Order from us for quality, customized work in due time of your choice.
Assessment
This essay presents an assessment of a balanced scorecard used by an organization in a real estate business environment. A balanced scorecard serves as a performance management tool (Eckerson, 2011). When a company optimizes the implementation of a balanced score card, then the company assumes a capacity for managing performance based on strategy. Using the balanced scorecard, the organization evaluates its business strategy to ensure that it aligns with strategic fundamentals, which will shield it from unexpected changes in its business environment. Practically, the balanced scorecard acts a tool for the organization to review its position against any of the Porter’s Five Forces relevant to the real estate market (Porter, 2008).
A benefit of the balanced scorecard is that it allows the company to define and link its business strategy with firm operations in a consistent and insightful manner (Malik, 2005). The balanced scorecard has provisions for integration of different organization functions such as finance and marketing. Therefore, it provides a multilevel system for business optimization (Kaplan & Norton, 2006).
For an organization in the real estate industry, the balance scorecard aligns organizational strategy along the cost figures and performance measurements. These include customer satisfaction, quality and speed of support, business alignment and the ease of doing business (Kaplan & Norton, 2001). Different employees vary in their importance to the organization because they affect the customer relationships with the organization in different ways (Bose & Thomas, 2007). The balance scorecard ensures that each employee has awareness of the business strategy of the organization (Kaplan & Norton, 2001). Moreover, for performance measurement using balanced scorecard, each employee has personal or team objectives in line with the organizational strategy such that their compensation ties to their qualitative and quantitative output. The balanced scorecard relies more on the quality rather than the quantity of information. Senior management at the organization is able to make maximum use of the performance measurement by emphasizing on quality information that has a considerable effect on the competitive advantage of the organization (Nugent, 2002). Management strictly follows the Pareto rule while formulating key performance indicators for the dashboard (Craft & Leake, 2002).
Missing Functions, Business Needs and Long-term People Needs
What is missing from the balance scorecard is an optimization of the tactical processes driving the organization (Alexander, 2007). The balance scorecard is not suitable for monitoring purposes, and the organization would become more efficient after incorporating a tactical or operational dashboard (Ericson, 2008). Without a tactical dashboard, the organization still lacks the capacity to analyze activities at the departmental level that do not readily reflect on the organization strategy (Eckerson, 2011). Additionally, the balanced scorecard measurement of customer relations with the company is not clear. The organization faces a difficulty of assigning a definite parameter to indicate whether the customer’s perspective effectively links with other scorecard perspectives within the organization (Hepworth, 1998).
The balanced scorecard is a form of a strategic dashboard. In essence, it measures the alignment of the organization’s business functions with its long-term strategy. However, different functions of the organization have different objectives and hence strategies to fulfill as much as they seek to deliver results for the overall business strategy. It would be appropriate if the balanced scorecard for the organization includes customized and detailed scorecards for each business function. According to Brown and McDonnell (1995), having detailed scorecards allows the organization to optimize strategy alignment with operations within a year as a short-term measurement for each organizational function while also pursuing an overall organizational strategy. Alternatively, as Eckerson (2011) suggests, the organization should use a business unit whose operations cover the whole value chain of activities so that it captures all business aspects. These include the business strategy, targeted customers, specific processes and their operations as well as the administration (Eckerson, 2011).
References
Alexander, J. (2007). Performance dashboards and analysis for value creation. Hoboken, NJ: John Wiley & Sons, Inc.
Bose, S., & Thomas, K. (2007). Applying the balanced scorecard for better performance of intellectual capital. Journal of Intellectual Capital, 8(4), 653-665.
Brown, J. B., & McDonnell, B. (1995). The balanced score-card: short-term guest or long-term resident? International Journal of Contemporary Hospitality Management, 7(23), 7-11.
Craft, R. C., & Leake, C. (2002). The Pareto principle in organization decision making. Management Decision, 40(8), 729-733.
Eckerson, W. W. (2011). Performance dashboards: measuring, monitoring, and managing your business (2nd ed.). Hoboken, NJ: John Wiley & Sons.
Ericson, J. (2008). Simply operational. Dashboard Management Review, 18(12), 16-17.
Hepworth, P. (1998). Weighing it up – a literature review for the balanced scorecard. Journal of Management Development, 17(8), 559-563.
Kaplan, R. S., & Norton, D. P. (2001). The strategy-focused organization: how balanced scorecard companies thrive in the new business environment. Concentrated Knowledge for the Busy Executive, 23(1), 1-8.
Kaplan, R. S., & Norton, D. P. (2006). Alignment. Boston, MA: Harvard Business School Publishing.
Malik, S. (2005). Enterprise dashboards: design and best practices for IT. Hoboken, NJ: John Wiley & Sons, Inc.
Nugent, J. H. (2002). Plan to win: Analytical and operational tools – Gaining competitive advantage. New York, NY: McGraw-Hill.
Porter, M. E. (2008). The five competive forces that shape strategy. Harvard Business Review, 79-93.
Order from us for quality, customized work in due time of your choice.