FACULTY OF BUSINESS SCIENCES

DEPARTMENT OF MANAGEMENT SCIENCES

MBM732- STRATEGIC PLANNING AND MANAGEMENT

GROUP 4

NAME SURNAME REG NUMBER

TINASHE SANYANGOWE R144683B

RODWELL NDENGEYA R207942C

ARTLEY SIBANDA R2216768G

IAN TAKAEDZA R2214025Y

PRIESTLEDGE NHAMBURO R228768A

ROSEBUD KAMUZUNGUZE R22122554A

FAITH HOBWANA R2116827B

FAITH GAVAZA R2210619P

FAITH TORO R2215421P

GRACIOUS CHIHURI R122652C

MASIMBA MAPFUVA R2215663M

WENDY MABASA R2211555A

TATENDA CHIORESO R2216805P

LORITA KANENGONI R2213667N

MARIANNE CHINYENZE R221551Y

TERRENCE Q ZIMUNYA R2215417A

ASHLEY MUTAMBARIKA R211644N

TENDAI MAMVURA R2214464J

EDINA MUDZINGANYAMA R222155X

TATENDA MAKAMURE R2214642Q

QUESTION [3]
BALANCED SCORE CARD CAN BE APPLIED WHEN ASSESSING
MANUFACTURING FIRM’S PERFOMANCE. DISCUSS THIS ASSERTION CITING
RELEVANT EXAMPLES. [20 MARKS]
INTRODUCTION

The choice of measures to evaluate the performance of business units is one of the most
critical challenges of several companies. This is due to intense competition, increased
expectations, and augmented customer demand and consciousness (Sroka & Szanto,
2018; Stonkute et al., 2018). Pakurár et al. (2019) emphasized that a performance
measurement system of a firm should integrate different measures for ensuring effective
strategic performance. The Balanced Scorecard (BSC) as performance measure was
developed by Kaplan & Norton in the early 90’s which includes both financial and non-
financial measures. The main purpose of the scorecard is to collect information in order
to keep organizations’ focus on their objectives and create suitable methods to compare
and to improve their performance.
According to Kaplan & Norton (1996a), the balanced scorecard is derived from an
organizations vision and strategy and view organizational performance from four
perspectives which are
i. Financial
ii. Customer
iii. Internal Business process
iv. Learning and growth.
Together, these elements create value, leading to customer and stakeholder satisfaction
and good financial performance. The balance scorecard can therefore be applied when
assessing manufacturing firms’ performance. A balanced scorecard is strategic
management performance metric that helps companies identify and improve their internal
operations and achieve their external outcomes. It measures past performance data and
provides organisations with feedback on how to make better decisions in the future.

THE FINANCIAL PERSPECTIVE

The goal of the firm is to earn a return on the investment made and manages key risks
involved in running the business. Financial data such as sales, expenditure and income
are used to understand financial performance. These financial metrics may include dollar
amounts, financial ratios, budget variances or income targets. In a manufacturing firm
financial perspective can be used on budgets where for example budgeted production is
compared with the actual production. This will help to improve in the production if the
produced units did not reach the units budgeted for. It points out any challenges being
faced in the production process be it being caused by unserviced machines, poor quality
raw materials, unskilled labour posing for losses. This helps the firm to access its
performance. However, for the financial perspective to be applicable skilled labour with
financial appreciation is required it measures the going concern of the firm financially.

An example of Dairiboard Zimbabwe Private Ltd financial perspective using the BSC in
assessing its performance.

AREA OBJECTIVE MEASURE TARGET INITIATIVE ACTUAL

Maximize Develop cost <10% Activities or 9%
value at least to revenue programs
Financial cost to ratio based costing
Perspective increase programs
revenue

In the above example the company targeted to lower cost to revenue ratio to less than
10% was achieved given the actual is 9%. This shows that the initiatives introduced were
fruitful as the business BSC has becomes efficient thereby improving its profitability.

