What is a Balanced Scorecard?
The balanced scorecard is one of the critical strategic management tools that facilitate the organization to track performance regarding varying perspectives. Financial, customer, internal processes, and learning & growth perspectives are in the spotlight. The financial perspective indicates conventional measures, including profitability, shareholder values, and sales & revenues. A customer perspective shows how the organization meets the needs and demands along with the practical measures for customer satisfaction. Internal process is also a critical perspective that indicates effectiveness and efficiency measures. The combination of production and innovation is also one of the primaries focuses of the organization. Eventually, learning & growth is a prominent perspective that evaluates the ability to change or adapt things. Knowledge management, training, and development are several potential facets regarding this perspective. The application of a balanced scorecard is critical to assessing the firm’s performance in the competitive landscape (Soderberg, Kalagnanam, Sheehan, & Vaidyanathan, 2011). This custom furniture manufacturer must strive for practical measures and proper evaluation to set the foundation for success and competitive advantage. This strategic management tool enables a holistic view of organizational performance. The organization can apply this tool to ensure strategic alignment and enhance its performance measurement. The organization can also boost communication and collaboration in the internal business climate based on these measures or perspectives. Improving the overall performance of the business is imperative, and a balanced scorecard can become a crucial driver of it (Balancedscorecard.org, 2023).
Briefly Discuss the Four Perspectives of the Balanced Scorecard and Analyze What Each Means to Organization
The Balanced scorecard is critical for this custom furniture manufacturer, especially in the context of four perspectives. Each perspective means to the organization.
Financial Perspective: Measuring or evaluating the financial objectives of the organization is essential. John and Deborah can measure the revenues, return on investment, and profitability to obtain valuable insights. The housing market is declining, which has created negative impacts on revenues and profitability. Hence, in this situation, it is vital to evaluate the financial health of the organization, notably when it comes to cost and revenue structure. Assessing the economic sustainability of global expansion is crucial to deriving implications (Adnan, Khan, & Islam, 2019).
Customer Perspective: This perspective stresses customer satisfaction and brand loyalty. The organization can assess the customer satisfaction index, retention rates, and market share. The firm has gained a good reputation due to excellent customer service to enhance the visibility of customer satisfaction. Yet, the organization must focus on this perspective by considering valuable feedback. Customer expectations can change with time in this industry, and it is good to make some adjustments to keep customer satisfaction in the loop in this competitive and dynamic business landscape (Kaplan, 2012).
Internal Process Perspective: This viewpoint concentrates on internal functioning as far as the organization’s goals and objectives are concerned. There are measures or metrics regarding effectiveness, efficiency, quality, and innovation, as these must be in the loop to move forward. The firm contains vertical integration, as has been its considerable strength due to in-house designers. Thus, the organization will strive for streamlined production functions, product development, innovation, and quality management. Market demands and expectations are becoming diverse over time, and assessing and improving the internal processes and functions is essential to be relevant (Niven, 2010).
Learning & Growth Perspective: It is a crucial perspective that focuses on the firm’s resilience and adaptability in the dynamically changing business landscape. The firm has strived for global expansion. It is essential to invest in skill development to make the business and its employees ready for the change. Fostering innovation is one of the critical considerations, and a prepared workforce is a primary driver in this context (Balancedscorecard.org, 2023).
In Addition to the Balanced Scorecard, Provide an Overview of Ethics and One Other Strategy that Would be Part of Your Company‘s Strategic Framework for Global Expansion.
The organization has a strategic framework for global expansion by carrying balanced scorecards. Nonetheless, there may be some ethical implications and other strategic choices. In this strategic framework, ethics can become one of the vital components, especially in the context of global expansion. Indeed, the ethical foundation becomes integral, and it must be aligned with values and sustainable practices. The firm needs to be progressive by developing a code of ethics. This code of ethics should be embedded in the corporate culture and strategic management framework. This ethical code will streamline inclusion, transparency, accountability, compliance, fair treatment of employees, and eco-friendly consideration. Also, maintaining the value of cultural variances is crucial, and the ethical code will drive it effectively (Kunc, 2018). The firm needs to improve its reputation and image in the global business climate. Ethical behavior and activities can also help to evade vulnerabilities related to regulations and cultural differences. Customers will also maintain trust if these moral values are in the loop. Internally, the firm can also build a trustworthy climate, which can further lead to a sustainable relationship with employees. Market entry strategy is also one of the crucial facets of the strategic framework. The firm must determine how it can enter and function in the new market. There may be several market entry strategies, such as FDI, licensing, franchising, importing, exporting, strategic alliances, mergers, and acquisitions. The firm can also prefer wholly owned subsidiaries and joint ventures as strategic options to be successful in the global business environment. The selection of the strategy depends on the firm’s intention regarding the control of the business in the worldwide business setup. The critical assumption is that the firm must adhere to the local climate, and it will justify the localization. Alliances and joint ventures can facilitate the company’s sharing of people, processes, and technologies with less risk probability (Lymbersky, 2008).
