Philips's Balanced Scorecard Performance Measurement System

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Introduction Philips Electronics is an international company based in Netherland. The company was founded in 1891 by Gerard Philips and his father. It is one of the world largest, successful and recognisable electronics companies. Philips manufactures a diverse range of products and is “a leader in cardiac care, acute care and home healthcare, energy-efficient lighting solutions and new lighting applications, as well as male shaving and grooming and oral healthcare”. Philips organisational structure consists of three divisions: Consumer lifestyle, Healthcare and Lighting (Company profile, Philips, 2013). This report discusses the Philips’s balanced scorecard performance measurement system from different perspectives. This system…show more content…
The BSC allows managers to look at an organisation from four important perspectives, financial, customer, internal business, and employee learning and growth, which are critical for running the organisation and creating value (Smith et al, 2015, p.621). The BSC performance measurement system delivers the following benefits, it: • Transforms organisation’s strategy into operations • Brings into line everyone day-to-day work in organisation to strategy • Synthesis financial and non-financial reporting • Indicates and focuses on important objectives and its measures • Concentrates on organisation’s strategy and critical success factors • Enhances communication within organisation and provides wider organisation’s vision understanding • Delivers a more complete and balanced view of organisation’s performance Companies across the world from representing different business models and industries in both public and private sectors utilise BSC performance measurement systems to help with organisational management (Appendix 1: Balanced Scorecard Adopters). 2. A strategy map for the Philips Electronics One of the first steps in designing and developing a BSC is a constriction of a strategy map. A strategy map is “a visual representation that explains the cause and effect relationship that link the objectives of the perspectives of the BSC and the organisation’s objectives” (Kaplan
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