Introduction
Balanced scorecards are tactic performance management tools that help administrators track how employees execute their duties and monitor the consequences of the workers’ activities. According to Giau (2018), administrators use balanced scorecards to supervise how firms implement both strategies and operational activities. Sometimes, people use balanced scorecards in tracking their performances by adapting corporate elements in informing them how to set objectives and calculate incentives. A typical balanced scorecard contains monetary and non-financial data items, which experts divide into financial, innovation and learning, internal process, and customer perspectives (Giau, 2018). In short, balanced scorecards are sets of measurements, which focus on institutions’ tactical plans and help in monitoring performance against goals.
Different Types of Balanced Scorecards
Since managers utilize balanced scorecards in supervising the implementation of both strategies and operational activities, experts divide them into two types depending on their use. Strategic balanced scorecards focus firms on their tactics and measure how the approaches develop (Giau, 2018). These balanced scorecards emphasize highly selective procedures, ignore details, and may ask a question such as, “what do we focus our attention on?” Another question might be, “What are some of the things, which make the biggest difference?” The process aims at making sure that entities agree on their strategies and articulate them. Operational balanced scorecards help executives to understand what goes on in their institutions. The superintendents use these tools in managing performance and giving detailed information without much discrimination. Moreover, operational-balanced scorecards assist superintendents in looking at procedures and identifying every attribute of those processes. Generally speaking, due to its in-depth provision of information, an organization ends up increasing its measures.
How a Balanced Scorecard Works
A balanced scorecard helps executives track institutions’ efficiency by implementing their strategic visions. The superintendents translate them into the financial, customer, internal process, and innovation performance measures. According to Giau (2018), the tool compares both biased and neutral metrics, internal and outside initiatives, and performance outcomes and their contributors. In the long run, balanced scorecards assist managers in figuring out how their businesses carry out their strategies in all these areas.
What a Balanced Scorecard Shows
Balanced scorecards show how institutions meet their goals that are related to various stakeholders depending on their wants. For instance, workers rely on firms to be employed while stockholders maintain their investments. Therefore, establishments ought to balance all these needs as they compete against one another. The balanced scorecard idea helps managers review how well corporations are doing in terms of their competing stakeholders’ requirements. These stakeholders enable organizations to categorize the wants into the financial, customer, internal process, and innovation performance measures indicating businesses’ abilities to add values to shareholders and clients and their strengths for long-term development.
How Often Should Organizations Update a Balanced Scorecard
Businesses should update their balanced scorecards whenever the need arises, depending on how their tactics, goals, and measures change. Therefore, firms might not have a specific time for a change, although they should frequently review whether their balanced scorecards require adjusting. This assessment’s regularity relies on how dynamic the business context is (Giau, 2018). In essence, when a company’s circumstances continuously change, managers may need to evaluate the tools monthly or quarterly. On the other hand, if the business context is reasonably stable, administrators might review the scorecards yearly or after several years.
How I Use a Balanced Scorecard at Coca-Cola Company
Brief Description of the Coca-Cola Company
Coca-Cola is a US multinational firm whose headquarter is in Atlanta, Georgia. Singaram et al. (2019) assert that the business started operating in 1886 and has interests in production, retailing, and promoting non-alcoholic drinks. The corporation mainly manufactures syrup concentrate that it sells to different bottling companies with exclusive territories in the globe. The North American Coca-Cola Refreshments is listed on the New York Stock Exchange and is the firm’s biggest bottler. This company leads in plastic waste manufacturing in the world. Coca-Cola provides its products in more than 150 nations worldwide, and the commodities are highly beneficial to clients because they quench their basic thirst (Singaram et al., 2019). Therefore, other businesses in the industry must work harder than Coca-Cola for effective competition and continuous operations in the soft drinks market.
The Use of a Balanced Scorecard at the Coca-Cola Company
I use the balanced scorecard at Coca-Cola to understand how it performs and whether it attains the goals that it sets. The measures that I utilize in comprehending comprise internal business process, customer value, learning and growth, and financial performances. Giau (2018) posits that the balanced scorecard assists businesses in articulating their strategies and vision, closing adverse gaps, and ensuring that the companies widely accept the measures, which support their tactics. At Coca-Cola, I use the balanced scorecard in the divisions, which require some adjustments for the corporation to succeed.
