Essay About Balanced Scorecard And Unclear Business Strategies

Magic Technology
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Magic TechnologyBackgroundEstablished in 1994 in TaipeiManufactures electronic componentsPassive components (EMI components and inductors)The balanced scorecard was proposed to deal with the first four of the five business challenges: unclear business strategies, weak execution, difficult performance assessment and weak management systems for MagicPreparation Phase Strategy FormationNot properly equipped with relevant existing management and operational mechanism for strategy formationLo hoped to construct an integrated structure to build a more comprehensive mechanismStrategy ExecutionNo concrete mechanism for executionIssues such as: miscommunication, lack of management, reduced effectiveness of strategyLo wanted the top management’s strategic thinking to be understood more effectively and accurately by the staff.Performance ManagementDesign PhaseStrategy FormationIn the first stage of the discussion process, the project team did an internal and external environment analysis of Magic. This analysis clarified the equipped competencies of Magic to assess the parts that required strengthening and supplementation and to shape the future state of MagicSecond, the team used the SWOT-Scorecard question set for a strategy discussion. This SWOT-Scorecard question set integrated the SWOT analysis and the four areas of the balanced scorecard to form a matrix, in which each intersected box contained corresponding questions for team members to answerThird, the team could see the SWOT-Scorecard from multiple perspectives, which could result in a lot of different strategies, but not all of the strategies were suitable for the current state of Magic.Fourth, the team used a product matrix of industry attractiveness versus company strength to determine specific product strategies.Fifth, the team formed and summarized specific product strategies and determined the priority of different product strategies.Strategy MapStandard structure to describe strategy, using a set of consistent and standard strategic language, for the internal staff to align, focus and integrate their ideas with the four perspectives of the balanced scorecard, such that the strategy could be more concrete for the implementation of the balanced scorecard. The strategy map formulated the strategic objectives that would be used in the next stageStrategic KPI DesignEmphasized quantifying the formulated strategic objectives and setting up the estimated target value for management.The project team first thought about and designed the related parts of the strategic KPIs, including the KPIs themselves and their formulae, frequencies and target values.  Then the strategic KPIs were discussed with an external consultant during the learning sessions.  During the discussions, it was discovered that some KPIs were repetitive, and these were deleted from the balanced scorecard.Execution PhaseIf Magic could use the balanced scorecard as a foundation for its management system, cohesion could be formed between different action plans to pursue Magic’s strategic objectives and measurements all together.Existing action plans needed to be reviewed, in order to clarify their connections with the strategic objectives.Action plans that did not have a strategic meaning were deleted, while new strategic action plans had to be created for those strategic objectives that lacked support.