Balanced Scorecard for the Automotive Industry
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Balanced scorecard for the automotive industry
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TABLE OF CONTENT 1. Introduction 2. Balanced Score Card development 3. Balanced Score Card in the automotive industry 4.1. Learning and growth perspective 4.2. Financial perspective 4.3. Customer perspective 4.4. Internal business process perspective 4. Summary and conclusions 5. References
1. Introduction “If you cannot measure it, you cannot manage it.” (Drucker, 1939)
But which data to measure and what targets to formulate, is the question many accountants ask themselves. Back in the early 90s, David Norton and Robert Kaplan developed the balanced scorecard approach to compensate for shortcomings they perceived in using only financial metrics to judge corporate performance. They recognized that in this new economy it was also necessary to value intangible assets (Kaplan, Norton, 1996). Therefore, they advised companies to measure non-financial factors as quality and customer satisfaction which by then were still somehow esoteric. According to Kaplan and Norton, “The Balanced Scorecard is a framework, that incorporates all quantitative and abstract measures of true importance to the enterprise and provides managers with the instrumentation they need to navigate to future competitive success” (Kaplan, Norton 2004).
Kaplan and Norton often compared their approach for managing a company to that of pilots viewing their instrument panels in an airplane cockpit: both have a need to monitor various aspects of their working environment (Kaplan, Norton, 1996). They were convinced that long-term success was not achieved by short and midterm achievement of financial goals only- meaning that a primary focus on
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Balanced scorecard for the automotive industry
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-------------------------------------------------
TABLE OF CONTENT 1. Introduction 2. Balanced Score Card development 3. Balanced Score Card in the automotive industry 4.1. Learning and growth perspective 4.2. Financial perspective 4.3. Customer perspective 4.4. Internal business process perspective 4. Summary and conclusions 5. References
1. Introduction “If you cannot measure it, you cannot manage it.” (Drucker, 1939)
But which data to measure and what targets to formulate, is the question many accountants ask themselves. Back in the early 90s, David Norton and Robert Kaplan developed the balanced scorecard approach to compensate for shortcomings they perceived in using only financial metrics to judge corporate performance. They recognized that in this new economy it was also necessary to value intangible assets (Kaplan, Norton, 1996). Therefore, they advised companies to measure non-financial factors as quality and customer satisfaction which by then were still somehow esoteric. According to Kaplan and Norton, “The Balanced Scorecard is a framework, that incorporates all quantitative and abstract measures of true importance to the enterprise and provides managers with the instrumentation they need to navigate to future competitive success” (Kaplan, Norton 2004).
Kaplan and Norton often compared their approach for managing a company to that of pilots viewing their instrument panels in an airplane cockpit: both have a need to monitor various aspects of their working environment (Kaplan, Norton, 1996). They were convinced that long-term success was not achieved by short and midterm achievement of financial goals only- meaning that a primary focus on
References: 1. Introduction “If you cannot measure it, you cannot manage it.” (Drucker, 1939) Figure nb.1: Link of mission, strategy and BSC (Wordpress, 2009) Second step: Define KPI’s, targets and measures