We will start with the fundamental ideas of corporate vision and mission that underlie all effective business strategy. Here is a good brief introduction to this topic:
Robin, D. (ND) Vision, Mission and Values: Management Tools for Building a Better Workplace. Daniel Robin & Associates. Retrieved July 20, 2010, from http://www.abetterworkplace.com/027.html
As we noted, the financial perspective of the balanced scorecard defines the "bottom line" of the system. So here is a useful brief summary of the approach:
Niven, P. (N.D.) Financial perspective. EPM Review. Retrieved July 20, 2010, from http://www.epmreview.com/Resources/Articles/Delivering-shareholder-value-growing-revenue-and-enhancing-productivity.html
There are any number of possible cases where we could begin. But let's start in this case with an assessment of the use of the balanced scorecard in Saatchi & Saatchi, one of the premier advertising and "creative service" organizations (although they have certainly had their ups and downs over the last ten years or so. Here's how this process has been described:
"Faced with a set of brutally tough choices in the Nineties, Saatchi & Saatchi's leadership team defined a new vision and global strategy and set stretching three-year financial goals. In this case study, Paul Melter, Worldwide Director, CompaSS, explains how the balanced scorecard was used to turn ambitious strategic aspirations into operational reality."
The article from which this summary is taken can be found here:
Greenhalgh, C. (2004) Building a Strategic Balanced Scorecard: Saatchi & Saatchi Complementary Case Study. Business Intelligence Company. Retrieved July 20, 2010, from http://www.business-intelligence.co.uk/PDFdownloads/strat_bsc/Saatchisr.pdf
You are to carefully review this article, and then prepare your analysis of how Saatchi & Saatchi implemented the balanced scorecard and its apparent effects.
Your analysis should be structured in terms of the following four issues (you will be using essentially this same comparative evaluation framework for the first four modules of this course):
- Introduction: What was the situation for Saatchi & Saatchi in the mid 1990s? The management team adopted an approach that was primarily two-pronged: the financial perspective and the customer perspective. In terms of the financial perspective, what goals did the new leadership set for the company?
- Analysis: How did the company categorize its different business units (agencies)? What strategies were chosen for each unit? Saatch & Saatchi also adopted several strategies that related best to a customer perspective. What were they?
- Conclusion: Did the financial strategies make sense for each given unit? Why or why not? Did the acquisition by Publicis Groupe SA change the results of the BSC? Now that you have analyzed both "prongs", did the two approaches worked in synthesis or in conflict?
- Evaluation: Assuming that it would be best if the customer perspective strategies meshed with the financial strategies, do you think the customer perspective reinforces or conflicts with their financial strategies? In your opinion (supported, of course, by your readings), was the implementation done well or poorly?© BrainMass Inc. brainmass.com June 23, 2018, 2:03 pm ad1c9bdddf
Through the 70's and 80's, Saatchi & Saatchi had been accustomed to seeing phenomenal growth rates year over year. This all changed during the economic and financial crisis that was spurred by the struggles in the Asian markets coming into the 90's. Saatchi and Saatchi's growth was suddenly stopped. Realizing that their golden era was at an end, Saatchi had to reevaluate its current structure and recommit to a new strategy and vision to try and overcome the challenges it was facing.
The first of the major changes was a restructuring of the top leadership of the company. As a result of new leadership, their vision was to implement radical strategic maneuvers which were centered on establishing new financial goals that were better aligned with the company's new vision and operational strategies (Rothenberg, Randall, 1995).
The following goals were what the leadership of Saatchi & Saatchi established in relationship to the financial perspective in order to better combat the negative effects of the economic recession in the 1990s. First, the team determined that in order to have success, its primary goal should be to have revenues in which the growth rate was higher than that of the markets. In addition, Saatchi proposed a 30% operating profit on the additional revenues, not an easy standard to meet. Finally, the team proposed that earnings per share would be doubled to the shareholder, a bold statement of faith in their strategic plan ...
The solution provides a short essay on the financial prospects of a given company, with a bit of background, a financial analysis and then a conclusion and evaluation with a personal opinion to end. 910 words with 3 references.