Why is it Important to Combine Different Strategies When Pursuing Global Expansion?
Combining multiple strategies in the global expansion campaign is crucial to setting the foundation for success and competitive advantage. Risk diversification is one of the essential reasons for this combination. There may be several risks in the global markets. There may be economic, regulatory, political, and many other challenges. Thus, maintaining the combination of strategies is imperative as far as risk exposure is concerned. For example, the firm can come up with a compelling blend of alliances, ventures, and wholly owned subsidiaries to become relevant and competitive despite these challenges. The combination of the strategies becomes integral because the firm strives for localization. Unique cultural values and varying customer preferences may compel the organization to improvise strategically (Pathak, 2020). A single and specific strategy is not practical in dynamic global business conditions. Resource optimization and allocation are also the crucial motives or reasons behind the strategic combination. The need for potential resources, including investments, employees, time, and funding, is in the limelight. The mixture of the strategies can facilitate the firm to optimize its resources with an effective and efficient allocation. The market also presents several opportunities, and well-optimized and allocated resources can help get things in favor. The organization needs to contain strategic learning to enhance its competence in the global market. This strategic learning may become possible if the organization is flexible in adopting and changing its strategies. These are some critical reasons for the combination of strategies in global expansion (Kelly, 2023).
References
Adnan, A., Khan, A. N., & Islam, M. S. (2019). Competitive Position of Bangladesh and China in the Global Clothing Export Market: An Analysis of Revealed Comparative Advantage. Trends Economics and Management, 13(34). doi:10.13164/trends.2019.34.9
Balancedscorecard.org. (2023, March 10). What is a Balanced Scorecard? https://balancedscorecard.org/bsc-basics-overview/
Kaplan, R. S. (2012). The balanced scorecard: comments on balanced scorecard commentaries. Journal of Accounting & Organizational Change, 8(4), 539-545. doi:https://doi.org/10.1108/18325911211273527
Kelly, N. (2023). Take Your Company Global: The New Rules of International Expansion. Berrett-Koehler Publishers.
Kunc, M. (2018). Strategic Analytics: Integrating Management Science and Strategy. John Wiley & Sons.
Lymbersky, C. (2008). Market Entry Strategies: Text, Cases and Readings in Market Entry Management. Christoph Lymbersk.
Niven, P. R. (2010). Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results. John Wiley and Sons.
Pathak, R. K. (2020). International Business Management. Shanti Publication.
Soderberg, M., Kalagnanam, S., Sheehan, N. T., & Vaidyanathan, G. (2011). When is a balanced scorecard a balanced scorecard? International Journal of Productivity and Performance Management, 60(7), 688-708. doi:https://doi.org/10.1108/17410401111167780
Assignment Details
Description
Deborah enters your office ready to discuss the project. She discusses her feedback on the plan thus far. She states that your team is doing an excellent job researching and you’ve been keeping her up-to-date on your findings. She commends you for your focus on effective management strategies because your team has been looking at every aspect of the company and considering both internal and external pros and cons. She asks that your team now apply the findings to develop a strategic framework so that the company can begin its global expansion programs. You decide that Deborah has brought up another good point and decide that the balanced scorecard would make a good part of strategic framework.
A balanced scorecard suggests that we view the organization from four perspectives (the learning & growth perspective, the business process perspective, the customer perspective, and the financial perspective). Create a 4-6 page paper that discusses the following:
What is a balanced scorecard?
Briefly discuss the four perspectives of the balanced scorecard and analyze what each means to your organization.
In addition to the balanced scorecard, provide an overview of ethics and one other strategy that would be part of your company’s strategic framework for global expansion.
Why is it important to combine different strategies when pursuing global expansion?
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