Scribd
Upload
53 views4 pages

Balanced Score Card:: Performance Management

The balanced scorecard is a strategic performance management tool that allows managers to track activities of staff and monitor consequences. It aligns business activities to organizational vision/strategy and monitors performance against goals. A balanced scorecard defines management's view of performance and measures if desired results are achieved by translating mission/vision into quantifiable objectives and measures across financial, customer, internal processes, innovation, and employee categories. Target costing is a cost management tool used by firms to reduce product costs over the lifecycle to meet customer demands and profit goals. It involves setting a target cost by subtracting the desired profit margin from the competitive market price to guide product design and development. Total quality management is a management approach focusing on long

Uploaded by

tappu0410
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
53 views4 pages

Balanced Score Card:: Performance Management

The balanced scorecard is a strategic performance management tool that allows managers to track activities of staff and monitor consequences. It aligns business activities to organizational vision/strategy and monitors performance against goals. A balanced scorecard defines management's view of performance and measures if desired results are achieved by translating mission/vision into quantifiable objectives and measures across financial, customer, internal processes, innovation, and employee categories. Target costing is a cost management tool used by firms to reduce product costs over the lifecycle to meet customer demands and profit goals. It involves setting a target cost by subtracting the desired profit margin from the competitive market price to guide product design and development. Total quality management is a management approach focusing on long

Uploaded by

tappu0410
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

BALANCED SCORE CARD:

The balanced scorecard (BSC) is a strategic performance management tool - a semi-standard


structured report supported by proven design methods and automation tools that can be used by
managers to keep track of the execution of activities by staff within their control and monitor the
consequences arising from these actions.

The balanced scorecard is a strategic planning and management system that is used extensively
in business and industry, government, and nonprofit organizations worldwide to align business
activities to the vision and strategy of the organization, improve internal and external
communications, and monitor organization performance against strategic goals. 

A Balanced Scorecard defines what management means by "performance" and measures whether
management is achieving desired results. The Balanced Scorecard translates Mission and Vision
Statements into a comprehensive set of objectives and performance measures that can be
quantified and appraised. These measures typically include the following categories of
performance:

 Financial performance (revenues, earnings, return on capital, cash flow);


 Customer value performance (market share, customer satisfaction measures, customer
loyalty);
 Internal business process performance (productivity rates, quality measures, timeliness);
 Innovation performance (percent of revenue from new products, employee suggestions,
rate of improvement index);
 Employee performance (morale, knowledge, turnover, use of best demonstrated
practices).

A Balanced Scorecard is used to:

 Clarify or update a business's strategy;


 Link strategic objectives to long-term targets and annual budgets;
 Track the key elements of the business strategy;
 Incorporate strategic objectives into resource allocation processes;
 Facilitate organizational change;
 Compare performance of geographically diverse business units;
 Increase companywide understanding of the corporate vision and strategy
TARGET COSTING:
Target costing is defined as a cost management tool for reducing the overall cost of a product over its
product life cycle.  Management utilizes this pricing technique to meet both the demands of its
customers as well as company profit goals.

Target costing is a pricing method used by firms. It is defined as "a cost management tool for reducing
the overall cost of a product over its entire life-cycle with the help of production, engineering, research
and design". A target cost is the maximum amount of cost that can be incurred on a product and with it
the firm can still earn the required profit margin from that product at a particular selling price.

In the traditional cost-plus pricing method materials, labor and overhead costs are measured and a
desired profit is added to determine the selling price.

Target costing involves setting a target cost by subtracting a desired profit margin from a competitive
market price.[1] [2]

A lengthy but complete definition is "Target Costing is a disciplined process for determining and achieving
a full-stream cost at which a proposed product with specified functionality, performance, and quality must
be produced in order to generate the desired profitability at the product’s anticipated selling price over a
specified period of time in the future." [3]

This definition encompasses the principal concepts: products should be based on an accurate
assessment of the wants and needs of customers in different market segments, and cost targets should
be what result after a sustainable profit margin is subtracted from what customers are willing to pay at the
time of product introduction and afterwards. These concepts are supported by the four basic steps of
Target Costing: (1) Define the Product (2) Set the Price and Cost Targets (3) Achieve the Targets (4)
Maintain Competitive Costs.

To compete effectively, organizations must continually redesign their products ( or services) in order to
shorten product life cycles. The planning, development and design stage of a product is therefore critical
to an organization's cost management process. Considering possible cost reduction at this stage of a
product's life cycle (rather than during the production process) is now one of the most important issues
facing management accountants in industry.
TOTAL QUALITY MANAGEMENT:

Total Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed
customer expectations. This can be achieved by integrating all quality-related functions and processes throughout the company.
TQM looks at the overall quality measures used by a company including managing quality design and development, quality
control and maintenance, quality improvement, and quality assurance. TQM takes into account all quality measures taken at all
levels and involving all company employees.

TQM can be defined as the management of initiatives and procedures that are aimed at achieving the delivery of quality products
and services. A number of key principles can be identified in defining TQM, including:

 Executive Management – Top management should act as the main driver for TQM and create an environment that
ensures its success.
 Training – Employees should receive regular training on the methods and concepts of quality.

 Customer Focus – Improvements in quality should improve customer satisfaction.


 Decision Making – Quality decisions should be made based on measurements.
 Methodology and Tools – Use of appropriate methodology and tools ensures that non-conformances are identified,
measured and responded to consistently.
 Continuous Improvement – Companies should continuously work towards improving manufacturing and quality
procedures.
 Company Culture – The culture of the company should aim at developing employees ability to work together to
improve quality.
 Employee Involvement – Employees should be encouraged to be pro-active in identifying and addressing quality
related problems.

TQM is a set of management practices throughout the organization, geared to ensure the
organization consistently meets or exceeds customer requirements. TQM places strong focus
on process measurement and controls as means of continuous improvement.

At its core, Total Quality Management (TQM) is a management approach to long-term success through
customer satisfaction.

In a TQM effort, all members of an organization participate in improving processes, products, services and
the culture in which they work.

The methods for implementing this approach come from the teachings of such quality leaders as Philip B.
Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa and Joseph M. Juran.

A core concept in implementing TQM is Deming’s 14 points, a set of management practices to help
companies increase their quality and productivity:

1. Create constancy of purpose for improving products and services.


2. Adopt the new philosophy.
3. Cease dependence on inspection to achieve quality.
4. End the practice of awarding business on price alone; instead, minimize total cost by working with a
single supplier.
5. Improve constantly and forever every process for planning, production and service.
6. Institute training on the job.
7. Adopt and institute leadership.
8. Drive out fear.
9. Break down barriers between staff areas.
10. Eliminate slogans, exhortations and targets for the workforce.
11. Eliminate numerical quotas for the workforce and numerical goals for management.
12. Remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit
system.
13. Institute a vigorous program of education and self-improvement for everyone.
14. Put everybody in the company to work accomplishing the transformation.

COST AUDIT:

he verification of cost records and accounts, and a check on adherence to prescribed cost
accounting procedures and their continuing relevance

You might also like