People barrier Essay
In order to overcome the people barrier, BSC outlines a system known as cascading. Essentially it give all of the team members or all of the employees a chance to actually demonstrate exactly how they contribute to their teams objective. The entire system is driven from the top to the bottom. Management would be able to have “direct line of site” to all levels by implementing the cascade system. the management would need to redesign how it awards incentives. When the focus is on rewarding long term achievement as opposed to short term, employees tend to respond with long term focus, as they work towards achieving the goal.
So if long term objectives are created and proper values and incentives placed on them, then the rest of the team would naturally follow. This is an important point because, when employees are rewarded based on short term expectations, then the entire effort would be based on attaining that short term incentive. (3)
RESOURCE BARRIER: For the resource barrier, an organization that is genuinely concerned about achieving BSC must allocate adequate budgetary resources to it. To do otherwise would simply be folly. No strategy would get off the ground without real financial commitment. Human and financial resources should be part of the consideration during the planning of the strategy. It just would not make sense not to allocate the necessary resources. (4) MANAGEMENT BARRIER: The last barrier is the management barrier, there is really no doubt that management participation about the importance of an earnest management participation in order for the strategies to work.
If management would not show true commitment, then why would the rest of the team. If the team leader is absent why would any one else pay attention. (Nevin 2003). When learning is prescribed as part of the strategy and when accurate evaluation are made based on the numbers from the scorecard, then its easier to read the results and compare them to the original hypothesis. If the report does not measure up to the hypothesis, then a different approach would be necessary.
The point is that if all of these four strategic elements are implemented, and the required evaluations are made regularly, the company gives itself stands an excellent chance of reversing course if the numbers indicate so. CRITICAL OBSERVATIONS: It would be unrealistic to think that the entire system would not have some criticisms, and there are some legitimate questions on how effective the system really is. For sure it is an expensive proposal to implement. It requires that management and team leaders must have hands on approach in order to achieve the stated goals. But it is not always easy to have that kind of high level participation. So it could be a problem.
(Molleman 2007). Some have argued that it is difficult to relate one measurement to the other. For instance, how could a change in one perspective have a direct correlation to another. It is not quite clear how change in a particular measure would affect another measure. Others have argued that BSC does not address what the appropriate balance ought to be when addressing the stakeholder value. Davidson 2002, reports that the BSC correctly anticipates the value for the shareholders and the customers, but it does not articulate the needs of the employees.
It also asserts that the requirement for top management participation centralizes the methodology on the high level management. In a project that requires a good degree of knowledge, Davidson argues that the top-down approach may not be the best. But on the issue of management participation, if the commitment is high enough, then management ought to be able to find the time to allocate to the idea, because the long term benefits could be enormous ,if the system is followed correctly. The point is that the benefits negates the shortcomings.
All indication is that BSC is a business method that is worth pursuing, and there are definite measures that could be taken in order to mitigate some of the shortcomings. If an organization follows the directives that were outlined by Kaplan an Norton, then they would have significantly elevated their chances for success in their endeavor. First Kaplan and Norton insists that on the question of wether an organization is applying the right measure of perspectives, they recommend that a stable BSC should have a good balance of both lagging and leading indicators.
That would enable them to see a clear picture of not only past efforts but also the plans of the future. A company should not implement too many indicators. Organizations should focus on those indicators that clearly addresses their strategy. So with the correct combination of lagging and leading indicators as well as the correct mixture of the most critical indicators, Kaplan and Norton belief that the organization would do just fine. (Kaplan & Norton 1996). They also advised against making a “quantitative link” between non financial indicators and financial indicators.
Since lag time may be influenced by many factors, it is not advisable to link non financial indicators and financial indicators. Also Kaplan and Norton observed that failure would almost be guaranteed if senior management simply dump the system to middle management. Therefore it emphasizes that senior management must remain engaged, it must define the performance measurement, thereby making the objective clear to all levels of the team. It is not enough to have a senior leadership, if the senior leadership is not working with the rest of the team to achieve the objective.
All segments of the company or organization would need to be involved in order for the BSC to work as designed. Developing the process does not have to be protracted, because if implementing it becomes too long then strategies may change during this period, and that would not be a good for the process. Therefore they recommend that the development process ought to be short. (Kaplan & Norton). It would be inadvisable to use the BSC just for compensation purposes, therefore it is recommended that compensation be linked only when it is involved in translating strategy.
Subject: Kaplan & Norton,
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 17 May 2017