MZUMBE UNIVERSITY

DAR ES SALAAM CAMPUS COLLEGE

MASTER OF LEADERSHIP AND MANAGEMENT 2023/24

NATURE OF WORK: INDIVIDUAL ASSIGNMENT

COURSE LECTURER: PROF. FEISAL ISSA

COURSE TITLE: STRATEGIC MANAGEMENT

COURSE CODE: PUB 570

SUBMISSION: 27TH MAY 2024

STUDENT NAME: ALLAN DAVID MKANTA

REGISTRATION NO: 31428033/T.23

QUESTIONS:
1. Show how a balanced scorecard transforms your organization’s (or an organization you
are familiar with), strategic plan from a passive document into the "marching orders" for
that organization.

Two weeks before self-study week

Balance scorecard is a management system that enables organizations to translate the vision and
strategy into action, this system provides feedback on internal business processes and external
outcomes to continually improve organizational performance and results. It is an approach
created by Robert Kaplan and David Norton in the early 1990’s. This approach was developed
due to the belief that the financial measures of performance were ineffective for modern
business. The balanced scorecard as an enabler and measurement system it is organized through
four different perspectives which are the following, which facilitate the transformation of an
organizations strategic plan into marching orders or actions displayed on a daily basis

The learning perspective, this refers to achieve our vision, how will we sustain our ability to
change and improve? Includes employee training and organizational attitudes related to both
employee and organizational development, examples of this perspective include the amount of
revenue that comes from new ideas and measures of the types and lengths of time spent training
staff

The Internal perspective, this refers to satisfy our shareholders and customers, what business
processes must we excel at? The internal business processes that are often classified as mission
oriented and support oriented. Examples of this perspective include the length of time spent
prospecting and the amount of rework required

The financial perspective, this entails that to succeed financially, how should we appear to our
shareholders? Examples of this perspective include financial ratios and various cash flow
measures

The customer perspective, this entails that to achieve our vision, how should we appear to our
customers? Examples of this perspective include the amount of time, quality, performance,
service and cost

In order to show how balance scorecard transforms an organization’s strategic plan from a
passive document to marching orders, I will use Samsung Electronics Ltd formerly known as
Samsung Electric Industries found in South Korea 1969, a multinational national major
appliance and consumer Electronics Corporation with known products such as Samsung Galaxy
S23, Curved UHD TV, Samsung gear fit and many more, headquartered in Yeongtong-gu,
Suwon, South Korea. In order to show the transformation on how Samsung Electronics has
incorporated or implemented the balance scorecard so as to transform their innovation strategy
into reality and measure the performance and improve overall results, the following four
perspectives provide detailed information on how Samsung Electronics implements the balance
scorecard in its business operations

Customer Perspective

Customer perspective describes how a company intends to attract, retain and deepen
relationships with the targeted customers by differentiating itself from competitors. In Samsung’s
balance scorecard the customer perspective serves one objective which is accessibility to new
innovative products. This reflects the heart of the strategy because it contains specific measures
for the strategy’s scope on how the company is performing with its targeted customers. It
represents the strategic advantage which is the unique combination of product features, services
and relationships it has selected to satisfy its customer’s needs better than competitors. The
following are the measures taken by Samsung to ensure the accessibility to new innovative
products

a) Leading focus groups

In leading focus groups Samsung uses them to understand more about how the customer reacts
when they get their new products due to the focus groups being demographically diverse by
including different groups of people who are assembled to participate in a guided discussion
about a particular product before it’s launched to the public with the help of a skillful discussion
moderator

b) Customer surveying and reviews to combat lagging

As a lagging measure Samsung uses customer surveys to understand more about its customers
because customer satisfaction is essential to the survival of the business due to it helps Samsung
understand the customer likes, dislikes, and areas that need improvement. Also Samsung has
used survey to figure out why a client stopped doing business with them and on how to win them
back and how it can prevent losing customers in the future
 c) Customer retention

Due to the reality of the hardship in trying to attract new customers which is difficult and
expensive, this means that you have to keep and maintain everyone you get because customer
retention refers to what you do to keep or retain customers and Samsung does this through a
form of loyalty program by excellent customer service or regular contact from a representative or
only from a sample of a population. The customer retention statistics are typically expressed as a
percentage of long term clients which are important to the business since satisfied customers tend
to spend more, cost less and make valuable preferences to new potential customers

The customer perspective of Samsung’s balance scorecard focuses on improving the customer
satisfaction level to get or increase more loyal customers, where as the customer perspective is
an important factor that leads to the improvement in the financial perspective objectives that lead
to the growth in profit and revenue which determine the success of the company

Internal Perspective

In the internal business processes perspective executives identify the critical internal processes in
which the organization must excel, these processes enable the business unit to deliver the value
propositions that will attract and retain customers in targeted market segments and satisfy
shareholder expectations with excellent financial returns. In Samsung their internal perspective is
more focused on all activities and processes involved in production within the company in order
to maintain outcomes for customers. The following are the objectives of Samsung’s internal
perspective

a) Quality control

Samsung is a worldwide known brand with over more than a million customers globally and in
that point of view Samsung ensures a level of quality products by testing and examining the
quality of products. By doing so Samsung ensures the products that are provided meet specific
requirements and characteristics such as being dependable, safe and satisfactory
 b) Speed to market

