Company Performance Balanced Scorecard

Question: Discuss about theCompany Performance forBalanced Scorecard. Answer: Introduction: A company operating in any industry has certain goals to achieve if it wants to successfully compete with its peers while remaining relevant to its customers. In order to sustain its performance it has to closely monitor itself with respect to various industry benchmarks and peers. One such tool which can effectively perform this task is balanced scorecard. The company of concern in this report is IQTech and it elaborates about its performance with the help of balanced score card. Balanced Scorecard: Balanced scorecard is a holistic approach to measure the performance of a company which is IQTech in the present context. It classifies the performance measure parameters into different clusters namely financial performance, market performance, marketing effectiveness, investment in future, wealth, human resource management, asset management, manufacturing productivity and financial risk. At last all these attributes are summed up in a single parameter which represents the total performance of IQTech (Varia, 2005). The total performance indicator is a means to reflect upon the holistic performance of IQTech wherein all the individual parameters are integrated to have a single performance measure. It is a quantitative measure to understand the performance of the management of the company in terms of utilization of resources. It takes into account the past performance as well as the ability of the company to excel in the future. In terms of total performance the company has fared quite well with 5.339 points which is quite above the industry average of 1.068 in which IQTech works. Financial Performance Financial performance is the most important measure in any companys balanced scorecard and IQTech is no exception. It reflects the performance of the management of the company towards increasing the wealth of the shareholders in terms of profits. It can be deemed to have done well if it is a positive number and bigger it is the better. Several mathematical calculations are computed with the help of information available from the annual reports like operating profit, etc. which give the performance of the company with respect to revenue it generated through sales activities. Financial performance of IQTech seemed to be quite outstanding with a high positive figure of 8.558 which has outperformed the industry average which is in negative. Market Performance This parameter is a measure of managements ability to create demand for its products in the primary and secondary market. The demand is projected and then it is expected that the company will be able to meet the demand. If there are stock outs then it is considered as a negative for the company. The market share of IQTech seems to be average in both primary and secondary market with a score of 0.271 which is moderately high over the mean figure. Wealth It is expected that the performance of the company will add value to the investors upon their initial investment. The type of wealth that is created depends on the stage at which the company is. IQTech has done quite good in this respect with an above average score of 0.661. Human Resource Management It talks about the efficiency of the organization with respect to acquiring, training and retaining a talented pool of employees. IQTech has achieved average performance in this aspect with a score of 0.685. Asset Management IQTech has performed quite well in this respect with a high score of 0.912 which reflects an efficient use of resources by the company. Manufacturing productivity Manufacturing productivity is highest for IQTech with a score of 1.00 which tells that the manufacturing process of IQTech is best in class. Financial Risk A perfect score of 1.00 indicates that IQTech has properly hedged its financial risk and is safe as far as financial fluctuations are concerned. Investment in future This parameter identifies the performance of the companys leadership team in terms of new opportunity identification and investment in those opportunities so that it can create new revenue streams for the company. IQTech has performed poorly in this segment with a low score of 8.058 (Pfaff, Badura, and Ltticke, 2004). There are other parameters as well like marketing effectiveness, wealth, human resource management, financial risk, etc. Reference Pfaff, H., Badura, B. and Ltticke, J. (2004) Balanced scorecard,Public Health Forum, 12(3). Doi: 10.1515/pubhef-2004-2105. Varia, K. (2005) A balanced approach [balanced scorecard],Manufacturing Engineer, 84(2), pp. 4043. Doi: 10.1049/me:20050207.