Balance Scorecard of Ford Motors Analysis

1. Standards to Evaluate goals: I have a lot of critical success factors to evaluate the Ford Motors goals and ensure that it gets accomplished. Some of standards are financial and others are non-financial and some of them are quantitative and others qualitative in nature. I have judged the performance goals with at least these three standards; 2. 1 Profitability and Growth: Profitability is vital to success for Ford Motors. A profitable business pays interest to lenders, tax to authority and dividend to shareholders and bonuses to employees in time.

It helps in satisfying all the stakeholders of FM. A profitable FM creates more opportunity for growth and a growing FM will generate further profit to satisfy the stakeholders. So, this cycle moves on and helps FM to become a real leader in automobile market. 2. 2 Quality Assurance and Technology Innovation: FM will not grow without quality guaranteed to their customers and introduce new technology to be competent in the dynamic nature of automobile market. FM is following product differentiation strategy, so there is no room to compromise on quality.

To become a market leader it is important to introduce new technology before their competitors. This CSF is also important to achieve the operational goals. 2. 3 Customer Satisfaction: Customer satisfaction level is very important to Ford Motors, because satisfied customers are most likely to be loyal and repeated orders with Ford Motors. It will leads to higher and stable revenue to FM. 2. Organization Performance Measurement Tools: To measure the performance of Ford Motors I have many performance measurement tools and each of them has their own pros and cons.

First I have evaluated the each PM tools and then select a PM tools that is most suitable to Ford Motors. The options of PM tools are; 3. 4 Dashboard: It is a decision support system, a graphically representation of current status and historical trends of an organization’s Key Performance indicators (KPI’s). It mainly uses on both financial and non-financial performance indicators. 3. 5 Budgeting: It is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending. (steven M.

Sheffrin, 2003). It mainly uses on financial performance indicators. 3. 6 Benchmarking: Benchmarking is a performance measurement tool, it compare the performance of FM with the industries best practices. It mainly uses both financial and non-financial performance indicators. 3. 7 Balance scorecard: Balance scorecard was proposed by Kaplan and Norton, it is a performance measurement tools which focus on four different perspectives and uses financial and non-financial indicators. 3. Suitable Performance Measurement Tool:

The performance measurement tool that we are using to judge the performance of Ford Motors must be match with the goals to be accomplished. The tool should also most effective in measuring the FM performance against the performance standards we have identified above. The suitable option to accomplish the strategic and operational goal and the standard of performance I have chosen Balance scorecard. 4. Selection Justification: To measure the performance of FM, Balance Scorecard ensures that “what get measured, get done”. Through balance scorecard I focus on the four perspectives of FM i. e.

customer, internal, innovation and learning and financial. It is more flexible in nature to use both financial and non-financial indicators that are needed to achieve critical success factors of FM i. e. profitability, quality assurance and customer satisfaction. Balance scorecard is the only option which can be focus on internally as well as externally to FM. It is a tool as a mean of translating mission and strategy into objectives and measure into four different perspectives. Benchmarking is the second most attractive option but its focus only externally and it is just a catch up exercise.

The goal to become a market leader is not achieved by following the practice of others i. e. General motors. Dashboard is also attractive option but it is not comprehensive tool but just to support the Balance Scorecard. 5. Application of Balance Scorecard: 6. 8 Performance Gap of Ford Motors: Because our goal is to become a market leader we take General Motors figures as organizational goal. This analysis will help to identify the gaps that I have needed to bridge to made Ford Motors as a real leader in automobile market.

Aspect of Company performance| Factors to be considered| Organizational Goal (G. M)| Actual Result| Gaps| Financial| Change in profit from 2010 Change in Earnings per share from 2010Change in revenue from 2010| 48. 9%58. 5%10. 8%| 208. 1%197. 6%5. 7%| Profit has increased by 160% more than the FM goal. Earnings Per Share has increased 140% more than expected. Change in revenue dropped by 5 %| Customer| Customer Satisfaction RateDealer satisfaction| 85%85%| 68%85%| Customer satisfaction is lower than expected by 17%. Dealer satisfaction is on the board.

| Internal Processes| Fuel economy (miles per gallon) 2011CO2 Emission (grams per mile) 2011| 23. 8300| 27. 8318| 4 Miles/gallon is higher than expected that means lower fuel economy 18 grams/miles co2 emission is higher. It is a negative sign. | People/ Innovation/Growth Assets| Employees Retention rate (Previous 3 years)Employee job satisfaction| 65%60%| 77%69%| Employee’s retention ratio is higher by 12% than expected. It is a positive outlook. Employee’s job satisfaction is good by 9%. | 5. 2 Recommendation: The revenue dropped by 5%, it caused by the less customer satisfaction.

It speaks that customers are not satisfied with the quality of provided automobiles that was guaranteed. Increase in the quality of automobiles by introducing new technology and provide more comfort to the customer’s will be the ultimate solution. Revenue might also be affected by the poor marketing strategy; this will also investigate and improved. Revenue has increased by 5. 7% but profit has balloon up to 208. 1% since 2010. This may because of major business process re-engineering. The question may arise that the quality of the product might hurt by reducing the operating and non-operating costs.

Further steps should be taken to investigate and cure the quality matter to stabilize the revenue. CO2 emission litigation may concern to FM, the allowed CO2 emission in the environment is 235 grams per miles. FM is needs to reduce this emission and introduce technology that should be environment friendly. The gap between the fuel economies should also bridge by introducing the latest technology that is more economically sound. It may also help to increase the customer’s base if FM follows niche strategy of cost leadership in Asia region.