Ericsson, operating in four major segments, providing communication networks, services, multimedia solutions and mobile phones, has become a multinational cooperation. Despite its traditional roots, emphasize lays on quality, innovation and sustainability. Due to its large size it has become vital to find a management system everyone is able to participate in on the one hand and which properly and timely monitors success and failure on the other hand.
This Case explains the Balanced Scorecard, a performance measurement system, which includes four different perspectives, the Financial Perspective, the Customer Perspective, the Internal Perspective and the Innovation and Human Perspective. These perspectives are implemented into the strategy of a company.
Table of Contents
1. Introduction
1.1. The Balanced Scorecard
1.1.1. The Financial Perspective
1.1.2. The Customer Perspective
1.1.3. The Internal Perspective
1.1.4. The Innovation and Human Perspective
1.2. Background Ericsson
2. Application of the Balanced Scorecard
2.1. Ericsson and the implementation of a scorecard
2.2. Financial Perspective at Ericsson
2.2.1. Strategic themes for the Financial Perspective at Ericsson
2.3. Customer Perspective at Ericsson
2.3.1. Strategic themes for the Customer Perspective
2.4. Internal Perspective at Ericsson
2.4.1. Strategic themes for the in Internal Perspective
2.5. Innovation and Human Perspective at Ericsson
2.5.1. Strategic themes for the Innovation and Human Perspective at Ericsson
3. Conclusion
Objectives and Topics
This case study aims to explain the Balanced Scorecard as a performance measurement system and derive a specific application for Ericsson based on the company's 2009 Annual Report and operating techniques. The research focuses on integrating financial and non-financial measures into a strategic management framework to monitor organizational success in a complex, global environment.
- The theoretical foundations and four perspectives of the Balanced Scorecard (financial, customer, internal, innovation and human).
- Strategic analysis of Ericsson's business segments and market position.
- Application of the Balanced Scorecard framework to Ericsson's specific business challenges and goals.
- Evaluation of performance drivers, including cost reduction, asset utilization, and employee development.
Excerpt from the Book
1.1. The Balanced Scorecard
The aim of the Balance Scorecard is to turn an organization’s vision and strategy into a measurable set of scale. This is the outline for a successful management system (Kaplan, Norton, 1996). The Balanced Scorecard considers four different aspects: financial-, customer-, innovation- and internal perspective. In the early nineties the Balanced Scorecard was developed to replace previous performance measurement tools, which only included financial dimensions (Kaplan, Norton, 1992). Due to the fast moving pace of the modern society, companies need to find new solutions to adapt to their business environment. According to Kaplan and Norton (1996) these new solutions should combine financial and non-financial measures in an information system that includes staff throughout the organization. The performance measurement system, the Balanced Scorecard, distances itself from being a controlling system to be an educational, informational and communications instrument (Kaplan, Norton, 1996). The Balanced Scorecard is a fresh approach towards integrating several performance drivers and evoking a company’s strategy (Kaplan, Norton, 1992). As the name Balanced Scorecard implies, a balance of external and internal figures is created. External factors consist of shareholders and costumer’s interests, whereas innovation- and insider perspectives are internal factors. Furthermore are past and future performances equally weighted. Financial data lays the foundation for all strategic action, nevertheless it lays in the past. Intangible assets are reflected in future dimensions. (Kaplan, Norton, 1996)
Summary of Chapters
1. Introduction: Outlines the purpose of the study and introduces the Balanced Scorecard concept alongside a brief background of the Ericsson corporation.
2. Application of the Balanced Scorecard: Details how the scorecard is implemented at Ericsson by defining specific strategic themes and performance drivers across four distinct perspectives.
3. Conclusion: Summarizes the study's findings, noting that while the Balanced Scorecard is a powerful tool for large organizations like Ericsson, it requires careful adaptation to remain effective amidst environmental changes.
Keywords
Balanced Scorecard, Ericsson, Performance Measurement, Financial Perspective, Customer Perspective, Internal Perspective, Innovation and Human Perspective, Strategic Management, Key Success Factors, KPI, Asset Utilization, Order-to-Cash, Telecommunications, Business Strategy, Corporate Performance.
Frequently Asked Questions
What is the core focus of this publication?
The publication examines the implementation of the Balanced Scorecard as a strategic performance management tool specifically tailored to the Ericsson corporation.
What are the primary thematic fields covered?
It covers the four perspectives of the Balanced Scorecard—financial, customer, internal, and innovation/human—and how they align with Ericsson's corporate vision.
What is the primary research objective?
The objective is to derive a practical Balanced Scorecard framework for Ericsson by analyzing its strategic needs, operational techniques, and 2009 performance metrics.
Which scientific methodology is utilized?
The work employs a case study methodology, synthesizing academic theory from Kaplan and Norton with primary data from Ericsson's annual reports and internal strategies.
What topics are addressed in the main body?
The main body breaks down Ericsson's strategic application of the scorecard, including specific drivers like revenue growth, cost reduction, customer satisfaction, and employee capability.
Which keywords characterize the work?
Key terms include Balanced Scorecard, Ericsson, performance measurement, strategic management, key success factors, and telecommunications.
How does Ericsson manage its financial strategy within this framework?
Ericsson focuses on revenue and growth mix, cost reduction, and productivity improvement, utilizing measures like ROCE and operating income to ensure long-term sustainability.
Why is the "Innovation and Human Perspective" significant for Ericsson?
It is vital for maintaining quality, driving employee satisfaction, and fostering the empowerment needed to innovate in a highly competitive and fast-moving technological market.
- Arbeit zitieren
- Anna Lena Bischoff (Autor:in), 2011, The Balanced Scorecard, München, GRIN Verlag, https://www.hausarbeiten.de/document/168541
