3140 Week 4

Balanced scorecard
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Measures financial results and drivers of future financial results

Focus is on output rather than structures, so it allows managerial skills to
come to the fore
Only one page, avoids paralysis by analysis
Helps prevent sub-optimization between function
Customer perspective: how do customers view us? Time, quality,
performance and service, cost
Internal perspective: what must we excel at? Focus on those critical
internal operations that enable the satisfaction of customer needs
Innovation and learning perspective: can we continue to improve? NPD,
training, service delivery improvements
Financial measures: how do shareholders view us? Profitability, growth,
cash flow

Hoshin Kanri
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Japanese strategic planning and implementation process

Developed after WW2 and evolved from the statistical process control work of
W. Edwards Demming
Further adapted and evolved in TQM and its variants
Westernized by companies such as Motorola, HP, GE
It is a 7 step process
Identify the key business issues facing the organization
Establish measurable business objectives that address these issues
Define the overall vision and goals
Develop supporting strategies for pursuing the goals
Determine the tactics and objectives that facilitate each strategy
Implement performance measures for every business process
Measure business fundamentals
The hoshin process employs a standardized set of reports, known as tables, in
the review process. Each table includes:
o A header showing the author and scope of the plan
o The situation, to give meaning to the planned items
o The objective, what is to be achieved
o Milestones that will show when the objective is achieved
o Strategies for how the objectives are achieved
o Measures to check that the strategies are being achieved

Chau and Witcher 2007

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Different methods not necessarily mutually exclusive

Balanced scorecard particularly valuable at a strategic level
Hoshin useful for implementation of higher level strategies
BSC and HK are complementary, sit side-by-side as dual frameworks
BSC is represented as long term strategy, while HK is the management of
longer term strategy as its short term implementation and execution

Bradfield Wright Burt Cairns 2003, scenario planning

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Situational decision making gave rise to two specific needs:

o Need for a methodology to capture the reliable consensus for opinion
of a large and diverse group of experts
o Need to develop simulation models of future environments which
would permit various policy alternatives and their consequences to be
investigated
Trend impact analysis (TIA)
Traditional forecasting methods relied on the extrapolation of historic data
without considering the effects of unprecedented future events
Simple, designed to modify simple extrapolations and in essence, involves 4
steps:
Historical data relating to the issue being examined is collected
An algorithm is used to select specific curve-fitting historical data and
extrapolate this to generate surprise-free future trends
A list of unprecedented future events which could cause deviations from the
extrapolated trend is developed
Expert judgements are then used to identify the probability of occurrence of
these unprecedented events as a function of time and their expected impact,
to produce adjusted extrapolations
Cross impact analysis (CIA)
Attempts to evaluate changes in the probability of occurrence of events
which might cause deviations in the nave extrapolations of historical data
Processes underlying the two methodologies are similar but CIA incorporates
an additional later of complexity
Rather than accepting the priori probabilities attached to future events by
experts, it attempts to determine the conditional or proportional probabilities
of pairs of future events given that various events have or have not occurred,
through cross impact calculations
It is essential to take cognizance of the interdependencies of events in order
to move from a system of unprocessed initial probabilities to a set of
corrected probabilities
Both TIA and CIA generate a range of alternative futures rather than a single
point nave extrapolation of historical data, and when combined with
judgements and narratives about the events in these futures, they constitute
scenarios

Purposeful
scenario
work
Opening up exploration

Closure decisions

Once only
Problem solving
Making sense of
particular puzzling
situations
Developing strategy

Ongoing
Surviving/thriving
Anticipation

Adaptive organisational
learning
- This framework can be categorized along two dimensions
1. The work can either serve specific one-off content needs, or an on-going
general process aimed at longer-term survival capability

2. The work can be undertaken either to open up an organizational mind for

exploration, or to achieve closure on specific decisions and actions
Yang Yeh
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Strategy map: a visual representation of the cause and effect relationships

among the components of an organizations strategy
A logical and comprehensive architecture for specifying the critical elements
and their linkages in an organizations strategy
BSC translates an organizations vision and strategy into a comprehensive set
of performance measures that provides a framework for a strategic
measurement and management system
Formal strategic planning is a process of determining the mission, vision,
major objectives, strategies and policies that govern the acquisition and
allocation of resources to achieve organization objectives
Effective strategic planning links long range strategic goals with both midrange plans and operational plans
The main steps in the strategic management system are:
Develop a mission and vision
Conduct an environmental analysis and SWOT analysis
Identify the organizations objectives
Conceive the strategies to achieve the related objectives
Develop budgets and allocate the resources to the strategies
Deploy the strategies into implementation programs and action plans
Implement the action plans
Review the schedule of the action plans and evaluate the performance of the
objectives
Make corrective adjustments to ineffective programs
Comparison of BSC, strategic management and HK
The common practices in all three systems are the development of vision,
objectives and strategies, and an evaluation of execution performance
Both strategic planning and BSC involve a strategy analysis, and
identification of the linkages between objectives and strategies
To support the execution of strategies and action plans, both strategic
planning and HK management impose action plans and resource allocation
Both BSC and HK emphasize goal setting and the identification of milestones,
and the measurement of progress towards strategic objectives
Strategic planning focuses on a strategic approach to business development,
and the enhancement of competitive advantage; environmental analysis and
SWOT analysis are very important
BSC emphasizes an organizations long term development, and uses a
scorecard of the KPIs developed from the four perspectives of the BSC
HK involves a companys entire workforce. Senior management leads the way
in stimulating energy and enthusiasm among all employees. The practice of
catch ball deployment distributes the policies and objectives from senior
management to other members of the organization. The org then pays
significant attention to daily execution and performance management