CUSTOMER PERSPECTIVE
The customer perspective monitors how the fir is providing value to its customers and
determines the level of customer satisfaction with the firm’s products. Customer’s
satisfaction is an indicator of the company’s success thus how well a company treats its
customer can obviously its performance thereby profitability. In a manufacturing firm,
customers can be given a platform to provide feedback about their satisfaction with
current products. It enables the firm to step out of its comfort zone to view itself from the
customer’s point of view rather than just from an internal perspective which enhances its
performance. Performance in the manufacturing of soft drinks “Coca-Cola” can be
assessed by improving product quality from analysis, the trend of customer taste and
preferences. Enhancing the customer shopping experience by making the bottle of the
drink handy and quantity which is ideal and pricing adjusted to suit consumer
preferences.
The Coca Cola Company customer perspective using BSC model

AREA OBJECTIVE MEASURE TARGET INITIATIVE ACTUAL

Customer Have high Invoices, Increase sales Improve The 20%
Perspective average customer by 15% Product Mix
customer feedbacks And Create
rating Combo Deals
&quality
products

In the above model the Coca Cola’s customer perspective focused on the objective of
having a high average customer rating and quality products. The company’s target was to
increase sales by 15% and the actual is 20% this shows that the initiatives was effective
enough and it even surpass the target.

THE INTERNAL PROCESS PERSPECTIVE

The firm has to set the internal operational objectives which might include work-process
improvement, quality optimization and improvement in capacity utilization. This will
help in assessing performance by investigating how well products are manufactured, any
gaps tracked, delays, bottlenecks, shortages or waste in the internal control system. For a
Coca-cola manufacturing firm, the internal process perspective can help to assess
what the firm is good at and maximize that. It might be the fact that its ingredients to
manufacture “Coke” is confidential thereby making “Coke” manufacturing demand high.
The internal process will have to increase on the quantity and quality as well. Marketing
strategies can be formulated and pursue innovations that lead to the creation of a new and
improved ways of meeting the needs of customers.
Delta Beverages Pvt Ltd BSC model in assessing its internal process performance

AREA OBJECTIVE MEASURE TARGET INITIATIVE ACTUAL

The Internal Reduce Number of <5% Total quality 4%
Process rework and rework per management
Perspective work unit time programs

In the aspect of internal process perspective Delta beverages Pvt ltd highlighted reduce
rework and workload as its objective and units used to measure was number of re-work
per unit time, with a target of less than 5% and the actual was 4%. This shows that the
BSC enables the company to establish a position that their initiative of total quality
management programs was effective since It ranges within target.
THE LEARNING AND GROWTH PERSPECTIVE
This perspective is related to intangible drivers of organizational performance. It focuses
on human capital, information capital an organizational capital. The objectives of
learning and growth perspectives are an assessment of skills, talent and knowledge,
information about safety system infrastructure investment and data protection system.
Updates to staff engagements, employee alignment, knowledge management and
teamwork. For a manufacturing firm like the Coca-Cola company latest technologies
should be used for a competitive advantage within the industry.

The Learning and Growth of Coca Cola company for using the BSC model

AREA OBJECTIVE MEASURE TARGET INITIATIVE ACTUAL

The Equip Percentage >60% Identify and 100%
Learning workers with modern tools procure
And Growth modern tools acquired modern tools
Perspective for across
 productivity departments

From the learning and growth perspective the Coca cola company targeted more than
60% with an objective of equipping their staff with modern tool for productivity and they
attained a 100% actual. This shows that Coca Cola Company identified correct and latest
technical tools of trade which suited their business strategy as far as leaning and growth
perspective is concerned.

In conclusion, the balanced scorecard is a necessary tool for assessing a manufacturing

firm’s performance as it builds necessary focus required for the company to create an
extraordinary performance as it gives a real and competitive view of business
performance and encourages long-term strategies. However, it is also important to note
that the balanced score card system comes with its short comings such as the need to be
updated regularly to make it relevant to the given point of action and it needs a lot of data
resources to measure vast amount of data for key performance indicators.
REFERENCES
Decoene V., & Bruggeman W. (2006). Strategic alignment and middle-level managers'
motivation in a balanced scorecard setting, International Journal of Operations & Production
Management, 26(4), 429-448.

Kaplan, R.S., & Norton, D.P (1996a). The balanced scorecard: Translating strategy into action.
Harvard Business School Press, Boston, MA.

Pakurár, M., Haddad, H., Popp, J., Khan, T., & Oláh, J., (2019). Supply chain integration,
organizational performance and balanced scorecard: An empirical study of the banking sector in
Jordan. Journal of International Studies, 12(2).