Apple uses the scorecard as a device to plan long-term performance Adjusting Long-Term Performance Apple Computer developed a balanced scorecard to focus senior management on a strategy that would expand discussions beyond gross margin, return on equity, and market share. A small steering committee, intimately familiar with the deliberations and strategic thinking of Apple's Executive Management Team, chose to concentrate on measurement categories within each of the four perspectives and to select multiple measurements within each category. For the financial perspective, Apple emphasized shareholder value; for the customer perspective, market share and customer satisfaction; for the internal process perspective, core competencies; and, finally, for the innovation and improvement perspective, employee attitudes. 

Categories by Apple Management 

Apple's management stressed these categories in the following order; 

• Customer Satisfaction: Historically, Apple had been a technology and product focused company that competed by designing better computers. Customer satisfaction metrics are just being introduced to orient employees toward becoming a customer-driven company. J.D. Power & Associates, a customer-survey company now works for the computer industry. However, because it recognized that its customer base was not homogeneous, Apple felt that it had to go beyond J.D. Power & Associates and develop its own independent surveys in order to track its key market segments around the world. 

• Core Competencies: Company executives wanted employees to be highly focused on a few key competencies: for example, user friendly interfaces, powerful software architectures, and effective distribution systems. However, senior executives recognized that measuring performance along these competency dimensions could be difficult. As a result, the company is currently experimenting with obtaining quantitative measures of these hard-to measure competencies. 

 • Employee Commitment and Alignment: Apple conducts a comprehensive employee survey in each of its organizations every two years; surveys of randomly selected employees are performed more frequently. The surveys questions are concerned with how well employees understand the company's strategy as well as whether or not they are asked to deliver results that are consistent with that strategy. The results of the survey are displayed in terms of both the actual level of employee responses and the overall trend of responses. 

• Market Share: Achieving a critical threshold of market share was important to senior management not only for the obvious sales growth benefits but also to attract and retain software developers to Apple platforms. 

 

Shareholder Value 

Shareholder value is included as a performance indicator, even though this measure is a resultnot a driver-of performance. The measure is included to offset the previous emphasis and focused company, Apple has introduced measures that shift the emphasis toward customers on gross margin and sales growth, measures that ignored the investments required today to generate growth for tomorrow. In contrast, the shareholder value metric quantifies the impact of proposed investments for business creation and development. 

 

Conclusion Organizations seeking to implement a Balanced Scorecard are striving to become a strategy-focused organization. Strategy-focused organizations exploit the Balanced Scorecard and technology to become more agile. These organizations attain incremental returns on their customers, processes, employees, and technologies. Organizations must develop the scorecard to fit their needs. Major challenges occur when developing measures, simplifying the process, handling resistance to change, building in flexibility, communicating organizational weaknesses, gathering data, adapting technology to the process and benchmarking. Considerable time and expense are customarily invested to maintain top management support, keep the scorecard current, and train staff and to maintain a positive organizational culture. 

a) The balanced scorecard based on market share, employee commitment and alignment, core competencies, and customer satisfaction are some of the metrics that can be used to measure Financial Perspective, Customer Perspective, Internal Business Perspective, Learning and Growth perspective what another metric can be used as a measure for each from the Case Study above and give a few more ideas on how to apply the balanced scorecard. 

b) Discuss some of the challenges faced by companies when implementing balanced scorecards.