Benefits of Introducing the Indicators-based Balanced Scorecard as Strategic Controlling Instrument for Implementation of Corporate Strategy from Four Different Perspectives

Table of Contents

• Chapter 1 Introduction
• 1.1. Problem Description
• 1.2. Objectives
• 1.3. Structure
• Chapter 2 BSC as A Strategic Controlling Instrument
• 2.1. Traditional Performance Measurement Concepts as Predecessor of BSC
• 2.2. Comparing BSC with Traditional Performance Measurement
• 2.3. Controlling Instruments
• 2.3.1. Operational Instruments
• 2.3.2. Strategic instruments
• 2.4. Balanced Scorecard (BSC)
• 2.4.1. Implementation of BSC
• 2.4.2. Targets and tasks of BSC
• 2.5. The four-perspectives of BSC
• 2.5.1. Financial
• 2.5.2. Customer
• 2.5.3. Internal business process
• 2.5.4. Learning and growth
• 2.6. Strategic targets formulated in the four perspectives
• 2.7. The concept of indicators system
• 2.7.1. Monetary indicators
• 2.7.2. Non-monetary indicators
• Chapter 3 Implementation of BSC in automobile industries
• 3.1. BSC at Daimler AG
• 3.2. BSC at BMW Group
• Chapter 4 Analysis of using BSC
• 4.1. Cause-and-effect correlations
• 4.2. Advantages and Disadvantages of BSC
• 4.3. Chances and challenges of implementing BSC

Objectives and Key Themes

This thesis examines the benefits of implementing an indicator-based Balanced Scorecard (BSC) as a strategic controlling instrument. It investigates whether the BSC, with its four perspectives, enhances corporate performance and if its positive impacts are demonstrably reflected in company financial statements. The thesis uses case studies of Daimler AG and BMW Group to analyze the practical application and effects of the BSC. * The Balanced Scorecard as a strategic controlling instrument. * Comparison of BSC with traditional performance measurement methods. * Analysis of BSC implementation in the automotive industry (Daimler AG and BMW Group). * Cause-and-effect relationships within the BSC framework. * Advantages, disadvantages, chances, and challenges of BSC implementation.

Chapter Summaries

Chapter 1 Introduction: This chapter introduces the challenges faced by managers in achieving company targets while also considering customer, employee, and stakeholder satisfaction. It highlights the limitations of traditional performance measurement focusing solely on financial indicators and introduces the Balanced Scorecard (BSC) as a modern, multidimensional approach addressing these limitations. The chapter outlines the thesis's objectives: to explore whether the BSC helps managers overcome the described challenges, whether it's a comprehensive method enhancing performance across four perspectives, whether its positive impact is evident in financial statements, and whether all companies need to address all four perspectives when implementing the BSC.

Chapter 2 BSC as A Strategic Controlling Instrument: This chapter delves into the theoretical foundation of the BSC as a strategic controlling instrument. It begins by contrasting the BSC with traditional performance measurement concepts, highlighting the latter's limitations in addressing long-term strategic goals and non-financial factors. The chapter thoroughly explains the components of the BSC, including its four perspectives (financial, customer, internal business processes, and learning & growth), and the crucial role of an indicator system in translating strategy into measurable actions. It defines the types of indicators (monetary and non-monetary) and demonstrates how these indicators are used to measure progress toward strategic objectives.

Chapter 3 Implementation of BSC in automobile industries: This chapter presents case studies of Daimler AG and BMW Group, analyzing their implementation of the BSC. It examines how the BSC has been integrated into their corporate strategies and provides data from their financial reports over a five-year period to illustrate the positive impact on financial indicators (revenue and EBIT). The analysis includes a detailed overview of the companies' strategies, organizational structures, and the specific ways in which the four perspectives of the BSC are utilized.

Keywords

Balanced Scorecard, Strategic Controlling, Performance Measurement, Financial Indicators, Non-Financial Indicators, Multidimensional Performance Measurement, Automotive Industry, Daimler AG, BMW Group, Cause-and-Effect Relationships, Strategic Implementation, Key Performance Indicators (KPIs), Strategy Mapping.

Frequently Asked Questions: A Comprehensive Language Preview

What is the main topic of this thesis?

This thesis examines the effectiveness of the Balanced Scorecard (BSC) as a strategic controlling instrument, particularly its impact on corporate performance in the automotive industry. It investigates whether the multi-dimensional approach of the BSC, considering financial and non-financial aspects, leads to demonstrable improvements in company financial results.

What are the key themes explored in the thesis?

The key themes include the BSC as a strategic controlling instrument, a comparison of BSC with traditional performance measurement, analysis of BSC implementation in Daimler AG and BMW Group, cause-and-effect relationships within the BSC framework, and the advantages, disadvantages, opportunities, and challenges of implementing a BSC.

What methodology is used in this research?

The thesis utilizes a case study approach, focusing on the implementation and effects of the BSC in Daimler AG and BMW Group. It analyzes financial data from these companies over a five-year period to assess the impact of the BSC on key financial indicators.

What are the four perspectives of the Balanced Scorecard (BSC)?

The four perspectives of the BSC are: Financial, Customer, Internal Business Processes, and Learning & Growth. Each perspective provides a different lens through which to assess organizational performance.

How does the BSC differ from traditional performance measurement?

Traditional performance measurement often focuses solely on financial indicators. The BSC, in contrast, offers a more comprehensive approach by incorporating non-financial indicators across multiple perspectives, providing a more holistic view of organizational performance and aligning strategy with operational activities.

What are the advantages and disadvantages of implementing a BSC?

The thesis explores both the advantages (e.g., improved strategic alignment, enhanced performance measurement) and disadvantages (e.g., complexity of implementation, potential for data overload) of implementing a BSC. It also examines the opportunities and challenges associated with its use.

What types of indicators are used within the BSC framework?

The BSC utilizes both monetary (e.g., revenue, profit) and non-monetary (e.g., customer satisfaction, employee skills) indicators to provide a balanced view of performance across different perspectives.

What is the role of cause-and-effect relationships in the BSC?

The thesis analyzes the cause-and-effect relationships between actions taken within each perspective of the BSC and their impact on other perspectives and ultimately, on financial performance. This helps to understand the interconnectedness of different aspects of organizational performance.

Which companies are used as case studies?

The thesis uses Daimler AG and BMW Group as case studies to illustrate the practical application and effects of the BSC in the automotive industry.

What are the key findings of the thesis (as previewed)?

The preview suggests the thesis will analyze whether the BSC helps managers overcome challenges in achieving company targets while considering diverse stakeholder interests, whether it enhances performance across the four perspectives, and whether its positive impact is evident in financial statements. It also explores whether all companies need to address all four perspectives when implementing the BSC.

What are the keywords associated with this thesis?

Balanced Scorecard, Strategic Controlling, Performance Measurement, Financial Indicators, Non-Financial Indicators, Multidimensional Performance Measurement, Automotive Industry, Daimler AG, BMW Group, Cause-and-Effect Relationships, Strategic Implementation, Key Performance Indicators (KPIs), Strategy Mapping.