BSC Implementation and the Internal Business Process Perspective (Essay Sample)

BSC Implementation and the Internal Business Process Perspective
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BSC Implementation and the Internal Business Process Perspective
The balanced scorecard (BSC) management framework has the potential of contributing to the success of an organization if it is well understood and properly implemented (Armitage & Scholey, 2006). The BSC translates an organization’s strategy and vision into 4 notional quadrants: internal business process, customer, organizational learning and growth, and financial (MacKay, 2004; Niven, n.d). This essay provides a description of the efforts put forth by British Aerospace (BAE) System in implementing the BSC approach in its organization from an implementation perspective. The efforts made by BAE’s management to assure employees would be receptive to the BSC initiative and accept it are described, along with the extent to which their efforts paid off.
BAE Systems implemented the BSC approach in part because of an existing culture change programme, and it supported the cultural change project by emphasizing its 5 basic values and encouraging behavior which was in harmony with the values and goals of the company. British Aerospace acquired Marconi Electronic Systems in the year 1979 thereby forming the BAE Systems conglomerate (Murby & Gould, 2005). The company was faced with increased competition as well as changing markets which made it struggle to reestablish its domination in the marketplace and recoup its market share. The company’s top management implemented a change programme and BAE’s balanced scorecard was at the core of this culture change programme (Murby & Gould, 2005). It is worth mentioning that the information on which successful operation of the BSC relied upon was extractable from the existing SAP R/3 ERP system of BAE, and this actually helped the change process. As such, the BSC was at the core of the BAE’s control system. This firm utilized traffic light reporting to underscore divergences from anticipated performance.
In order to attain the required change, BAE followed 7 steps: first step: reviewing the competitive position – BAE’s chief executive reviewed the company’s competitive position regarding market position, fiscal performance, and technological trends (Murby & Gould, 2005). Second step: involving senior staffs – BAE’s 5 directors acknowledged the importance of wide staff participation in driving the change programme. They therefore joined the company’s chief executive to carry out an all-inclusive SWOT analysis of the firm. The chief executive of BAE essentially initiated an extensive review of BAE’s performance and operations, and then brought together a wider grouping of staffs that comprised 130 employees who were greatly involved in taking the project forward. The Group was led by an influential line manager who had adequate power to lead the change effort (Murby & Gould, 2005).
Third step: creating a common vision – the Group which comprised 130 staffs created a common vision to elucidate how the change effort would be organized and the direction that the firm really had to move toward. Fourth step: communicating the vision – to form an agreement around the shared vision, the Group outlined a values statement which comprised 5 basic areas. (i) Performance – the key to winning; (ii) customer – the highest priority; (iii) people – the greatest strength; (iv) technology and innovation – the competitive edge; (v) partnerships – the Group’s future (Murby & Gould, 2005). These 5 fundamental areas became the perspectives for BAE’s balanced scorecard. BAE’s chief executive was important in inspiring members of the Group in searching for and creating opportunities to attain BAE’s overall vision. By creating the 5 essential values, the essential balance between the following dynamics was accomplished: human behavior; strategy making; and value creation (Murby & Gould, 2005).
Step 5: planning for and creating short-term goals – BAE changed long-term targets into a sequence of short-term performance goals in order to avert loss of momentum. Operations at this firm were focused on forty or fifty projects and each of them was connected to a strategic objective. As such, the main driver that facilitated long-term business growth was the project reports and accounts (Murby & Gould, 2005). Sixth step: entrench cultural change – value teams were created and every participant in the Group actually had a role in the value teams. Seventh step: articulating the links between the organizational competitive success and cultural change project. For BAE Systems to sustain commitment to its change programme, it utilized the objective measures developed from the values scorecard and connected each to its impact on fiscal performance, and to the increase in company stock price (Murby & Gould, 2005). In essence, the creation of the 130 Group and its role in crafting and elucidating the proposed value statements helped to overcome resistance to change.
The BSC had a significant impact on management control at BAE Systems. The company utilized SAP to help in reporting monthly results of the BSC online in a manner that was visually appealing. The information was therefore shared with every company staff and this was considered as important to management control (Murby & Gould, 2005). Moreover, the reports had levels of data that were linked hierarchically that allowed staffs to view data from bottom-up or top-down perspective. When the BSC was first implemented in the year 1997, it only had 8 performance measures and currently includes over 70 measures organized into 5 values to enable goal setting throughout various company levels and departments (Murby & Gould, 2005).
Value scorecard of BAE (Murby & Gould, 2005)



Conclusion
In summary, BAE has put forth a lot of effort in implementing the BSC approach in its organization from an implementation perspective. To ensure that the staffs were receptive to and accepted the change, a group that consisted of 130 personnel was formed and these employees were greatly involved in taking the project forward. This helped to overcome resistance to the change. BAE’s top management implemented a change programme and its balanced scorecard was at the core of the culture change programme. To establish an agreement around the shared vision, BAE developed a values statement that consisted of 5 essential areas. (i) Performance – the key to winning; (ii) customer – the highest priority; (iii) people – the greatest strength; (iv) technology and innovation – the competitive edge; (v) partnerships – BAE’s future. These 5 fundamental areas became the perspectives for BAE’s balanced scorecard.