Posted: December 2nd, 2013
Growth at Futura Industries
Growth at Futura Industries
It is a performance management tool used in businesses and other industries to communicate strategies align business activities or organizational performance to these strategies and monitor the organization’s performance against the goals of the strategies. It was invented by Drs. David Norton and Robert Kaplan and works as a performance measurement framework. The balanced scorecard entails that an organization should be viewed from four aspects that it suggests. Implementation of this framework is not an easy task but the product is effective (Kaplan, Norton, 2004).
Futura Industries is a company dealing in aluminum design, extruding, fabrication, finishing and machining. Based in Utah, its clientele ranges from markets in electronics to transportation. Futura focused all its internal operations on quality with the belief that its workers are what add to its great value. This factor had contributed to Futura being a notch higher than its competitors are. Futura extensively used this aspect of the balanced scorecard because of the strong belief in its employees.
Susan Johnson Futura’s president focused on this perspective over other balanced scorecard perspectives for various reasons. One of them is that she believed that persons who were respected, trusted and challenged to grow are the foundation for the future. Kaplan and Norton place importance on learning which they say is better than training. Susan Johnson cited the importance of workers in her company and used them as the main resource. Another reason is that this perspective provides building blocks for the success of the remaining three quadrants.
Futura was looking toward the future and therefore needed a plan to help push it to greater heights in terms of efficiency in service provision. Other than following the example of other businesses, which had used the balanced scorecard successfully, Futura decided to tread an entirely different route. This desire to stand out and the full benefits to be reaped out of it also contributed to its use of this quadrant of the balanced scorecard. Susan Johnson’s focus entailed recruitment off good personnel, not just good machines. Astoundingly, they achieved a fifty percent increase in revenue without adding personnel from 1996 to 1999 (Gumbus, 2003).
According to Johnson, the company had all the financial metrics, customer measures and had even earned its ISO accreditation three years prior. With a mission of “Extraordinary Value through Extrusions”, they expected that every individual would contribute to the company and customer’s success
Futura specifically measures safety, employee capabilities in different areas of corporate culture, annual performance, personal development review, customer services, internal operation and financials. Futura uses the balanced scorecard to focus on two key aspects that place them ahead of their competitors in an overcrowded industry. These are the ability to employ and maintain good people and their utmost devotion to their customers.
In terms of annual performance, personal development review and internal operations, they had to develop a strict plan that outlines the scope and nature of work to be done. Being an industry, much of the work being done was routine. Since employees are closest to production and customers at the same time, it was imperative that only creative persons be hired. Another issue that arose was how to retain the employees. This was to be achieved through employee satisfaction done by involving them in decision-making, recognizing their job well done and ensuring they can access information easily. Retaining employees is crucial and effective because it prevents the company from losing part of its intellectual potential.
In order to gauge their satisfaction, Futura carries out annual surveys to find out from its employees how it could become a better employer. This survey also focuses on whether they are content with the kindness benefits they receive from the company. Futura has a follow up form that works on ensuring that action is taken upon the worker’s concerns. Another kind of survey is based on leadership and dwells on a way to enhance managerial leadership and management skills. After this, evaluations are done to cite areas for improvement in line with the employees’ expectations.
I think Futura’s approach is very efficient especially as it helps in gathering of information relevant to its success. The use of surveys helped in acquiring knowledge on consumer satisfaction and about how to improve the workplace and offer better leadership. Employees felt motivated to move up the ladder because of a positive attitude towards the future direction of the company. In addition, this method makes adequate financial logic.
In realizing that employees are the foundation of the company, Futura did everything to ensure that they were appreciated. This led to consumer satisfaction and the success of the other three perspectives, which supplemented the mentioned perspective. The benefits of using this approach were revealed in the way the company spent less of its money recruiting and training new employees. Turnover rates decreased because of motivating the employees and keeping them satisfied.
Yes, I think the measures undertaken by Futura obtain all proportions of the perspective as explained in the background materials from this module as well as previous ones. The dimensions of this perspective involve training of employees and corporate cultural attitudes that are connected to both the individual and the self-improvement of the corporate itself. At Futura, the cultural maturity of employees is based on their capability of adapting to the corporate culture, communication, confidence, teamwork, leadership, responsiveness, productivity and safety among others.
The main areas of focus are on human capital, information capital and organizational capital. The company paid attention to its workforce, a clear indication that they fulfilled the aspect of human capital. The information capital involved gathering, storage and dispelling of information. All this was done by the use of new technology, mainly computers. This aspect was accomplished by Futura through the numerous surveys it used to conduct and manage using computerized information systems.
Organizational capital is mainly about how employees respond to company culture and their alignment to the goals and visions of the company (Niven, 2010). Using the information derived from the surveys it was easy to establish whether the employees were in line with office culture or not. Thus, company managers were able to work on areas they felt needed correction. This implies that the surveys conducted helped to reinforce the organizational capital at Futura. This information could also be used in making plans for the company and help the workers decide on their later employment plans as far as working with Futura industries was concerned.
Therefore, in summation of my conclusion, I think Futura industries managed to utilize all the aspects of the mentioned perspective. It worked to its advantage by helping it to maximize profit.
