Corporate Strategic Management and Business

Corporate Strategic Management and Business Re-Engineering Effort Analyzed by the Balanced Scorecard Model

Increasing competition due to increased globalization has led many companies to implement the use of integrated strategic management tools that can connect performance measurements with organizational management. This is especially true for the high-tech sector, which not only must do business in a highly competitive industry, but also must operate in an unpredictable business environment. One such tool is the Balanced Scorecard (BSC), developed by Robert Kaplan and David Norton of the Harvard Business School.

The BSC has four metrics for evaluating how an organization is doing in regards to taking their organizational visions and transferring them into actual strategies and performance. These metrics incorporate both financial and non-financial aspects of the business and include evaluating the organization from: the financial perspective, the customer's perspective, the internal business perspective, and a learning and growth perspective.

Through the changes and improvements that have occurred since the creation of the BSC in 1992, many researchers and business specialists have now purposed that managers can use this strategic tool to not only evaluate their organization's performance, but also to manage their business processes as well.

In the article Corporate Strategic Management and Business Re-Engineering Effort Analyzed by the Balanced Scorecard Model, Wang provides a case study analysis on two high-tech companies - Compaq and Acer. Wang uses the BSC to analyze both companies' business process re-engineering efforts, in an attempt to determine whether or not the BSC is an effective strategic management tool.

In the end, Wang was able to prove his theory that the BSC was an effective analyzer of the companies' re-engineering efforts and is indeed an effective strategic management tool. As Wang notes, "The strong interconnections between the four perspectives and the measures of each of the four perspectives can be seen by the fact that some of the measures for the perspectives are the same." The case study analyses demonstrated that although Acer and Compaq took different approaches to implementing their business re-engineering efforts, they did have key aspects in common, and these were highlighted by the BSC analyses. Wand discovered that there was a significant connection between organizational objectives, such as financial performance and customer satisfaction, and the business processes, including internal process and learning and growth. Both companies realized that business processes had a direct effect on organizational performance.

Critical Analysis:

Wang's article is a persuasive piece of research regarding the usefulness of the BSC as a strategic management tool for analyzing the effectiveness of business re-engineering efforts and documents the relationship between the organization's business processes and the achievement of organizational goals. Wang utilizes two top companies, Acer and Compaq, in his case studies, companies with a plethora of data at his disposal, for this analysis. In addition, he has chosen an industry which is hyper-competitive as well as ever-changing, making it one of the most challenging industries for organizations to thrive in.

Given the extreme nature of these organizations, strategic management tools, such as the BSC, are even more important in ensuring success.

The primary weakness in this study is the use of second-hand data as the sole basis for the research. Wang's study was compiled solely of previously published literature. No primary data was gathered from either Acer or Compaq. Although Wang notes that this eliminates the problems associated with subjectivity when acquiring data directly from sources being studied.