Balanced Scorecard in Pharmaceutical Company
THE BALANCED SCORECARD IN AN INDONESIAN PHARMACEUTICAL COMPANY
A CASE STUDY IN PT. DEXA MEDICA
1. INTRODUCTION
1.1. Background of the Study
In modern competitive global economy, it is more important than ever to understand the process of value creation in the organization. The need to manage with a high level of customer focus, a clearer understanding of core business processes, the necessity of motivation and commitment of employees, the need for change on a continuous basis, and effective strategy implementation have led to the increased transparency of measuring business performance and the value drivers.
Owners generally have a pretty clear picture of the direction in which they want their company to go, but their strategy to achieve their goals is not very clear to anyone else in the company. Research shows that most companies fail to execute strategy successfully (Kaplan, Norton 2001). Thus, it appears promising to use the balanced scorecard methodology to integrate environmental and social management with the general management of a firm (Figge et al. 2001a, 2001b).
Kaplan and Norton (1992) presented the balanced scorecard (BSC) as a performance measurement tool. The founding idea of the concept is that measures should be chosen in a way that gains the active endorsement of the senior managers of the organization, reflecting both their privileged access to strategic information, and the importance of their endorsement and support of the strategic communications that may flow from the balanced scorecard once designed. The balanced scorecard has gained prominence as a way of integrating financial and non-financial performance measures into an overall control system (Atkison et al. 1997, Hoque, James 2000, Malina, Selto 2001, Simons 2000).
The BSC addresses the need for multiple measures of performance and provides a strategic framework, which specifically encourages the use of both financial and non-financial measures along four
A CASE STUDY IN PT. DEXA MEDICA
1. INTRODUCTION
1.1. Background of the Study
In modern competitive global economy, it is more important than ever to understand the process of value creation in the organization. The need to manage with a high level of customer focus, a clearer understanding of core business processes, the necessity of motivation and commitment of employees, the need for change on a continuous basis, and effective strategy implementation have led to the increased transparency of measuring business performance and the value drivers.
Owners generally have a pretty clear picture of the direction in which they want their company to go, but their strategy to achieve their goals is not very clear to anyone else in the company. Research shows that most companies fail to execute strategy successfully (Kaplan, Norton 2001). Thus, it appears promising to use the balanced scorecard methodology to integrate environmental and social management with the general management of a firm (Figge et al. 2001a, 2001b).
Kaplan and Norton (1992) presented the balanced scorecard (BSC) as a performance measurement tool. The founding idea of the concept is that measures should be chosen in a way that gains the active endorsement of the senior managers of the organization, reflecting both their privileged access to strategic information, and the importance of their endorsement and support of the strategic communications that may flow from the balanced scorecard once designed. The balanced scorecard has gained prominence as a way of integrating financial and non-financial performance measures into an overall control system (Atkison et al. 1997, Hoque, James 2000, Malina, Selto 2001, Simons 2000).
The BSC addresses the need for multiple measures of performance and provides a strategic framework, which specifically encourages the use of both financial and non-financial measures along four