Assignment 2: SLP
United Airlines, Inc., which operates as united airlines, is a major American airline. Statistics show that it is the largest airline in terms of the number of destinations its planes fly. With over 50000 employees and more than 500 planes, it is a part of the fastest growing airlines in the United States and the world. It has been re-branded several times following a number of mergers with other airlines. In as much as the mergers have contributed to an increase in market share, its public image and market value are still doing poorly.
The airline uses the principle of the business scorecard, which focuses on its employees and the consumers. To enhance its operations, the airline designed three objectives to help it improve its performance. The objectives are to increase its customer base, increase number and quality of services offered and to retain its customers. All these were to assist the airline to achieve its mission, vision and strategy in the competitive market (Hansen, 2009). Its strategy was to increase its market share and to foster a strong financial position in the market.
|Increase customer base||This is to augment its market share. Its performance can be measured by taking statistics of number of passengers in any given period and comparing them with those of previous times and of other airlines.||The move targets all the existing customers who will be retained and acquiring of new ones. The number to be targeted could be set at over 150 million annually.||This objective was to be achieved mainly through ensuring customer satisfaction. For instance, the price of services offered was to be made more affordable, while maintaining their quality.|
|Increase number and quality of services. This would enhance the number of referrals the airline gets from existing customers.||This is to attract more customers and to offer variety to the existing ones. This can be estimated by conducting evaluations and surveys on consumer satisfaction. Also, having statistical measure of the number of new customers acquired after putting implementing the objective.||Targets both new and existing customers. This figure could also be placed at over 150 million customers annually.||Find out the needs of the consumer and seek to correct any flaws. Concentration should not only be placed on the wealthy but also middle income and low end customers.|
|Retaining of customers.||It is measured by doing a statistical count of the number of customers before and after implementation of the strategy.||The target is mainly the existing number of customers.||The actions taken involve activities that ensure customer satisfaction. If the customers are content with the services at the airline, they will not need to seek those services elsewhere.|
Assignment 3: Personal Opinion
The customer perspective forms part of the four quadrants of the balanced scorecard (Sharma 2010).The scorecard is a planning and management tool used to align business activities to the vision and strategies of an organization, improve communication and assess the feat of the firm against these strategies. The importance of this perspective is customer satisfaction. It ensures that customers are content with the services being offered by the organization. This is in order to avoid future decline in an organization’s profits due to defection of customers to other suppliers.
In developing ways to best satisfy customers, an organization should analyze customers according to different factors. Such information should then be stored in a database for easy access. One such factor is consumer-spending habits. This analysis is used to determine a number of things needed by the team in charge of marketing at any organization. One of such things is the type of consumer to whom a communication should be passed.
Customer databases organized into simplistic spending segments are used quite often to determine whom to “hit” with a communication. It is whereby a company compiles data on its consumers that enables them to know how much each of them spends and on what products. This information is helpful when it comes to marketing a product. The company is able to identify its target audience through such valuable information. Therefore, when a new product is launched into the market, a communication is made to those people that buy it most.
This management of the customer base is to ensure retaining of customers through adequate satisfaction of their needs. Having a database with consumer details is widely used today in an effort to build customer loyalty. There are various companies that treat their customers differently based on how much they spend on their products, for instance by offering discounts and additional services. High-end customers are at times invited for excursions while low-end customers who are also considered valuable are offered discounts to motivate them to spend more.
Stakeholders are persons, organizations that have interest in a particular organization. Such parties can therefore affect or be affected by the organization’s actions, policies and objectives. A company can have one or more stakeholders at any give time. Due to this fact, conflicts amongst them may arise because of clashing interests. A simple example is whereby workers in a factory collide with the management of the same company.
In the above case, the management of the factory wants to cut off the size of human capital. This is because they value efficiency through regulation of the workforce. In place of the laid off workers, the factory wants to put in place machines. Alternatively, the workers are used to a personal control over their work and a high degree of autonomy. This case presents a conflicting situation, which requires immediate resolution. The interests of these two stakeholders are in contrast.
As a form of resolution, one party or both have to reach a compromise. Ensuring that stakeholders and their goals are well taken care of is important for the success of any business. This perspective focuses on people as the main resource in an organization. Therefore, at the factory in the case above, the management should give priority to its workers though not at the expense of being at per with technological advancements. This means that instead of laying off some workers from their respective jobs, they should train them to use the machines being introduced.
This would reduce the cost of hiring new workers with specialized training on the use of the machines. It would also motivate the workers and increase their productivity. Putting them first will increase their efficiency, which translates to quality products and consumer satisfaction (Kaplan, Norton, 1996). By so doing, they would have utilized the said perspective effectively.
Don R. Hansen, Maryanne M. Mowen, Liming Guan (2009). Cost Management: Accounting & Control.Oklahoma: Cengage Learning
Gumbus, A. & Johnson, S.D. (2003). The balanced scorecard at Futura Industries. Strategic Finance.
Kaplan, R. S., & Norton, D. P. (2004). Strategy maps: Converting intangible assets into tangible outcomes. Boston: Harvard Business School Press.
Niven, P. R. (2006). Balanced Scorecard Step-By-Step: Maximizing Performance and Maintaining Results. Hoboken, N.J: Wiley.
Smith, R. F. (2007). Business process management and the balanced scorecard: Using processes as strategic drivers. Hoboken, N.J: John Wiley & Sons.
Kaplan, R. S., & Norton, D. P. (2003). The Balanced Scorecard: Translating Strategy into Action. Harvard Business School Press, 126
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