APPLICATION OF BALANCED SCORECARD IN E COMMERCE ORGANIZATION
It used for the measuring and provision of feedback to e-commerce related businesses. The collection of information is very important for the provision of quantitative outcomes. The gathered information is important for interpretation by executives and managers and it used in making better decisions for the business. The balanced scorecard is used for the reinforcement of the good organizational behaviors through the isolation of four different areas which are evaluated. It is used for the attainment of goals, measurements, goals and initiatives which are derived from the four business functions. The sustain measure places stress on the employed return of capital and the rate of net profit. The harvest stage handles issues with the analysis of the cash flow. The financial measures are the same to those which are utilized in the traditional performance measurement (Ahmed et al.
2011, p. The customer perspective deals with analysis of the level of satisfaction of the customer with an organization’s services or products. Kaplan and Norton identified three basic process involved in the internal operations of a business. The process of innovation assists in seeking the customers’ priorities of the medication of the operations involved in manufacturing of the intended product. The customer’s priority is solicited for through the carrying out of market survey. It is also assessed through the number of times when there is a market survey carried. The operation process starts with receiving an order and is brought to an end when the product is delivered or service is provided to the client. The technology giant is regarded as the largest internet retailer globally as evaluated by market capitalization and revenue.
It is also regarded as the second largest in relation to the total sales after Alibaba Group. Its website, amazon. com website began as an online bookstore, but it later diversified and began selling video streaming and downloads, jewelry, food, and even furniture. Amazon Company also produces consumer electronics including fire tables, echo, and fire television and kindle e-readers. The financial objective for the bank is increasing its margins, while for the customer is reducing the rates of interests for the loans. The internal business processes focuses on the increment in lending while the learning and growth perspective focuses on monitoring of the demands for loans. In measuring profitability, organizations need to have an understanding of the dollars which they make if they have to engage in the retention of every costs.
The more the sales dollars, the more the profitability of sales. Thus, a profit margin is considered as part of the sales revenue which is not used for payments of costs. The bank group has to engage in raising or reducing its sales prices. Nonetheless, the company needs to understand that profit margins alone do not tell of the true cost-efficiency in the realization of sales. The second step in the formation of a balanced scorecard for the company involves the creation of transformation agenda. It includes the activities which need to be done better for increasing the organization’s chances of increasing its success levels. It also includes the levels for driving cane. Measures helps in the accomplishment of two things.
They assist in managing what is not working and assist in the motivation of people towards responding to the things which are being measured. It is critical to select the measure which helps in the driving of the strategy. The fifth and final step which I consider is important is the launching of some initiatives. The initiatives refers to where the company comes to life. The financial measures often rely on the dependent variables and are the lagging indicators. Some businesses are tempted to make this connection quantifiable but given the lag time is hard to predict and many factors are capable of impacting on the result, there cannot be an established link. Thus, there is need for the Amazon Company to make a quantitative connection for the lending indicators.
The lack of dedication of the senior officials is also another possible challenge. The most common cause of failure is the passing of the plan to the lower management. The execution of the measurement with the wrong indicators can possibly result in the distraction of the organization from its execution plan. It is possible that the balanced scorecard can be introduced for the sole purpose of compensation. The compensation linkage only happens effectively when it is part of the process of the translation of the strategy of the company. Tracking Stock The alternative method which I have selected for this analysis is the tracking stock. This is used in measuring the performances of business unites through the issuance of a trading stock.
The second associated benefit of applying tracking stock is the ability of forcing capital markets in recognizing the overlooked organizational value. For an e-commerce organization, it could not be properly valued. Markets could not possibly identify the value created in the organization through the e-commerce business. Through the issuance of a trading stock, the Amazon Company forces the markets into examining particular units. This forced can result in revealing the market valuation errors and this enhances the wealth of the shareholders. The associated problems including misleading financial measures, difficulty in choosing some of them and the difficulties in the translation of the nonfinancial measures. The balanced scorecard was in 2000 ascertained to have significant effects on organizational performance for the workers. The balanced scorecard is considered as rewarding, measuring and motivating people and then innovation of their strategies.
The success of the balanced scorecard system is highly dependent on the proper execution. The six major elements of the success of the balanced scorecard include the development of the business strategy and the involvement of the senior leadership in the process of its development. and Khan, M. A. Comparative significance of the four perspectives of balanced scorecard. Interdisciplinary Journal of Contemporary Research in Business, 3(1), pp. Al-Najjar, S. In 4th SME International Conference, Allborg University, Denmark. Beer, M. The challenge of Implementing the Balanced Scorecard. In 6 th Twente Conference on Information Technology, enschede. Gane, R. P. Which Performance Measurement Is Best for Your Company? Management Accounting Quarterly, 4(3), p. Kaplan, R. S. and Norton, D. The challenge of implementing the Balanced Scorecard.
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