Challenge 9: Strategic Performance Management Systems and the Balanced Scorecard
Summary of Challenge 9: The Board of Directors at High-End Lifts is very impressed with your recommendations and analysis of the performance management systems suggested in Challenge 7 and 8. They’d like to develop a performance management system that ties the company’s strategic mission and vision to specific performance metrics (called key performance indicators, KPIs). They’ve heard about the balanced scorecard and would like your help in setting up an appropriate system for tracking the performance and achievement of the company’s strategic priorities. This system will also be used to evaluate the performance of the top management team (CEO, COO, CFO, CCO).
Suggested Preparation: Read the information in the Challenge 9 Workbook to prepare for the challenge assignment. Watch the videos to gain a stronger understanding of the concepts.
Task #1: Map the strategic priorities embedded within the mission and vision statement (green tab) to the four perspectives within the balanced scorecard. Use the text box space provided to write your suggestions for the four perspectives. Feel free to include aspects of the mission in more than one perspective.
Task #2:Create KPIs (key performance indicators) for each of the four perspectives for the purpose of tracking the performance of the company and measuring strategic achievement. Ensure that the measures are objective (measurable and observable). Include at least 3 KPIs for each perspective.
Task #3: Ethical Issue: Suppose the CEO were to recommend moving the production operations to a developing country to take advantage of lower labor rates and less restrictive environmental regulations. These changes would increase profitability and strengthen the company’s financial position.
Does this strategy align with the company's mission and vision statement? Would you support this decision? What are some of the issues that should be considered (evaluate the perspective of customers, employees, the local community, and the environment)? Do you think the balanced scorecard with the four perspectives that are listed are comprehensive enough to include these broader issues? Explain how the use of a balance scorecard motivates ethical behaviors and ethical decision making (maintains a balance in decision making). Compare the balanced scorecard to performance measurement systems that track only financial measures.
Write a letter to the Chairperson of Board of Directors at High-End Lifts. First, explain the balanced scorecard, share your mapping and recommended KPIs for the company. Then, discuss the pros and cons of relocating the manufacturing activities of the firm to a developing country. Explain how the decision impacts the company's strategic mission and vision achievement and the KPIs that you have created. Provide some alternative solutions to improve profitability while maintaining the heart of the company's mission and vision for the future.
Discussion Forum Discussion Board Post: Post your memo on the discussion board. Respond to at least two other posts. Challenge the assumptions or conclusions that peers have posted in their discussions.
Please help
