Phase 4 Due Today: Original Work, No Plagiarism

Phase 4phase 4 Due Today Original Work No Plagiarized810 Slides

Part 1 Your boss recently attended an accounting seminar at which the balanced scorecard was discussed. He has asked you (or your group) to prepare a presentation for the next manager’s meeting about the balanced scorecard and how EEC might adopt it. In your presentation, you (or your group) should complete the following: Define the elements that might be presented in a balanced scorecard. Explain how the elements will be used. Make a recommendation of whether or not EEC should adopt the balanced scorecard. If adopted, how might it improve the company?

Part 2 The President of EEC realizes that the balanced scorecard translates an organization’s mission and strategy into operational objectives and performance measures. You received an e-mail from him asking you to include information in your PowerPoint presentation about tying compensation to performance measures. Discuss the following in your presentation: Describe unethical behavior that can result if the wrong performance measures are used to tie performance measures to compensation. How can EEC avoid these behaviors? How should EEC tie performance measures to compensation? Who is responsible for establishing the performance measures?

Paper For Above instruction

The Balanced Scorecard (BSC) is a strategic management tool that provides a comprehensive view of an organization’s performance by integrating financial and non-financial measures. Developed by Robert Kaplan and David Norton in the early 1990s, the BSC aims to translate an organization’s vision and strategy into a coherent set of performance metrics across four key perspectives: Financial, Customer, Internal Business Processes, and Learning and Growth (Kaplan & Norton, 1992). Its objective is to improve strategic alignment, enhance communication, and facilitate performance measurement that supports long-term goals.

Elements of the Balanced Scorecard and Their Usage

The financial perspective includes measures such as revenue growth, profitability, and return on investment, which evaluate how well the organization is achieving its financial goals. The customer perspective focuses on customer satisfaction, retention, and market share, reflecting how the organization is perceived externally. Internal business processes measure operational efficiency, quality, and innovation—factors that drive customer satisfaction and financial performance. The learning and growth perspective assesses employee development, knowledge management, and organizational culture, emphasizing continuous improvement and adaptability (Norton & Kaplan, 1996).

Each element serves a strategic purpose: financial measures track profitability; customer metrics gauge market competitiveness; internal process measures identify operational efficiencies; and learning and growth indicators foster innovation and talent development. Collectively, these elements enable organizations like EEC to monitor strategic progress holistically, identify areas for improvement, and align activities with overall strategic objectives (Kaplan & Norton, 1996).

Recommendation for EEC Adoption of the Balanced Scorecard

Adopting the balanced scorecard could significantly benefit EEC by fostering a balanced approach to performance management that aligns operational activities with strategic goals. It encourages a shift from purely financial metrics to a more comprehensive view that incorporates customer satisfaction, internal efficiencies, and employee development. For EEC, this means improved strategic clarity, better decision-making, and enhanced organizational focus on long-term objectives.

Furthermore, the BSC can facilitate communication across departments, promote accountability, and support continuous improvement initiatives. If implemented properly, it could lead to increased operational efficiency, higher customer loyalty, and sustainable growth—advantages essential in a competitive environment (Kaplan & Norton, 2001). Therefore, EEC should consider adopting the balanced scorecard as part of its strategic management framework.

Linking Performance to Compensation and Ethical Considerations

The balanced scorecard’s ability to translate strategy into measurable objectives often leads organizations to tie performance measures to employee compensation. However, this practice can give rise to unethical behavior if inappropriate or narrow measures are used. For example, if sales volume is heavily rewarded, employees may engage in aggressive sales tactics, misrepresent products, or neglect customer service, leading to unethical practices (Baker & Sinkula, 2005).

To avoid such behaviors, EEC must design a balanced set of performance measures that prioritize ethical standards—combining financial, customer, internal, and learning metrics. Measures should be balanced to discourage gaming the system, such as incorporating quality control, customer feedback, and compliance indicators alongside financial targets (Anthony & Govindarajan, 2007).

Regarding linking performance measures to compensation, EEC should adopt a comprehensive and transparent approach, ensuring that metrics align with organization values and promote ethical conduct. Responsibilities for establishing these measures typically fall to senior management and strategic HR professionals who understand operational realities and ethical standards. These measures should be communicated clearly to all employees, with ongoing oversight to prevent manipulation and ensure fairness (Kaplan & Norton, 2001).

Conclusion

The balanced scorecard offers a robust framework for strategic performance management that can benefit EEC by aligning operational actions with strategic objectives across multiple dimensions. When linked appropriately to compensation, it can motivate employees, drive organizational performance, and support ethical conduct. To maximize its benefits, EEC must carefully select balanced, ethically sound performance measures and assign responsibility for their implementation and oversight to leadership, fostering a culture of integrity and continuous improvement.

References

• Anthony, R. N., & Govindarajan, V. (2007). Management Control Systems. McGraw-Hill Education.
• Baker, W. E., & Sinkula, J. M. (2005). Environmental marketing strategy and firm performance: Effects on new product success. Journal of the Academy of Marketing Science, 33(4), 441-451.
• Kaplan, R. S., & Norton, D. P. (1992). The Balanced Scorecard—Measures That Drive Performance. Harvard Business Review, 70(1), 71-79.
• Kaplan, R. S., & Norton, D. P. (1996). Using the Balanced Scorecard as a Strategic Management System. Harvard Business Review, 74(1), 75-85.
• Kaplan, R. S., & Norton, D. P. (2001). The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Harvard Business School Press.
• Norton, D. P., & Kaplan, R. S. (1996). The Balanced Scorecard: Translating Strategy into Action. Harvard Business School Press.
• Simons, R. (1995). Levers of Control: How Managers Use Incentives to Drive Organizational Performance. Harvard Business School Press.
• Eccles, R. G. (1991). The Performance Measurement Manifesto. Harvard Business Review, 69(1), 131-137.
• Ittner, C. D., & Larcker, D. F. (2003). Coming up Short on Nonfinancial Performance Measurement. Harvard Business Review, 81(11), 88-95.
• Marginson, D., & Ogden, S. (2007). Strategic Performance Measurement and Managing Subjectivity and Conflict within the Finance Function. Management Accounting Research, 18(3), 450-470.