Cost Case
Essay by shabgeer • June 15, 2013 • Essay • 4,267 Words (18 Pages) • 1,436 Views
Norton Lily Case Study
Q2)How has Norton Lilly International's use of the balanced scorecard and other performance measures aided in the company's effort to implement a companywide performance management system?
Answer: Balance score card is defined as a performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes. The balanced scorecard attempts to measure and provide feedback to organizations in order to assist in implementing strategies and objectives.
Norton Lily had hired Jim Burton in February 2007 as the CFO and COO of the company for developing a sustainable business platform for the company that would be capable of doubling the company size, while generating an attractive return on investment. Burton suggested that the company should introduce process mapping by following the executive committee formation for helping others to understand what the company has to offer. The challenge what Burton faced was to change the mind-set of the employees and being able them to convince to perform work in better way to deliver better results for the future. Burton launched the process mapping in Liner group, which operated in eight different U.S offices. By the end of 2007, mapping the key process involved in delivering each type of service had helped management and key employees understand the underlying causes of service failures and begin to close performance gaps. The success of process mapping in the liner business unit created buy in among executive committee members and helped Burton move the company towards the concept of continuous improvement. With the help of process mapping, Burton identified operating level objectives for each process which were known to be Key performance indicators (KPI).
Balance scorecard further focused managerial employee's attention on the performance of value creating processes. Metrics used by Norton Lily in the balance score card included Process KPI'S, customer satisfaction and financial performance.
Later in 2007, company's balance scorecard system was expanded to include a dashboard of performance indicators that could provide a quick overview of operational and financial performance at the business unit level. The dashboard was initially established for the Liner business. The initial dashboard consisted of limited collection of KPI such as revenue compared to budget, expense groupings compared to budget, capital expenditure compared to budget and top 10 customer profitability.
Besides use of balance score card, Burton as also introduced a new A new capital policy, now owned by the Executive Committee, states that, for project-related issues, if the Committee deems a project worthy of consideration, a detailed due diligence process takes place; the final decision is to be based on solid evidence of the value the project would bring to the business. For non-project-related expenditures, an AFE (authorization for expenditure) system has been implemented to ensure each business unit head sees and signs off on all requests and can therefore understand the impact of the expenditure on the targets."
Norton Lily Case Study
Q2)How has Norton Lilly International's use of the balanced scorecard and other performance measures aided in the company's effort to implement a companywide performance management system?
Answer: Balance score card is defined as a performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes. The balanced scorecard attempts to measure and provide feedback to organizations in order to assist in implementing strategies and objectives.
Norton Lily had hired Jim Burton in February 2007 as the CFO and COO of the company for developing a sustainable business platform for the company that would be capable of doubling the company size, while generating an attractive return on investment. Burton suggested that the company should introduce process mapping by following the executive committee formation for helping others to understand what the company has to offer. The challenge what Burton faced was to change the mind-set of the employees and being able them to convince to perform work in better way to deliver better results for the future. Burton launched the process mapping in Liner group, which operated in eight different U.S offices. By the end of 2007, mapping the key process involved in delivering each type of service had helped management and key employees understand the underlying causes of service failures and begin to close performance gaps. The success of process mapping in the liner business unit created buy in among executive committee members and helped Burton move the company towards the concept of continuous improvement. With the help of process mapping, Burton identified operating level objectives for each process which were known to be Key performance indicators (KPI).
Balance scorecard further focused managerial employee's attention on the performance of value creating processes. Metrics used by Norton Lily in the balance score card included Process KPI'S, customer satisfaction and financial performance.
Later in 2007, company's balance scorecard system was expanded to include a dashboard of performance indicators that could provide a quick overview of operational and financial performance at the business unit level. The dashboard was initially established for the Liner business. The initial dashboard consisted of limited collection of KPI such as revenue compared to budget, expense groupings compared to budget, capital expenditure compared to budget and top 10 customer profitability.
Besides use of balance score card, Burton as also introduced a new A new capital policy, now owned by the Executive Committee, states that, for project-related issues, if the Committee deems a project worthy of consideration, a detailed due diligence process takes place; the final decision is to be based on solid evidence of the value the project would bring to the business. For non-project-related expenditures, an AFE (authorization for expenditure) system has been implemented to ensure each business unit head sees and signs off on all requests and can therefore understand the impact of the expenditure on the targets."
Norton Lily Case Study
Q2)How has Norton Lilly International's use of the balanced scorecard and other performance measures aided in the company's effort to implement a companywide performance management system?
Answer: Balance score card is defined as a performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes. The balanced
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