CAUSAL CHAINS AND STRATEGY

Causal Chains and Strategy

Causal Chains and Strategy

Task 1

Categorize each of the performance measures in Table 2 as belonging to one of the four perspectives

Solution

Financial Perspective

This will include following of the Performance Measures

Deposit Balances

New Accounts

New Loans Created

Customer Perspective

This will include following of the Performance Measures

Number of Products per Customer

Customer Satisfaction

Customer Retention

Thank-You Calls/Cards to New & Existing Customers

Noninterest income (NII)

Sales Calls to Potential Customers

Internal Business Perspective

This will include following of the Performance Measures

Outstanding Loan Balances

New Products Introduced

Number of New Customers

Referrals

Cross-Sells

Learning and Growth Perspective

Employee Training Hours

Employee Satisfaction

Employee Turnover

Key Business Perspectives

Financial Perspective

How do we look to our shareholders?

The financial objectives of the organization serve as the focus of all activities. Every measure selected for a balanced scorecard should be part of a causal chain that results in improved performance on financial objectives.

Some examples of financial perspective objectives in the hospital industry include operating margins, cost per case, and capital fund-raising.

Customer Perspective--How do customers view us?

Organizations must identify key customers and market segments. Organizations must also determine how they add value for customers and seek to deliver better products and services that are tailored to specific customer needs.

Some examples of customer perspective objectives in the hospital industry include improved recommendation ratings and discharge timeless.

Internal Business Perspective--At what must we excel?

Organizations identify those processes that must be improved or created in order to reach the objectives of the customer and financial perspectives.

Some examples of internal business perspective objectives in the hospital industry include reducing the readmission rate (for the same medical condition) and increasing the doctor-to-patient contact time.

Learning and Growth Perspective--How do we continue to improve and create value?

To achieve the lofty standards set in the previous three objectives, organizations must invest in their people and infrastructure. For this perspective, organizations identify where resources are needed and craft a plan to enable its employees to achieve the objectives of the other perspectives.

Some examples of learning and growth perspective objectives in the hospital industry include increased employee training and retention, improved information technology systems, and adequate staffing for all shifts.

Task 2

Problem of Financial Measures

Information ages companies' success by investing in and managing their intellectual assets. Functional specialization must be integrated into customer value. The financial accounting model that describes performance of business or investment according to financial statement disclosure uses financial measures. Weakness of the financial measure is non-given sufficient information or unrelated entities in the financial statement to measure ...