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Introduction
Futura industries, whose president is Susan Johnson, was able to build success in the firm by the use of a balanced scorecard foundation level that involves learning, innovation, and growth dimensions. Unlike other industries that focus only on the financial and operational matrix, Futura industries focus on learning and innovation to improve its employee-customer relationship. The employees of the company learn from the culture established by the management of the firm.
This dimension is vital for the organization since it has been hailed as a success factor for the overall performance of the firm. The strategy has resulted to 50% increase in the revenue. Employees of organizations are encouraged to increase their skills and knowledge through advanced learning and training.
These can be obtained by an organization using the learning and growth perspectives that help in the development of the culture of a company. Futura industries learnt to put people first thought implementation of these basic dimensions of a balanced scorecard. According to Norton and Kaplan (1992), learning includes people who are mentors and role models within the organization.
Learning is also influenced by high performance and effective communication systems. Success in the first quadrant of the score will have a domino effect to the other three quadrants since it will act as the key success factor that propelled Futura industries (Kaplan, 1992).
Analysis
Futura Company would like to measure the intangible contribution of human capital that is otherwise not measurable in a traditional way. Futura Company wishes to achieve the following aspects by use of leaning and growth perspective.
The information availability for strategic decision-making is vital for the success of the firm. The company uses this dimension to measure the quality of its workforce. For instance, Futura Corporation has utilized it to establish the ability of its employees to meet set standards. The balanced scorecard is also used to measure employee job satisfaction, professional values, and culture.
Learning and growth perspective feature of the scorecard focuses on human capital. This measures the level at which the human resource of an organization is armed with the right skills and knowledge to handle their duties at their various job areas.
Information capital is a component of learning and growth dimension and measures the levels at which employees have the right technology to better perform their jobs. The last measure is organizational capital; which involves the growth of employee in terms of management capacity in an organization.
Conclusion
The measure explained in the text does not capture full dimension of the learning and growth perspective. The learning and growth dimension should capture three aspects, which are: human capital and organizational capital. The text captures only one aspect, which is the human capital. The text states, ‘‘the balanced scorecard has addressed the issue of how to measure the contribution of such intangible asset as human capital.” From this statement, it is clear that the text has dwelt much on the human capital and not other aspects of the dimension (Stewart, 1999).
Evaluation
Performance measurements vary from organization to organization. Different approaches are used in evaluating performance of a firm. The effectiveness of a model will be determined based on the model enabling the achievement of company goals and objectives. A Balanced scorecard identifies four main perspective or dimension in its assessment that include: customer perspective, learning, and growth perspectives. Others are the financial perspective and internal business process dimension. All these aspects have to be examined when applying the scorecard model (Kaplan & Norton, 1996).
Futura company approach to the use of the balanced scorecard is a good move although the organization did not make full use of the measure provided by growth and learning perspective. The measures enable one to do a firm self-evaluation of the success factors of the organization.
A Balanced scorecard is an important tool if its entire dimensions are used to measure the business performance. However, a balanced scorecard may face opposition from employees who may see it as a system imposed on them to track their moves hence reducing their performance.
The tool may not be effective in measuring performance because it assumes other economic factors such as recession that may affect its suitability. A balanced scorecard only indicates when things have gone wrong in the company but does not preempt and correct before a business event goes wrong.
When applied to an organization, a balance scorecard has more advantages than disadvantages as a tool for company evaluation. Many organizations are now applying the scorecard evaluating techniques for performance appraisal (Kaplan & Norton, 1996).
The key indicators are used to determine efficiency in the organization. The card helps in aligning key performance measures with the organizational strategies and provides management with the bigger picture of the business operations. It is also an important tool of communicating business goals and objectives to both operational and management of the organization including subordinate employees. A balanced scorecard also brings about unique competitive advantage to the organization through improved decision-making, better planning, and maximum use of the financial period (Stewart, 1999).
References
Kaplan, R. & Norton, D. (1992). Balanced Scorecard: Measures that drive Performance. Harvard business review, No. 92015, pp. 73-79
Kaplan, S.R. & Norton, D. (1996). Balance Scorecard- Translating Strategy into action. Boston: Harvard business school.
Stewart, T. (1999). Intellectual Capital. New York, NY: Currency double day.
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