Balanced Scorecard for Ford Motor Inc.

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The Balanced Scorecard for Ford’s North American Business Unit

Table of Contents
Executive Summary…………………………………………………………………….2 Mission Statement………………………………………………………………………2 Balanced Scorecard…………………………………………………………………….3 Financial Perspective………………………………………………………………......5 Customer Perspective………………………………………………………………....10 Internal Business Process Perspective……………………………………………….12 Learning & Growth Perspective……………………………………………………..14 Conclusion………………………………………………………………………….….16 References……………………………………………………………………………..17 Executive Summary

The Ford Motor Company, founded in 1903 by Henry Ford, is synonymous with American innovation and capitalism. With iconic branding and revolutionary manufacturing processes, Ford was the world’s No. 2 automaker for decades, second only to General Motors (“Ford Motor Company”, 2012). But the winds changed for the American automakers, the combinations of poor leadership, complacently, high manufacturing costs, poor customer satisfaction, labor disputes and ever stronger foreign competition from Toyota, Hyundai, Honda and others cost them valuable global market share and customer loyalty. By 2006 Ford did something that many thought was a desperate move by an ailing giant; they borrowed $23.6 billion. The loan became Ford’s lifeline when the global financial crisis of 2008 hit and the auto industry tanked with it. By 2009, Ford was the only American automaker that did not receive a government bailout, and by 2010 Ford’s US sales surpassed GM’s, a feat that hadn’t happened in over 50 years (“Ford Motor Company”, 2012). During this time of financial crisis, Ford has adopted a new strategy that it calls “ONE Ford” which has dramatically restructured the company’s mission and goals. By using the Balanced Scorecard approach Ford’s business unit leaders can translate the ONE Ford’s “lofty vision and strategy statements” into actionable “objectives and measures” at the local level (Kaplan & Norton, 2007, p. 152). Mission Statement: ONE Ford Mission

ONE Team

• People working together as a lean, global enterprise for automotive leadership, as measured by: Customer, Employee, Dealer, Investor, Supplier, Union/Council, and Community Satisfaction

ONE Plan

• Aggressively restructure to operate profitably at the current demand and changing model mix • Accelerate development of new products our customers want and value • Finance our plan and improve our balance sheet

• Work together effectively as one team

ONE Goal

An exciting viable Ford delivering profitable growth for all. (“One Ford,” 2012)

The goal of ONE Ford is to create an exciting and viable company with profitable growth for all. The output of ONE Ford is:

• Great Products, defined as those that are high quality, green, safe and smart. • Strong Business, based on a balanced portfolio of products and global presence; and • Better World, accomplished through our sustainability strategy. (“Company,” 2012)

The Balanced Scorecard

The Balanced Scorecard translates an organization’s mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system. The Balanced Scorecard retains an emphasis on achieving financial objectives, but also includes the performance drivers of these financial objectives. The scorecard measures organizational performance across four balanced perspectives: financial, customers, internal business processes, and learning and growth. (Kaplan & Norton, 1996, p. 7)

Ford’s operations are divided into automotive and financial sectors that are then broken down into five operational business units: North America, Europe, Asia-Pacific and Africa, South America and Ford Credit. The Balance Scorecard features Ford’s total financial metrics, since the necessary numbers to calculate the metrics for just the North American business unit...
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