Chapter one Essay
The balanced scorecard was developed by Kaplan and Norton in the 1990’s, according to published reports approximately 50% of fortune 1000 corporations have implemented the BSC system of business management. This discourse will examine the balance scorecard (BSC) business module and its potential fit on Pepsi Saudi Arabia. It will critically analyze the core elements of BSC, and why it could serve as the primary operating business engine for Pepsi corp of Saudi Arabia.
This paper will reference data from other companies that have adopted the BSC to evaluate the potential financial and operational advantage that Pepsi Saudi would stand to gain by using BSC. Even though there are inherent shortcomings in the BSC system of management, the paper will seek confirmation by using empirical findings and reports from other organizations that have already embraced BSC, Pepsi Saudi ought to benefit immensely from the system when it is fully implemented.
INTRODUCTION: The Balanced Scorecard (BSC) was developed by Kaplan and Norton in the 1990’s, it is a management system designed to measure the entire performance of a company by measuring all relevant angles of the company’s operations. BSC requires the company to retain its core financial measurement, but it goes further and expands the measurement to other important business areas. The BSC looks at the entire business from four perspectives, the customer perspective, financial perspective, the internal business process and the learning and growth perspective. It collects and analyzes data relevant to the company.
And it helps managers to get clearer more meaningful picture of their company, which in turn enables them to plan, improve and execute operational goals. The objective of this paper is to advocate the adaptation of BSC by Pepsi Saudi. The strength and economic advantages of BSC and why it would be beneficial to Pepsi Saudi will be extensively discussed in this presentation. PEPSI SAUDI ARABIA: The Pepsi company of Saudi Arabia is comprised of two key divisions based on the western region of the country, one the Saudi International Project Company (SIPCO) and the other is Saudi Fruit Juice and Beverage Industry (SFJBI).
This paper will look at this merger and how it could use the BSC methodology to elevate its entire operation and increase its profit margin. BALANCE SCORECARD (BSC). Developed in the 1990’s by Kaplan and Norton, balanced scorecard is a business management system that uses measurement to verify strategic plans. It tries to align business operations to the strategies of the business, by measuring the performance of the business in relations to its goals, usually for a given time period. It relies largely on the premise that a business principle or a business function that could be measured could also be improved upon. “What gets measured gets done”.
If a company can establish a measurement system to analyze its performance, then that company can find a way to improve on its performance based on the result of the measurement. Experts generally agree that the companies that take the time to measure their own performance usually does better than the companies who do no possess the tools of measurement.
Based on the outcome of a business measurement BSC encourages managers to prioritize their efforts. The BSC does not focus on financial measurements alone, because financial measurement alone can not reveal all the important data needed for long term performance. The balanced scorecard incorporates such business elements based on the customers needs, employees, technology, and other critical elements that could help the company emerge stronger in the future. Essentially BSC takes stock of the whole business.
It uses the “feedback loop” to pinpoint all problematic areas and then it develops solutions for them. Managers and employees can then learn from those points that had been identified by the loop. It looks at the company’s current position then initiates the necessary strategies for correction. It uses learning, technical innovations and appropriate behavioral shifts and cultural identities to accommodate essential actions for the benefit of the company. BSC also sets aside time to study the applications that have been implemented, and then analyzes the results for effectiveness of those mechanisms or lack of effectiveness.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 17 May 2017
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