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shareholders point of view. 2. Customer strategy for creating value and differentiation from the customers point of view. 3. Internal business process - strategic priorities for various business process that create customer and shareholder satisfaction.
organizational change, innovation, and growth. The foundation for the strategy. By using the strategy map, organizations create a common and understandable goal for all units and employees. In developing a strategy map, organizations determine their goals and then work down as they plot the path that leads to the realization of the goals. For example, once the organization has financial and customer goals, they determine the internal business processes necessary to meet those goals. Once the internal business processes are determined, the organization determines the organization climate that will support the internal business process and determines a program of learning and growth. Some organizations have already implemented scorecards that use a mixture of financial and non-financial measures. Two popular scorecards are the stakeholder scorecard and the key performance indicator scorecard. The stakeholder scorecard identifies the major players in an organization such as shareholders, customers and employees. Then, the scorecard defines the organizations goals for each of these different constituents. However, the scorecard does not discuss the strategies needed to achieve these goals. The Key Performance Indicator scorecards offer a collection of financial and non-financial performance measurements that are organized into a list of perspectives. However, the overall strategy of the organization is not clear. A Balanced Scorecard enables all employees and units of the organization to understand the organizations goals and shows them how they can contribute to reaching those goals. Non-profit and government organizations (NPGOs) usually have trouble in determining their goal. Most of the initial scorecards of NPGOs have focused on increasing operational efficiency. It takes vision and leadership to move from continuous improvement of existing processes to thinking strategically about which processes and activities are most important for fulfilling the organizations mission. It is necessary for NPGOs to modify the architecture of the Balanced Scorecard, because financial success is not their primary objective. Many rearrange the structure to put customers or constituents at the top of the hierarchy. The
financial and customer objectives should be replaced by three different high-level perspectives:
1. Cost Incurred emphasizes importance of operational efficiency. 2. Value Created identifies the benefits being provided by the agency to its
citizens. 3. Legitimizing Support emphasizes the importance of meeting the objectives of its funding source. After these objectives are defined, an NPGO can define the internal processes and learning and growth that are necessary to meet the objectives. Once organizations developed the Balanced Scorecard, Kaplan and Norton began realizing that the scorecard was more than just a performance measurement system. Because the scorecard puts the organizations focus on the future, they soon developed their new measures into a management system. The Balanced Scorecard provides the recipe that enables ingredients already existing in the organization to be combined for long-term value creation. _______________________ Questions:
1. Does the balanced scorecard approach support or contradict the continuous
improvement concept? 2. Would this approach work with both Type X and Type Y workers? 3. Does this approach promote individualistic capitalism or communitarian capitalism?