Boston Lyric Opera Case for Management Control
GRADUATION: 2011
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CONTENTS
3LITTERATURE REVIEW
Introduction 3
The Cause and Effect Relationship 3
LITTERATURE REVIEW 4
Criticism 4
Modified Balanced Scorecards 4
BOSTON LYRIC OPERA CASE STUDY 5
Limitations (first draft, only bullet points for the moment) 5
CRITICISM OF THE BALANCE SCORECARD 6
_Top-down implementation 6_
_Managers responsibility in the implementation 6_
_The BSC fails to capture complexity 6_
_Adaptability 7_
_Time factor 7_
_Cost and efficiency 7_
_Conclusion 7_
RECOMMENDATIONS 8
Extra Perspectives 8
Cause-and-Effect Relationship 8
Activity Based Costing, ABC-BSC 8
BIBLIOGRAPHY 9
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LITTERATURE REVIEW
INTRODUCTION
The Balanced Scorecard is a strategic management tool that combines four performance perspectives, acquiring a broad based picture of performance (Kaplan/Norton, 1992).
traditional financial metrics (return on investment)
customer-based metrics
internal-operations metrics
growth and learning metrics
The concept of Strategy Maps emerged to supplement the BSC (Kaplan/Norton, 2004), establishing strategies that are translated into quantifiable metrics in the BSC.
THE CAUSE AND EFFECT RELATIONSHIP
The BSC represents the 'cause-and-effect' relationship between an organisations long term strategic objectives and quantifiable KPI's (Key Performance Indicators) (Kaplan/Norton, 2006). It is often difficult to focus on many different measures, taken separately. Metrics drawn from a cohesive strategy however work in tandem. Companies should concentrate on the internal and learning & growth perspectives, these actions will translate into enhanced performance in customer and financial outcome measures due to the "cause-and-effect relationship" (Kaplan/Norton, 2004).
_FIGURE 1 (KAPLAN & NORTON, 2006)_
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LITTERATURE REVIEW
CRITICISM
The BSC is one of the most successful performance control mechanisms, in 1998 it was used by approximately 600 of the Fortune 1000 companies in the US and Europe (Linna/Seal, 2009).
�
CONTENTS
3LITTERATURE REVIEW
Introduction 3
The Cause and Effect Relationship 3
LITTERATURE REVIEW 4
Criticism 4
Modified Balanced Scorecards 4
BOSTON LYRIC OPERA CASE STUDY 5
Limitations (first draft, only bullet points for the moment) 5
CRITICISM OF THE BALANCE SCORECARD 6
_Top-down implementation 6_
_Managers responsibility in the implementation 6_
_The BSC fails to capture complexity 6_
_Adaptability 7_
_Time factor 7_
_Cost and efficiency 7_
_Conclusion 7_
RECOMMENDATIONS 8
Extra Perspectives 8
Cause-and-Effect Relationship 8
Activity Based Costing, ABC-BSC 8
BIBLIOGRAPHY 9
�
�
LITTERATURE REVIEW
INTRODUCTION
The Balanced Scorecard is a strategic management tool that combines four performance perspectives, acquiring a broad based picture of performance (Kaplan/Norton, 1992).
traditional financial metrics (return on investment)
customer-based metrics
internal-operations metrics
growth and learning metrics
The concept of Strategy Maps emerged to supplement the BSC (Kaplan/Norton, 2004), establishing strategies that are translated into quantifiable metrics in the BSC.
THE CAUSE AND EFFECT RELATIONSHIP
The BSC represents the 'cause-and-effect' relationship between an organisations long term strategic objectives and quantifiable KPI's (Key Performance Indicators) (Kaplan/Norton, 2006). It is often difficult to focus on many different measures, taken separately. Metrics drawn from a cohesive strategy however work in tandem. Companies should concentrate on the internal and learning & growth perspectives, these actions will translate into enhanced performance in customer and financial outcome measures due to the "cause-and-effect relationship" (Kaplan/Norton, 2004).
_FIGURE 1 (KAPLAN & NORTON, 2006)_
�
LITTERATURE REVIEW
CRITICISM
The BSC is one of the most successful performance control mechanisms, in 1998 it was used by approximately 600 of the Fortune 1000 companies in the US and Europe (Linna/Seal, 2009).
Bibliography: Johanson, U. 2006, "Balancing dilemmas of the balanced scorecard", _Accounting, Auditing & Accountability Journal_, Vol.19 No. 6, pp. 842-857. Kaplan & Norton, 1996a, "The Balanced Scorecard", Boston MA; _Harvard Business School Press._ Kaplan and Norton, 2006, How to Implement new strategy without disrupting your organization, Harvard Business Review, Vol 84 Issue 3 Kaplan, R and Norton D, 1992, The Balanced Scorecard- Measures that drive performance. Harvard Business Review 70 Kaplan, R and Norton, D, 2004, Strategy Maps, Strategic Finance, Vol 85 Issue 9 Linna Y and Seal W, 2009, The Balanced Scorecard, Financial Management, p27-28 Maltz, A C, Shenhar, A J and Reilly, R 2003, "Beyond the Balanced Scorecard: Refining the search for organizational success measures", Long Range Planning 36: 187-204. Silk, S., 1998, Automating the Balanced Scorecard, Management Accounting, Vol 11, No 17 Slovic, P and Mac Phillamy, D 1974, "Dimensional commensurability and cue utilization in comparative judgment", _Organizational Behaviour and Human Performance 11_, pp