
identified with the low level. It is because of the fact that the balance scorecard
provides the four perspectives in which all the functioning of the company can be
measured against the set standards and therefore, the balance scorecard shall be
implemented in order to be more informative and detailed (Kaplan and Norton, 2015).
CHECKING THE SUITABILITY
Yes, the balance score card is suitable for the company. It is not only suitable for the
company but also convenient and more useful for the company. It is because of the
following reasons:
- The balance score card has four perspectives which in itself carries the whole
of the functions of the company and considers the same and from those
perspectives gives the indicator of the performance of the company.
- It provides an inbuilt target system of achievement (Kaplan and Norton,
2016).
- Through the budget the internal control processes cannot be measured and
sometimes through which the actual costs gets increased. But in the balance
scorecard the company can measure the internal control processes in a very
good and deep manner.
- As the company is the manufacturing company, all the four perspectives
covers all the areas and as the company has many activities and large
operations, balance score card will provide the best results (Kaplan and
Norton, 2012).
10

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
Thus, in this way the balance score card is suitable for company.
CONCLUSION AND RECOMMENDATION
Balance score card, in the current scenario, has been regarded as the technique for the
measurement of the performance of the company. For the purpose of this report, the
data of Ford Manufacturing Company has been used. The features of the balance
score card have been discussed in detail along with the comparison with the budgeting
being the traditional method of performance measurement. In order to conclude the
report, the balance score card has been explained in detail and it has been established
that the balance scorecard is the best measure for the measurement of performance.
It is recommended for the company to implement the system of the balance scorecard
system in place.
REFERENCES
Arora, R., (2012), “Implementing KM–a balanced score card approach” Journal of
knowledge management, 6(3), pp.240-249.
Brander Brown, J, (2014), “The balanced score-card: short-term guest or long-term
resident?”. International Journal of Contemporary Hospitality Management, 7(2/3),
pp.7-11.
CIMA, (2015), “Effective performance management with the balance scorecard”
available from http://www. cimaglobal.com/ Documents/ImportedDocuments/
Tech_rept_Effective_Performance_Mgt_with_Balanced_Scd_July_2005.pdf
accessed on 16-05-2018.
Chavan, M., (2014), “The balanced scorecard: a new challenge”. Journal of
management development, 28(5), pp.393-406.
Ford Company, (2017), “Annual Report” available on http://corporate.ford
.com/homepage.html accessed on 16-05-2018
11

MANAGEMENT PERSPECTIVES - BALANCE SCORE CARD
Gautreau, A., (2011), “Recent trends in performance measurement systems–the
balanced scorecard approach”. Management Research News, 24(3/4), pp.153-156.
Gumbus, A., (2016), “Entrepreneurs use a balanced scorecard to translate strategy
into performance measures”. Journal of Small Business Management, 44(3), pp.407-
425.
Isoraite M., (2014), “The Balance Score Card Method : From Theory to Practice”
available from https://www.mruni.eu/upload/iblock/d42/Isoraite.pdf accessed on 16-
05-2018
Kaplan R. and Norton P, (2016), “The Balance Scorecard: Translating Strategy into
Action”, Harvard Business School Press, 512(2), pp 42-52
Kaplan R. and Norton P, (2012), “The Balance Scorecard: Translating Strategy into
Action”, Harvard Business School Press, 423 (4), pp 111-115
Kaplan, R.S. and Norton, D.P., (2015), “Putting the balanced scorecard to
work”, Performance measurement, management, and appraisal
sourcebook, 66(17511), p.68.
Kaplan, R.S. and Norton, D.P., (2016), “Linking the balanced scorecard to
strategy” California management review, 39(1), pp.53-79
Kaplan, R.S. and Norton, D.P., (2011), “The strategy-focused organization: How
balanced scorecard companies thrive in the new business environment”. Harvard
Business Press, 12(2), 54-75
Kaplan, R.S. and Norton, D.P., (2016), “Using the balanced scorecard as a strategic
management system”, Accounting review, 100(1), 94-102
Kaplan, R.S. and Norton, D.P., (2012), “Balanced scorecard. In Das Summa”,
Summarum des Management (pp. 137-148).
12