JCX Case
JCX Ltd operates in a highly competitive market and is involved in the production of parts for the farming industry. It has four plants in New Zealand: Auckland, Wellington, Christchurch and Dunedin.
The CEO of JCX, Jim James, recently attended a conference at which Professor Robert Kaplan of the Harvard Business School delivered the keynote address. His speech covered recent innovations in performance measurement and management techniques that, in his opinion, are revolutionising modern organisations. He spent most of his time explaining the concept of a balanced scorecard (BSC), but he also analysed several successful applications of a balanced scorecard for which he had first-hand knowledge.
Jim came away from the conference convinced that the BSC is a powerful concept, but he was sceptical that organisations really can build models of its uses of resources and important outcomes. He wondered whether other respected management gurus were as enthusiastic about a BSC.
Jim asked you, the CFO of JCX, to discuss the concept of a BSC at the next senior management meeting in order to generate discussion about whether JCX should consider implementing the concept.
At the meeting, you made an introductory presentation on BSC and invited some initial comments/thoughts from the senior managers. There was a robust discussion on BSC and some very important and relevant issues raised. You took notes of some key concerns raised by the senior managers at the meeting.
Prepare an answer to address the following concerns raised at the senior managers’ committee meeting about BSC. Those concerns were:
1. BSC is just the latest management fad.
2. BSC is too complex to model. By the time the strategies, objectives and performance measures are modelled, the information on which they are based will likely be obsolete due to the constantly changing nature of JCX business.
3. That BSC is meant to be just a way to communicate strategy, not actually to manage strategies.
4. It would be difficult to get buy-in of all the four plant managers on what measures to use.