Advantages And Contributions Of Essay To Balanced Approach.

Discuss About The Advantages And Contributions In The Balanced.

Externalities and its impact on stakeholders

Customers: The products and services being produced by a company should fulfil needs of the consumer (Willman-Iivarinen, 2017). Hence, the feedback from customers should be taken from time to time for improving product and services.

Employees: Employees are the ones who put words into actions. Employees are the asset of the organization. They will play an important role to make sure changes introduced by the company are successful. Accordingly, necessary actions can be taken (Kuye & Sulaimon, 2011).

Business partners: Support of business partners is very crucial for the success of the new business model. The suppliers and dealers are the main business partners of GoLite. As the organization is moving towards sustainable growth, it is important that the suggestions by the suppliers are considered as they are the one who supplies raw material (Nelson, 2017).

Local Communities: The local communities are the ones who will be impacted by the decisions of the organization. Hence, in order to maintain good relationship with the local communities, organization should listen to their suggestions.

Shareholders: The new business model can have positive or negative impact  on shareholders of GoLite. Shareholders’ decisions will decide the financial stability of the organization and hence, it is very important to have proper communication with them (Leszczynska, 2012).

Customers: The positive impact would be that the customers will be able to use eco- friendly products, on the contrary, the negative impact would be, as the organization’s new business model is for- profit, there are chances that the organization may charge high prices for the products offered.

Employees: The externalities created for employees will be positive as they will be highly motivated to work towards saving the planet Earth. And also, as the organization’ new business model is for- profit, the employees will be assured of their job security.

Business Partners: The business partners will be ready to contribute their share towards sustainable development as a part of their philanthropic view. The business partners will also be able to develop mutually beneficial business relationship with the new suppliers and dealers.

Shareholders: As the organization is planning to move towards sustainable growth and development with for-profit business model, the shareholders of the organization will be relieved that there will be stable business growth rate.

Local Communities: The new business model will be beneficial for local communities, as it will reduce negative impact on environment to a great extent. Another benefit for local community is that the company will contribute towards social development.

Different types of accounts that can be used

Customer: Customers more or less require the financial, social as well as environmental information in order to decide that whether the organization will continue to serve them or not. This information also shows them whether the organization’s activities have a positive or a negative impact on the society and environment.

Employees: Employees seek for the financial information such as company’s profitability in order to find out about their future job prospects and to compare their conditions with the employees of other organizations.

Business partners: Business partners are majorly concerned with the financial statements such as Balance sheet and Income statement in order to know about their future growth and survival.

Shareholders: Shareholders are mainly concerned with financial accounts information in order to calculate their returns. Apart from this, they are also concerned with the information pertaining to CSR activities undertaken by the organization.

Local Communities: The local communities are majorly concerned with information related to the social as well as environmental accounts of the company (Open Learn, 2018). They are interested in knowing as to what the company is doing for the welfare of local people.

Balanced Scorecard is one of the most widely used management tool by businesses. This is majorly used to communicate the goals and objectives of an organization, to align the work that needs to be performed by everyone, to measure and monitor the performance of the company, and to ensure that the targeted goals are achieved (Balanced Scorecard Institute, 2017). GoLite with the help of this tool will be able to communicate with the whole organization through a single platform. The vision, mission and goals of the company can be viewed from this scorecard every time. This will always keep the employees of the company motivated and on track. Also, with the help of this tool, the company will be able to track the performance of individuals as well as of the organization as a whole. Another benefit of using Balance Scorecard is that it will help in strategic alignment of tasks that needs to be performed. The two main goals of the new business model of GoLite that are manufacturing sustainable products and leveraging sales can be achieved with the help of this tool (Gintzler, 2018). BSC can be used by GoLite to develop strategy based system, as this will help it to measure performance and link this with the strategies of the business. Apart from this, strategy maps can be used to guide the accomplishment of goals. Hence, it can be said that BSC will help the organization to improve their performance (Quesado et al., 2017).

Balanced Scorecard

BSC helps to measure the performance of the organization on the basis of four major perspectives and they are financial perspective, customer perspective, internal process perspective and the learning and growth perspective. On the basis of the new business model adopted by GoLite, two other perspectives that can be included in BSC are environmental perspective and social perspective.

Financial Perspective: This perspective majorly focuses on the financial performance of an organization. As the new business model of GoLite is for-profit, this perspective of BSC will be of great importance to GoLite (Navasery et al., 2014).

Customer Perspective: This perspective majorly aims at identifying the customer segment that helps the organization to fulfil their financial goals. This perspective helps to link the processes of the company with the products being manufactured, by knowing the targeted market (Gminder & Bieker, 2002).

Internal Process Perspective: This perspective requires organizations to identify the internal value driving processes that will help them to achieve their goals and objectives. The production department, research and development department, etc. forms an integral part of this perspective. In this perspective, it is important to understand about the structure of the company (BSC Designer, 2016).

The learning and growth perspective: This perspective focuses on the intangible drivers of the organizational performance. It includes the training and development of the human capital, improving the information capital, improving the information system, etc. and organizational capital that includes leadership, teamwork, staff involvement, etc. (Bernard Marr & Co., 2018).

