The Balanced Scorecard and the Financial Perspective - Essay Example

? The Balanced Scorecard & the Financial Perspective Introduction The Cattaraugus County Rehabilitation Center is a non-profit organization. It was formed almost five decades ago by a group of parents having children with disabilities. Later they began with providing counseling and other services to children and people with such disabilities. In the very the next year County Rehabilitation center got incorporated and started providing various services and today it is a multi faceted organization, serving hundreds of disabled people at more than 35 sites throughout Cattaraugus and surrounding county in New York States. In today’s time whether it be a for-profit-organization or a not-for-profit organization, has to develop various strategic business models in order to manage and sustain their organization. Similarly, the rehabilitation centre got into strategic planning long ago. There had been various consultants who provided counseling to the centre on implementation of proper strategic business models for the smooth functioning of the organization. The centre tried to adapt these strategic business model based on the inputs provided by various consultants but the implementation of such models were very difficult for the centre since they were into rendering different types of services and these services were done not for profit. The management was unable to push down the strategic plan to the lower levels, from where it has to be started, hence the centre couldn’t never avail the desired outcomes. After years of pushing and pulling into the implementation of strategic business models, the management finally appointed a Director of strategic planning, who in turn after thorough scanning and exploration of various levels of strategic planning process decided to utilize the concept of Balanced Scorecard. The main objective of implementation was to align each area within the center itself with the overall strategic plan. This concept was similar to breaking down of big activities into smaller parts so that even difficult task can be completed in time (Kazmi, 2002). The mission and vision statement of the organization was to become “a leader in providing and assessing desired services to people with disabilities”. The implementation of Balance scorecard was difficult at initial stages but as the top level management understood the importance and effectiveness of Balance scorecard, implementation became bit easier at later stages though the outcome measurement for many areas remained a difficult task as the customers at the center are people with developmental disabilities. Analysis The main purpose of a balance scorecard is that it helps an organization to adhere to it mission and vision statement while aligning all its activities to one direction. A Balance Scorecard has four perspectives namely the learning and growth perspective, internal business process perspective, customer perspective and the financial perspective. Based on these four perspectives it can be viewed the organization from these four broad perspectives. The four perspective of the Cattaraugus County rehabilitation Centre has been discussed below: Customer Perspective: In the customer perspective the main goal is to amend the quality of services provided to the customer by the center. It has again two aspects to it, first, by providing better services through narrowing down the gap of unfulfilled services like allowing various supports to families of the individuals with disabilities, by improving the access facilities to customer for the services etc. Secondly, by giving the families and individual maximum independence and recognition for e.g. by providing various opportunities to the individuals in their community, helping them to develop various skill like sustaining relationships, developing various skills in them, providing them with opportunities to work , by working on plans based on the feedback provided by the customers etc. Financial perspective: The main objective of any organization is maximize profit through increased sales or increased productivity. But the case is not same for non-profit organizations. Non- profit organizations do not have any income source through sale or any such activity. These non- profit organizations largely depend on funding by some external sources. But in case of County rehabilitation center its decision to improve its financial stability through increased revenues as well as improve productivity could be a fruit full one. But the centre can only meet the above stated financial goals if it adheres to its strategies for having financial plans some of them are looking out for other potential funding sources, making a proper utilization of its available resources, maximize prior funding by improved services and goodwill (Mackay, 2008). Internal Business Process Perspective: The internal business process refers to the day to day business process of any organization. Information based on this perspectives gives the management to access how well the business is running and to know whether or not the services provided by them are catering to need of their customers, which we can consider as an important factor especially in an not for profit organizations. All the strategies in this level has to designed by someone who is very close to operations and the environment because organizations cannot rely on strategies made by outside consultants since they are not intimate with the inside operations. The county rehabilitation has designed the process in accordance with the requirement. It has focused on those operational goals which will support its customer and financial objectives. The centre has set up strategies to indentify and capture new service opportunities, achieve operational excellence by creating a safe and secure environment for consumers, employees and visitors. It has developed system to effectively and efficiently deliver services in natural environment. The center has even developed comprehensive system and by effectively working on the feedback and grievances of the customers. Learning & Growth Perspective: This perspective emphasizes on building a conducive environment for learning and growth. The center has put in place good motivational tool in order to motivate its employees by developing sound recruitment policy, providing personal growth opportunities within the center, proper training and development programs for its employees. It has further developed plans and programs to recognize the efforts of the employees. The center has also recognized that in order to achieve its goals it has to improve the use of the technologies by providing technological assistance to its employees (Hoffmann, 2006). Conclusion It can be seen how center can achieve numerous benefit by the implementation of Balanced Scorecard in its management. The major benefit to the center is the realization of strategic planning by the employee and other personnel with the center. With the help of the Balanced scorecard the centre has been able align its various activities with the overall strategic objectives. The construction of metrics in an not for profit organization is an extremely difficult task but with the efforts put in, the center has initiated to develop metrics with will provide linkages to the overall strategic plan The balanced scorecard model has enabled the individual in the center to focus on the significance of the relationship that exists between the four perspective and it has also enabled them to understand that how this interrelation can be channelized to attain the organizations strategic goal (Martello, Watson and Fischer, 2008). References Martello, M., Watson, J., Fischer, M. (2008). Implementing a balanced scorecard in a not-for-profit organization. Journal of Business & Economics Research. Retrieved From: http://journals.cluteonline.com/index.php/JBER/article/view/2471/2517. Mackay, A. (2008). Shareholder and stakeholder Approaches to strategic performance measurement using the balanced scorecard. A Research Report. Retrieved From: http://www.cimaglobal.com/Documents/Thought_leadership_docs/tech_resrep_a_practitioners_guide_to_the_balanced_scorecard_2005.pdf. Kazmi, A. (2002). Business Policy and Strategic Management. Retrieved From: http://books.google.co.in/books?id=7bbTVYIXstMC&pg=PA155&dq=balanced+scorecard+analysis&hl=en&sa=X&ei=OAtxUZqOJcm3rgezqYD4Cg&ved=0CFIQ6AEwBg#v=onepage&q=balanced%20scorecard%20analysis&f=false. Hoffmann, M. (2006). A critical analysis of the Balanced Scorecard- with special consideration to its implications for HRM and HR-policy. A Master Thesis. Retrieved From: http://books.google.co.in/books?id=3yYasfJoBLwC&printsec=frontcover#v=onepage&q&f=false. Read More