Buss499 Case Study Examples

Published: 2021-06-22 00:32:34
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Category: Goals, Business, Finance, Management, Company, Strategy

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The balanced scorecard management tool was very beneficial to Saatchi & Saatchi upon implementation. Saatchi & Saatchi Company used a balanced scorecard to implement a strategy that was designed to rescue it from a condition of abysmal performance that engulfed it in the early 90s. After close to two decades of phenomenal growth since its formation, the company came to a serious crisis that Greenhalgh (2004) noted almost left it bankrupt in the mid-1990s. The adoption and implementation of a balanced scorecard technique was what this company needed to regain and increase its position at the top of the advertising industry. Specifically, the focus was on the financial perspective, though the other perspectives of the balanced scorecard approach are also manifested in the implementation (Greenhalgh, 2004). This work analyses the implementation of the balanced scorecard at Saatchi & Saatchi and the apparent results from the implementation.
The company set out vision and financial goals that would drive that were to define its strategy and performance. The goals set out by Saatchi & Saatchi can be termed as long-term oriented and relate to the three dimensions of the balanced scorecard that are oriented towards the long-term namely: customer perspective, operational perspective and innovative perspective (Stewart & Carpenter-Hubin, 2001). According to Niven, the financial perspective is short-term oriented.
Saatchi & Saatchi came up with financial goals that were expected to be realized by December 2000 (Greenhalgh, 2004). these included growing the company’s revenue base above the market level, conversion of 30% of this increase in revenue to operating profit and as a result, doubling the company’s earnings per share. To achieve this, management at Saatchi & Saatchi new that they would have to undertake painstaking initiatives considering the prevailing condition of this company. These would then translate into measures used by Saatchi with respect to the financial perspective. These goals, or measures, were short-term in nature because they were not aimed at determining the long-term success of Saatchi & Saatchi. According to Niven, these undertakings are in line with shareholder value creation, a concept that is at the heart of the financial perspective of the balanced scorecard. In a bid to improve productivity, which is yet another crucial measure of financial performance according to Niven, Saatchi & Saatchi set out to prioritize of its worldwide business units. Greenhalgh (2004) noted that investments were to be focused on the company’s large agencies that were the most promising in order to ensure that the company maximized profitability.
Arguably, Saatchi & Saatchi was more focused on the financial perspective of the balanced scorecard. Despite the fact that the financial perspective is short-term oriented, Saatchi 7 Saatchi Company gave it the more consideration than it did for the long-term oriented perspectives. However, it is observable that the initiatives related to this perspective were essentially focused on the firm’s effectiveness in maximizing shareholder value, growing revenues and enhancing productivity as stipulated by Niven (N.d). The outcome was impressive. Greenhalgh wrote that Saatchi & Saatchi was able to achieve its financial goals six months before the stated deadline (2004).
In its implementation of the balanced scorecard, Saatchi & Saatchi directed another focus on the company’s vision. Prior to implementation of the balanced scorecard at the company, Greenhalgh (2004)reported that communicating its strategy to the clients was not easy because the corporate vision was not well defined. Consequently, the different business units had minimal visionary similarities and acted more like competitors with a common ownership. The business’ goals relating to its vision were formulated simultaneously with the financial goals (Greenhalgh, 2004). These were focused on giving Saatchi & Saatchi a clear cut vision mission not only in its geographically sparce business units, but also among its clients. According to Roberts, this was conspicuously lacking at Saatchi & Saatchi prior to implementation of the balanced scorecard (Cited in Greenhalgh, 2004). The initiatives undertaken by this entity in a bid to have a profoundly defined mission and vision were clearly long-term. The goals set by the company, that would become measures of the long-term perspectives of the balanced scorecard included the prioritization of business units, and therefore core clients. These endavours were directly affecting the financial measures that was perhaps the principal focus of Saatchi & Saatchi. The results from of the implementation of the balanced scorecard from this perspective were forthcoming. He company was able to easily identify its corporate starategy thanks to employees and clients (Greenhalgh, 2004).
The statement of the vision at the company and implementation through the balanced scorecard were important moves towards driving the company to success. A focus on the financial perspective would not be enough because this has been termed as deficient in measuring a company’s performance (Stewart & Carpenter-Hubin, N.d). According to Robin (N.d), having a clear mission and vision are key drivers of a company’s long-term well-being. Since they constitute the long-term perspectives of the balanced scorecard, there interelationship with the financial perspective imply that the success of Saatchi & Saatchi partly a resultant of initiatives tat were implemented from them. Despite this, it is clear that the finacial perspective of the balanced scorecard had a significant role in Saatchi & saatchi’s reported success in the industry in the early 2000s.
References
Greenhalgh, C. (2004) Building a Strategic Balanced Scorecard: Saatchi & Saatchi
Complementary Case Study. Business Intelligence Company. Retrieved July 20, 2010, from http://www.business-intelligence.co.uk/PDFdownloads/strat_bsc/Saatchisr.pdf
Niven, P. (N.D.) Financial Perspective. EPM Review. Retrieved July 20, 2010, from
http://www.epmreview.com/Resources/Articles/Delivering-shareholder-value-growing-revenue-and-enhancing-productivity.html
Robin, D. (N.D) Vision, Mission and Values: Management Tools for Building a Better
Workplace. Daniel Robin & Associates. Retrieved July 20, 2010, from http://www.abetterworkplace.com/027.html
Stewart, C.A. & Carpenter-Hubin, J. (N.d). The Balanced Scorecard. Retrieved 21 November
2012 from: http://www.abahe.co.uk/Free-En-Resources/Accounting/The-Balanced-Scorecard.pdf

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