Environmental Perspective: This perspective of the balanced scorecard will help to evaluate the corporate social responsibility of the organization towards their stakeholders as well as the environment. The nature of resources being used, energy required in the production process, etc. will be evaluated with the help of this perspective (Purnamasari et al., 2014). This perspective will help GoLite to stay on the track of sustainability (Hostetter, 2018).

Social Perspective: This is also an important perspective from the point of view of GoLite’s new business model. As the organization is taking efforts to protect the environment, the final benefit will be enjoyed by the society as a whole. Hence, it is important that the organization takes into consideration  this perspective as well.

Financial Perspective: GoLite can use the sales growth and the cash flow statement as performance measurement metric. The increase in the sales growth will help the company to know about the second outcome of the organization’s new business model and that is, leveraging product sales. Cash flow statement also depicts the income generated by the company, as it has opted to be a “for profit” organization. Also, it will help to know about the amount available for the charitable purposes.

BSC Perspectives

Customer Perspective: The market share and the customer satisfaction level can be used as performance metric by GoLite. By measuring customer satisfaction, the organization will come to know that whether the company has met the customer needs and demands or not. By measuring market share, the company will come to know that whether they have reached the targeted market or not.

Internal Process: Number of Suppliers and material turnover will help to measure this perspective. By measuring the  number of suppliers and material turnover in the process, the company can analyse the productivity of the organization.

Learning and Growth: Employee retention and employee satisfaction are the best performance metrics for this perspective. By measuring these two, the organization will come to know whether the investment in this field was successful or not (Agarwal, 2018).

Environmental Perspective: The energy utilized and the natural resource management should be used as performance metrics. With the help of these two measures, the organization will come to know about its efficiency. This measure will help in comparing target against actual progress made in context of being sustainable.

Social Perspective: The standard of living and CSR report of the organization should be used as performance metrics. The standard of living measure will help the organization to know that whether it has been is able to add anything to the society or not. And the CSR report will help to analyse the efforts taken by the organization for the welfare of the society.

References

Agarwal, R., 2018. Perspectives in Balanced Scorecard (4 Perspectives ). [Online] Available at: https://www.yourarticlelibrary.com/accounting/performance-measurement/perspectives-in-balanced-scorecard-4-perspectives/53100 [Accessed 5 September 2018].

Balanced Scorecard Institute, 2017. Balanced Scorecard Basics. [Online] Available at: https://www.balancedscorecard.org/BSC-Basics/About-the-Balanced-Scorecard [Accessed 2018].

Bernard Marr & Co., 2018. Balanced Scorecard: A Quick Introduction To The Four Perspectives. [Online] Available at: https://www.bernardmarr.com/default.asp?contentID=968 [Accessed 5 September 2018].

BSC Designer, 2016. What is The Balanced Scorecard Concept: the Four Perspectives. [Online] Available at: https://bscdesigner.com/bsc-four-perspectives.htm [Accessed 5 September 2018].

Gintzler, A., 2018. GoLite, Thru-Hikers' Favorite Brand, Is Back. Sorta. [Online] Available at: https://www.outsideonline.com/2304596/return-golite [Accessed 5 September 2018].

Gminder, C.U. & Bieker, T., 2002. Managing Corporate Social Responsibility by using the “Sustainability-Balanced Scorecard”. Göteborg, 2002. 10th International Conference of the Greening of Industry Network.

Hostetter, K., 2018. Rebirth: GoLite is back in business. [Online] Available at: https://www.snewsnet.com/gear/rebirth-golite [Accessed 5 September 2018].

Kuye, O. & Sulaimon, A.-H.A., 2011. Employee involvement in decision making and firms performance in the manufacturing sector in Nigeria. Serbian Journal of Managemen, 6(1), pp.1-15.

Leszczynska, A., 2012. Towards shareholders' value: an analysis of sustainability reports. INDUSTRIAL MANAGEMENT & DATA SYSTEMS, 112(6), pp.911-28.

Navasery, A., Farhoudnia, B., Ahmadi, M. & Dorostkar, M., 2014. Developing Balance Score card in Managing Corporate Social Responsibility. Advanced Social Humanities and Management, 1(4), pp.35-40.

Nelson, J., 2017. PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT. [Online] Available at: https://s3.amazonaws.com/aws-bsdc/PartnershipsforSD.pdf [Accessed 2018].

Open Learn, 2018. Stakeholders in marketing and finance. [Online] Available at: https://www.open.edu/openlearn/money-management/money/accounting-and-finance/stakeholders-marketing-and-finance/content-section-2.1 [Accessed 2018].

Purnamasari, V., Hastuti, T.D. & Advensia, D.A., 2014. Environmental perspective: a new perspective in balanced scorecard. South East Asia Journal of Contemporary Business, Economics and Law, 5(1), pp.56-63. Available at: https://seajbel.com/wp-content/uploads/2014/12/ACC-38-Environmental-Perspective-A-New-Perspective-In-Balanced-Scorecard.pdf.

Quesado, P., Guzmán, B.A. & Rodrigues, L.L., 2017. Advantages and contributions in the balanced scorecard. Omnia Science.

Spacey, J., 2016. 9 Examples of Stakeholders. [Online] Available at: https://simplicable.com/new/stakeholders [Accessed 2018].

Willman-Iivarinen, H., 2017. The future of consumer decision making. European Journal of Futures Research, 5(14).