The document discusses the Balanced Scorecard framework. It was introduced in 1992 by Kaplan and Norton as a performance measurement framework that monitors organizational performance toward strategic goals. It helps organizations align activities, identify what should be done and measured, and improve communication of vision and strategy. The Balanced Scorecard framework includes four perspectives: financial, customer, internal business processes, and learning and growth. The document then provides an example of how Philips implemented the Balanced Scorecard framework across its global operations.

1. Presented By :
Sarthak Omer (PGSF1443)
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2.  Introduced in 1992 by Drs. Robert Kaplan (Harvard Business
School) and David Norton as a performance measurement
framework
 The Balanced Scorecard is the most commonly used framework
for ensuring that companies execute their strategies
Where it started……..
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3.  A Balanced Scorecard monitors the performance of
all or part of an organization, towards strategic goals
 It is used in business, industry, government, and
nonprofit organizations worldwide to align business
activities
 It gives a framework and helps planners identify
what should be done and measured
What is Balance Scorecard?
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4.  Increase focus on strategy and results
 Align organization strategy with the work people on
day-to-day basis
 Improve communication of the organization’s Vision
and Strategy
 To provide a more reliable basis for awarding
incentive based pay
Why Implement a Balanced
Scorecard ?
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5.  To give managers a comprehensive view of the
performance of an employee and business
 Employee Satisfaction
 To survive and prosper in today’s world
 It provides feedback to both the internal business
processes and external outcomes in order to
continuously improve strategic performance and results
Why Implement a balanced
Scorecard ?
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6. Four Strategic Perspectives
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7.  Examines company’s implementation and execution
of its strategy
 Three possible stages as described by Kaplan and
Norton
 Rapid Growth
 Sustain
 Harvest
Financial
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8.  Customer Satisfaction
 Retention
 Marketing
 Product/Service in the eyes of the customer
Customer
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9.  Metrics based on this perspective allow the managers to
know how well their business is running
 Innovation - Measures how well the company identifies the
customer’s future needs
 Operations – Measures quality ,costs, technology & plant
infrastructure
Internal Business Process
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10.  Training
 Forward Focused
 Concerned with -Human capital
-Information capital
-Organizational capital
Learning and Growth
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11. Identify workforce requirements
Identify the required work force behaviors
Outline a strategy map
Identify the strategically
required organizational
outcomes
Formulate business strategy
Define business strategy
Outline the company’s value
chain activities
Process
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12. Balanced Score Card
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13.  Philips is world leader in healthcare, lifestyle and lighting
 Philips integrates technologies and design into
people life
 Mission :Improve the quality of people’s lives through
timely introduction of meaningful innovations
Philips
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14.  During the mid-90s, Netherlands based Royal Philips
reported losses
 Due to rapid changes in the external environment and
growing competition of Asian companies like LG and
Samsung
 Led to the Company initiating
 High manufacturing costs
 Initiating job cuts
 Selling unprofitable businesses
Issues
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15.  The initiative to implement the Balanced Scorecard came
from the top management at its HQ in the Netherlands
 Need to shift focus from high-volume business to high-
value business
 They realized they had to make operations
Flexible
Innovative
Why Balance Scorecard ?
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16.  This led the Company to introduce a program called
Business Excellence through Speed and Teamwork (BEST)
in July 1999
 The Balanced Scorecard was one of the tools of the BEST
 There were four perspectives in Philips' Balanced
Scorecard:
Competence
Processes
Customers
Finance
Implementation
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17.  They used Balanced Scorecard strategy across Philips’
divisions with more than 1,20,000 employees spread across
150 countries
 They established the Critical Success Factor’s (CSFs)
 Philips used the traffic light system to measure the level of
achievement of the key indicators:
Green light – Target that had been met
Amber – Performance in line with the target
Red – A problem area
Implementation
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18.  The Balanced Scorecard was used as an instrument to
Evaluate actual performance against targets
Monitor future plans
 It enabled employees understand the existing policies and
plans for the future
 Achieving revenue growth, employee satisfaction, customer
satisfaction were the common indicators in all business
units
Measuring Results
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