I use the financial measures through the accounting records in assessing Coca-Cola’s revenue and growth in profitability. The firm’s financial statements help me compare the company’s transactions and improve the information transparency that junior accountants report. I apply internal measures in evaluating the effectiveness of the existing business processes. Usually, I introduce various technologies into the business to assist in improving the corporation’s performance. Furthermore, I encourage leadership philosophies, which help develop innovative administrators who can guide the firm in achieving its objectives. I also provide more money for research and development to make sure that Coca-Cola manufactures tasty and healthy beverages.
In the learning and growth measures, I review the efficiency of workers’ training to ensure that the company continues attracting and retaining outstanding staff members to help in improving its performance. Therefore, I encourage progressive employees’ teaching on how to handle clients and have more sales. On the customer value, I ensure that employees accomplish Coca-Cola’s mission by treating its clients well. Finally, I encourage the manufacturing of high-quality items to help in satisfying consumers and reducing health problems.
Contents of a Balanced Scorecard (BS) at the Coca-Cola Company
The Coca-Cola Company has organized its balanced scorecard according to the area of objectives and what measures them. Furthermore, the firm approximates the time to attain the goals and the officer responsible for making them happen. The corporation expects managers to produce all the targets’ reports every year. According to Terziev and Georgiev (2017), “the Coca-Cola Corporation has its unique practice of implementing BSs when opening new branches in every new location” (p. 604). The firm’s balanced scorecard contents include customers, employees, operations, financial, and business ethics. Under the clients, the institution divides objectives into brand identity and satisfaction. The former is measured using industry reports, and the latter through customer surveys as the marketing officer ensures that the establishment achieves the two.
For the workers, targets are employee morals and service training. People officer and administrative executive are the ones who measure these goals using survey and number of seminars respectively. On operations, Coca-Cola aims at diversifying its product line by acquiring Kelloggs Company through the administrative officer. Under business ethics, the people manager is the one who is responsible. One of the goals is recycling with a target of reusing 50 percent of total wastes. The other objective is ethics training measured through the number of instruction sessions. On the financial measure, the finance officer is answerable with aims being to increase revenues by 50 percent yearly and analyze ratios that ought to be better than rivals and industry average.
The Use of a Balanced Scorecard at Apple Inc.
Apple Inc. uses the balanced scorecard in adjusting its long-term performance. According to Giau (2018), the firm’s indicators are customer satisfaction, core competencies, employee commitment and alignment, market share, and shareholder value. The company fulfills its clients’ wishes through customer surveys and equips workers with innovative solutions such as efficient supply systems and user-friendly interfaces to develop their competencies. To commit and align the staff members, the corporation conducts thorough random workers’ surveys after every two years to determine their understanding of the strategies and success of the business (Giau, 2018). Apple Inc. gathers several market shares to improve its earnings and persuade the software developers who are its collaborators. The firm puts shareholder value into its sales vision, worldwide production and operations, and product design. Therefore, it only calculates this benefit at a centralized level and uses the correlation in assessing every department’s activities and evaluating new business deals. These actions help Apple Inc. in creating investments that might assist it highly grow in the future.
Conclusion
Balanced scorecards help executives focus on their institutions’ strategic plans and monitor their performance against objectives. Although these tools assist in implementing institutions’ visions by translating them into financial, customer, internal process, and innovation performance measures, administrators divide them into Strategic and operational balanced scorecards. The tools show how institutions meet their goals that are related to various stakeholders depending on their wants. I use the balanced scorecard at Coca-Cola to understand the firm performs and whether it attains its goals.
References
Giau, M. (2018). The use of the balanced scorecard as a strategic management accounting tool [Unpublished bachelor’s thesis]. Ca’ Foscari University of Venice.
Singaram, R., Ramasubramani, A., Mehta, A., & Arora, P. (2019). Coca-Cola: A study on the marketing strategies for millenniums focusing on India. International Journal of Advanced Research and Development, 4(1), 62-68.
Terziev, V., & Georgiev, M. (2017). Highlights on the evolution of the balanced scorecard as a model for managing strategy development and control. International E-Journal of Advances in Social Sciences, 3(8), 602-606.