How Apple uses the Balanced Scorecard

Adapted from Performance Magazine-April 12, 2017

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A Balanced Scorecard helps a company innovate and elevate itself to new heights of performance, by assisting its leaders in making key decisions that are in line with the company’s objectives. It creates a foundation, on which one can further add to until the desired outcome is reached. Apple Inc., a fierce player in the tech market, is a well-known brand that uses the balanced scorecard in their work.

According to a Harvard Business Review article, Apple Inc. uses five performance indicators:

1. customer satisfaction;

2.  core competencies;

3. employee commitment and alignment;

4. market share;

5. shareholder value.

Apple Inc. did not always focus on their customers. Previously, they used to focus on their technology and products, but since then, things have shifted towards the idea of customer satisfaction, which is now a core tenet in their company. Many companies in the computer industry collaborate with a customer-survey company, called J.D. Power & Associates. Yet Apple decided to make their surveys, as a means of fulfilling their customer’s wishes.

Equipping employees with innovative solutions, like user-friendly interfaces and effective distribution systems is essential to developing their competencies. However, many Apple leaders believe measuring the impact these solutions have is a complex task. In the long run, this American tech company will be issuing out quantitative measurements to find out the answers they need and see if enabling employees in this fashion leads to nurturing their skillsets.

Apple Inc. believes commitment and alignment among employees are important. As a result, they conduct a thorough employee survey of every organizational branch, once every two years, with surveys being done randomly between employees. The questionnaires wish to find out how every member of the company comprehends their individual strategy and to what extent they can connect this to the overall organizational strategy, to reel in success.

Market share is also another essential indicator, especially for a company in the tech industry. This is because, by gathering as many market shares as they can, Apple Inc. not only increases its profits, but also influences the software developers they collaborate with.

Shareholder value in Apple Inc. is put into its sales vision, product design, global manufacturing, and operations. This correlation is used to evaluate a unit’s activities, also tying this to the company’s appraisal system and using it to assess new business deals. By doing so, the company hopes to create investments for future growth.

These five indicators help in managing “long-term performance”, instead of enabling a “controlling” approach that may be based on short or medium-term performance. This further aids each unit to progressively advance its activities and performance, based on those five pillars. Overall, the balanced scorecard helps Apple Inc. to keep track of their performance, so that they meet their set objectives and goals.

Question

(a) Define the term balanced scorecard and briefly state the four (4) perspectives that firms can use to evaluate their strategies.  (12 marks)

(b) State the two(2) types of implementation control that Apple Inc. could use to assist their overall strategy.   (6 marks)

(c) Strategic evaluation is crucial to the continuous success of Apple Inc.   Advise the strategists citing three basic requirements for strategy evaluation.      (7 marks)

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