Case A

Case A consists of two parts which have been named Case A-1 and Case A-2. The purpose of Case A is to identify various measures and place them within their correct categories. Case A also involves creating causal chains and demonstrating how achieving one objective can essentially have a positive domino effect.

Case A-1

Objectives and measures can be sorted into four distinct categories when using BSC. These categories are: learning and growth, internal business processes, customer, service and financial. The following table illustrates examples of measures that fit into the four categories.

Case A-2

Case A-2 will demonstrate two causal chains. The purpose of this Case is to explain how one positive action can lead to subsequent positive effects; such as greater financial returns. Causal chains are an important part of BSC.

Causal Chain 1

Create new products that cater to an increasingly diverse customer base, based upon customer comments and requests. à Monitor the effectiveness of the new products. à Use newsletters to send the word out to existing customers. à Gain increased revenue.

Explanation: If the business is growing, then the customer base will become increasingly diverse. This means that eventually new products or services will need to be added in order to suit the needs of new and existing customers. The first thing the business should do is ask for the customers’ opinion. A customer satisfaction survey is a very effective way to do this. Because creating new products can be risky, a team of marketing experts should review the success of the new products during their initial phase. The marketing team should also send newsletters to existing customers to let them know about the new products that will meet their needs. As a result of meeting a need and listening to customer suggestions, the firm increases their overall revenue.

Causal Chain 2

Create an incentive program where employees create challenging, yet attainable goals and are rewarded for reaching them. à Increased employee productivity à Employee satisfaction creates better customer service. à Higher customer retention rate due to satisfied and helpful employees

Explanation: The creation of an incentive program centered on employee goal-setting would eventually lead to increased employee productivity. Of course, the goals would have to be work-related and they would have to be something that benefits the company. Employees who reached their goals would not only be personally satisfied, but they would receive a reward for their hard work. Those who did not meet their goals would be encouraged to set smaller goals and try again. All goals would be reviewed by the supervisor in charge. Satisfied employees provide greater customer service. Greater customer service would prove to create a higher customer retention rate.