BALANCE SCORECARD

NORWALK DIVISION

Q 1 ) How does Balance Scorecard approach differ from the

other approaches to performance measurement?
The Balanced Scorecard is different from other financial
performance tools because it provides a map of a
businesss strategic objectives in terms of performance
metrics in four different perspectives looking forward.
The Balanced Scorecard maps the businesss strategic goals
in terms of financial, internal processes, customers, and
learning and growth.
Other performance measures provide information from past
performance and are not suited for helping implement
future strategic plans or predicting future performance.
The Balanced Scorecard approach also factors in intangible
assets such as customer loyalty and skilled staff.

Q2 )
Develop
the
Balance
Scorecard
for
Norwalk
Pharmaceutical division of Chadwick, Inc.?
What part of the business strategy that John Green field
sketched out should be included?
Are there any parts that can be excluded or cannot be
made operational?
What are the scorecard measures you would use to
implement your scorecard in the Norwalk pharmaceutical
division?
What are the new measures that need to be developed,
and how would you go about developing them?

CHEDWICK BALANCE SHEET

FINANCIAL
ROCE
Minimizing cost
Investing in new products

INTERNAL
PROCESS

CUSTOMER
Customer Retention
Customer Satisfaction
New customer Acquisition
Number of distributors

Manufacturing Cycle time

Developing product time
Number of defects
Reduce the Hierarchical
level

LEARNING AND
GROWTH
Amount spent on industry
training
Number of patents
Employee satisfaction

BALANCE SCORECARD
GREENFEILD BUSINESS STRATEGY

FINANCIAL
ROCE
Minimizing cost
Investing in new products

INTERNAL
PROCESS

CUSTOMER
Customer Retention
Customer Satisfaction
New customer Acquisition
Number of distributors

Manufacturing Cycle time

Developing product time
Number of defects
Reduce the Hierarchical
level

LEARNING AND
GROWTH
Amount spent on industry
training
Number of patents
Employee satisfaction

 We are decreasing the number of

drugs produced as the approval
process for new products has
lengthened and also it becomes
expensive. Therefore, we
concentrate on upgrading the
existing drug.
We try to decrease the development
cycle to get an edge over the
competitors.

Financial measures scorecard is needed to implement as it tend

to be lagging indicators of the strategy. Firms monitor
nonfinancial measures to understand whether they are building
or destroying their capabilitieswith customers, processes,
employees, and systemsfor future growth and profitability.
The two basic approaches to improving a companys financial
performance are (1) productivity improvements and (2)
revenue growth.
Companies can generate additional revenues by
deepening relationships with existing customers by selling
additional products or services
by introducing new products, selling products or services to
new customers, or by expanding into new markets.
Productivity improvements can be achieved BY
reducing costs by lowering direct and indirect expenses
utilizing financial and physical assets more efficiently to
reduce the working and fixed capital needed to support a
given level of business.

In order to succeed, organizations are relying on competitive

advantage created from their intangible assets, New measures
needed to be developed are such as:
loyal customers, high-quality operating and innovation
processes, employee skills and motivation, data bases and
information systems, and organization culture.
First, it creates a competitive advantage by positioning the
company in its external environment where its internal
resources and capabilities deliver something to its customers
better than or different from its competitors.
Second, having a clear strategy provides clear guidance for
where internal resources should be allocated and enables all
organizational units and employees to make decisions and
implement policies that are consistent with achieving and
sustaining the companys competitive advantage in the
marketplace

Q3 )
How would a Balance scorecard for Chadwick, Inc. differs from
one developed in its divisions, such as the Norwalk
pharmaceutical division?
Do you anticipate that there might be measure conflicts
between the divisional scorecards and those of the
corporation?
If so should those conflicts be resolved and if so how should
they be resolved?

FINANCIAL
ROCE
Minimizing cost
Investing in new products

INTERNAL
PROCESS

CUSTOMER
Customer Retention
Customer Satisfaction
New customer Acquisition
Number of distributors

Manufacturing Cycle time

Developing product time
Number of defects
Reduce the Hierarchical
level

LEARNING AND
GROWTH
Amount spent on industry
training
Number of patents
Employee satisfaction

FINANCIAL
ROCE
Minimizing cost
Investing in new products

INTERNAL
PROCESS

CUSTOMER
Customer Retention
Customer Satisfaction
New customer Acquisition
Number of distributors

Manufacturing Cycle time

Developing product time
Number of defects
Reduce the Hierarchical
level

LEARNING AND
GROWTH
Amount spent on industry
training
Number of patents
Employee satisfaction

CONFLICTS

Division managers at Chadwick had complained to the

Controller about the continual pressure to meet shortterm financial objectives
. As a producer of consumer products and
pharmaceuticals, divisions at Chadwick engaged in
long-term projects with uncertain payoffs.
The Balanced Scorecard seems limited to using the
existing performance measures.
While Chadwick wants to maximize divisional profit
Norwalk wants to spend on training employees and
developing new products.
Chadwick wants Norwalk to develop a blockbuster drug
at low cost at the least time , this adds pressure on
scientists which causes a conflict with Norwalk

SOLVING CONFLICTS
All shareholders must be aware of the decisions ,
conflicts and strategic plan.
Must prepare a proper balanced chart for chadwick
Inc.
. He presented the concept to the president and
chief operating officer who then issued a call to all
Chadwick division managers to develop a scorecard
for their divisions
. The divisional controller at the Norwalk division was
given the task of heading the effort to formulate
scorecard measures for the division.