Running Head: MAKING BALANCED SCORECARD WORK TO IMPLEMENT BUSINESS STRATEGIES AT MAGIC TECHNOLOGY
Making Balanced Scorecard Work to Implement Business Strategies at Magic
Professor: Dr. Bullen
Florida National University
Course: Human Resources Management
Case Study Report Week IV
Magic Technology is a global company that manufactures electronic components, specifically passive components. Since their specialization was on passive components, they could perform the functions of moderating electric current and voltage, storing static electricity, preventing electromagnetic interference and filtering impurities in electric current. ...view middle of the document...
Electronics manufactures had switched to a globalized business model, in order to adapt to changes in the business environment. This implementation had the purpose of entering Mainland China. However, CEO Lo was able to see a gap between the company’s headquarters and the factories in Mainland China. The Magic Industry was able to identify some challenging before importing the balanced scorecard. The first challenge they identify was that the business strategy process was unclear. Also there was no mechanism to evaluate previous strategic planning execution; consequently, it was difficult to observe the effectiveness of different strategies. Second challenge was that the operational execution in factories was weak meaning that the stability of production in mainland factories its quality wasn’t reliable. Third challenge was that the performance checking mechanism had not been completed. The key performance indicator had been evaluated and tracked, but had not connected them to performance. The forth challenge was that the management system needed to be reinforced. And the last challenge was that the product analysis was insufficient. These challenges drove the CEO to search for new management systems. Implementing the balanced scorecard strategy seems to be the best solution for most of these challenges (Brewer, 2003).
Since the industry was not equipped with a relevant existing management and operational mechanism for strategy formation, the CEO hoped to construct an integrated structure and logic of strategy formation management. Magic CEO wanted to top management’s strategic thinking to be understood more effectively and accurately by the staff since there was no concrete mechanism for strategy execution, which caused issues such as miscommunication of strategy. If Magic wanted to expand they could loose focus due to their lack of KPI system setting. In order to avoid that problem Lo came up with the idea of integrating the KPI system and the balanced scorecard in order to increase the visibility of the linkage between the KIPs of departments and staff.
In the preparation, Magic set up a project team to oversee the overall project planning, which also included expected project purposes and benefits, project scope and schedule. The project team set a project plan to implement the balanced scorecard at the headquarters within one-year period. Such project was expected to be implemented in every area of the company like finance, marketing, accounting and human resources. They first needed to prepare each area in the preparation before implementation, in designing the balanced scorecard for each department, and in executing the balanced scorecard for each departmental area.
Since the formation of the strategy was a long process, Magic decided to based the strategy on the SWOT scorecard model, which underwent six stages. In the first stage they analyzed and clarified the equipped competences of Magic to Asses the parts...