The four perspectives at a glance Essay
The four perspectives at a glance
The BSC uses data to articulate performance management with the primary objective being the implementation of corporate strategy. The BSC methodology primarily employs four perspectives: financial, customer, business process perspectives and learning and growth perspectives. It calculates present performance without ignoring the importance of future performance. (1) FINANCIAL PERSPECTIVE: The BSC recognizes the importance of financial data, but it does not want the emphasize on financial data to overshadow the other necessary perspectives that deserve equal amount of attention.
In BSC adequate, timely and accurate funding are seen as key business requirements. But the BSC methodology goes a little further, it emphasizes that financial data be included in the corporate data base and be available by automation. The BSC method also explores financial risk assessments and cost benefit analysis as part of the data collection in the financial perspective. (This will be discussed in detail in the main body of the study) (2)CUSTOMER PERSPECTIVE: The BSC methodology advocates customer focus and satisfaction, it insists that the company must not only satisfy its customers but it must do so without losing money in an attempt to provide superior services or products to those customers.
According to the BSC, the customer perspective is a key indicator of the functional health of the company. Poor customer performance is usually an indication of corporate performance in the future. If the customers are not satisfied they will take their businesses somewhere else, and that is an indication of poor business performance in the future. BSC mandates a satisfaction metric to measure the customer satisfaction. The aim is to identify all customer groups, analyze their needs and provide services to them accordingly. But the company cannot afford to lose profitability in an attempt to satisfy its customers. ( This will be discussed in detail in the main body of the study). (3)
BUSINESS PROCESS PERSPECTIVE: The BSC defines this as the internal process. It enables the managers to become familiar with the functions of the company, and it services and operations. It makes sure that the products and services meets the requirement of the customers. This is highly internal, i. e the process is preferably developed and handled by corporate managers and workers as who have intimate knowledge of the company, as opposed to consultants who are essentially corporate outsiders.
The mission oriented process refers to the functions of government offices, and they could present some unique problems. On the other hand, the support process is more repetitive and generic and therefore easier to measure. (This will be discussed in detail in the main body of the study). (4) LEARNING AND GROWTH PERSPECTIVE: The BSC describes this perspective as employee training in corporate culture as well as individual training and improvement. It sees employees as the mainstay of the corporation. The training would be regular and continuous.
The idea is to avoid “brain drain” from the company. So employees would be trained in all new and relevant technologies. Kaplan and Norton emphasized that “learning is more than training”, it includes mentors and tutors in the organization. (Kaplan&Norton 1996). (This will be discussed in detail in the main body of the study). CAN PEPSI SAUDI BENEFIT FROM BSC? To answer that question it is important to know where Pepsi Saudi came from in terms of business its identity and then analyze the reasons it chose to adopt the BSC management module, and then superimpose the analysis on the reports of other corporations that have adopted the BSC.
It is worth noting that Pepsi’s decision to join the ranks of companies that have chosen to implement BSC was not made in a vacuum. The fact is that BSC had become a familiar and efficient working module for many successful companies. Also Pepsi Saudi has had its own incredible business and financial success, and by adopting BSC it chose to follow many world class businesses. With the implementation of the balance scorecard methodology, Pepsi Saudi have joined ranks with such business heavyweights as Exxon mobile, British telecommunications worldwide, Hilton hotels, IBM, UPS, Volvofians of Sweden and much more.
These are impressive list of companies, and again the decision for them to adopt the balanced scorecard system was not made in a vacuum, because the stakes are too high. On February 2nd 2002 the AME-INFO reported the merger of Saudi industrial projects company (SIPCO) and Saudi Fruit Juice and Beverage industry (SFJBI) in the western region of Saudi Arabia. The reasons for the merger were many, they wanted to expand their command of the beverage industry, and they wanted to remain the best manufacturing operation in the industry.
It is not difficult to imagine that Pepsi Saudi would adopt BSC in order to maintain its dominance of the industry. Before the merger it introduced the Pepsi twist (Pepsi taste laced with a twist of lemon) “in order to satisfy customers demand for something extra in their soft drink” AMEINFO October 8th 2001. It unfolded many ad campaigns designed to capture new customers and retain old ones. The ad campaign targeted all major social events of the kingdom, including football games that featured the stars of the popular sport. As this study will show continue the company has continued to grow under BSC.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 17 May 2017
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