Contemporary Management Technique
THE BALANCED SCORECARD
Douglas L. Jacobs, Instructor
August 19, 2010
AXA Equitable Life Insurance company; formerly known as The Equitable Life Assurance society of the United States was founded in 1859. AXA Equitable is a leader in the financial protection and wealth management industry. The company provides Life insurance, annuities and various investment products and services to millions of homes and is committed to helping families build sound financial futures. Since the Market downturn in October 2007, a challenging set of economic events has been rocking the financial services industry and AXA equitable has since experienced major changes to keep the company competitive. A well-developed balanced scorecard is what AXA Equitable needs in order to remain a worldwide leader in the financial services industry. In the past, management have believed that the factors critical to the success of a company were based solely upon financial measures; this is why the Balanced scorecard was developed. The BSC has gained increasing popularity as an effective management tool that aligns employee actions and goals with corporate strategy since first being introduced in 1992 (Davis & Albright, 2004). Robert S. Kaplan and David P. Norton proposed the balanced scorecard (BSC). The Balanced scorecard is a widely recognized tool to support decision making at the strategic management level which improves the satisfaction of the strategic objectives (Kaplan & Norton, 1992). The BSC provides feedback on internal business processes, performance, and market conditions in order to review the strategy and future plans and Large U.S. companies, such as General Electric and Federal Express, and non-profit and public organizations have implemented the BSC approach (Creamer & Freun, 2010). According to the module, “financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation (Baltzan, Phillips, & Haag 2010). The balanced scorecard deals with a proposed model that embraces both financial and non-financial aspects to measure performance of an organization in the financial services industry (Wu, Tzeng, Chen, 2009). The balanced scorecard[pic](BSC) is a multi-criteria evaluation concept that highlights the importance of performance measurement, and it recognizes that performance measurement should be incorporated in both of financial and non-financial measures; it captures not only a firm’s current performance but also the drivers of its future performance (Tseng, 2010). The balanced scorecard would be a positive force for AXA Equitable as it is a vital part of an overall strategy to become and remain an industry leader. Since times can be unsettling and while no company is immune from the challenges of a volatile market, management should strive to identify the factors that are critical to the success of the company. AXA Equitable needs to implement the measures listed on the balanced scorecard to achieve the company’s critical success factors. This will strengthen the company and continually improve AXA Equitable’s ability to manage through turbulent market conditions when necessary. The Balanced scorecard has four main parts. The balanced scorecard is developed along the four well-known perspectives of Financial, Customer, Internal Business Process, and Learning and Growth Performance, which, at any point in time of measurement, characterize the current status and future potential of organizations (Craig & Moores, 2010). The financial perspective includes the measure of an organizations financial performance. For instance, it measures revenue growth, shareholder’s value, assets under management, and cash...
Please join StudyMode to read the full document