Samsung understands the importance of market and in this objective, Samsung injects new
innovations products which enables them to gain a competitive advantage over their competitors
by providing products with more advanced technology which gain customer approval and the use
of commercialization makes the business industry grow that is why, In 2014 Samsung became
the first consumer electronics partner to make a deal with the football association by becoming
the official supplier of products for the England team Chelsea by providing their products to
them throughout the world cup tournament (Joseph, 2014). This is because customers rely on
commercialization

c) Marketing

Marketing is an important way to increase customers and in the internal perspective it means that
revenue will be increased as well. Samsung performed a market research in order to compete
with other technology companies for example before producing the Smartphone, Samsung made
a research they found through the market that Asian language speakers in particular wanted a
device that they could hand-write on because drawing characters is easier with a pen and the
result was a combination of phone/tablet that has been unexpected hit

d) Manufacturing cycle time

As a lagging measure, Samsung uses manufacturing cycle time to measure the productivity as
well as the quality of the product. In order to raise the quality and manage manufacturing time it
only requires one period of time in order to complete one cycle of production

So through the internal perspective of Samsung’s balance scorecard they are able to improve and
transform Samsung electronics by focusing on all activities and key processes that enable a
company to excel at providing value expected by the customers, because at Samsung the believe
that the internal processes are indicators that management intervention is possible and it can
easily affect the customer and financial outcomes
Financial Perspective

Financial performance measures indicate whether a company’s strategy, implementation and

execution are contributing to bottom line improvement by asking questions such as “To succeed
financially, how should we appear to our shareholders?. Samsung Electronics’ financial
perspective emphasizes the stakeholder concern about how efficient and effective the unit is at
using its resources. Its balanced scorecard serves one objective which is maximize return to
shareholders and in order to that the company will have to actively pursue increases in
investment return for shareholders by maximizing profits through transparent and sound
management. In increasing shareholder value Samsung tends to improve its productivity and
revenue growth in the following

a) High earnings results by strengthening competitiveness

By developing and expanding market leadership through products such as Smartphone’s,

Televisions, cameras, refrigerators and so on, Samsung has been able to enhance revenue and
gain a competitive advantage over its competitor by providing high quality products that appeal
to the customer satisfaction at affordable prices when compared to its competitors such as apple

b) Developing key competitive advantages

In response to the current developments in the information technology industry, Samsung has
focused on enhancing the research and development capabilities by increasing personnel and
revamping the organization structure. They have expanded partnership with research institutions
by establishing an open innovation system

c) Increasing profitability

In the financial perspective, Samsung is focused in increasing profitability through enhanced

business competitiveness and sound business management. Not only that but Samsung aims to
solidify its leadership in Information Technology and also improving efficiency of the company
wide resource management including investment and continued efforts to enhance global
capability
 d) Risk management capability and future competitiveness for sustainable growth

In order for Samsung to sustain its growth momentum in the long term, it has taken key measures
to adapt an ability to make quick responses to uncertainties and risks in the business environment
and by employing preventive measures

In order to achieve the mentioned objectives in the financial perspective, Samsung aims to use
the following measures

a) Leading the Internal Rate of Return

IRR is used to compare capital projects. Suppose that Samsung is willing to invest in a new
plant project. The choice is whether Samsung should invest in a new plant project or
expansion in the old plant project

b) Return On Invested Capital and Weighted Average Cost of Capital

Samsung is better at using ROIC calculation to determine its efficiency at allocating the
capital under its control to profitable investments. Comparing its ROIC and WACC reveals
whether invested capital was used efficiently

c) Return On Investment

Nothing attracts shareholders like return on investments, because the calculation is

maintained in order to create more value to shareholders

Therefore financial perspective is one perspective used by Samsung to maintain the value of the
company to the shareholders by translating the strategic plan into marching orders by explaining
on how effective and efficient the company can perform and in order to maintain the shareholder
value, Samsung has invested more capital in product research and development as process of
creating the value to earn more money

Learning and Growth Perspective

In Samsung’s balanced scorecard, learning and growth identify the infrastructure that the
organization must build to create long term growth and improvement. Due to the current and
ongoing developments businesses are unlikely to be able to meet their long term targets using
today’s technologies and capabilities, also the intense global competition requires that companies
continually improve their capabilities for delivering value to customers and shareholders. In
Samsungs balance scorecard the learning and growth perspective serves the following objectives
in order to bring transformation and improvement through the balanced scorecard

a) Research and development

Samsung is a large company manufacturing many technological products, it is known as a large

gadget and electronics manufacturer which requires the technology used and developed to be
improved in an ongoing basis therefore the research and development helps to improve the
intangible features of the company such as information technology needs to be updated and the
company has to keep developing new technologies and knowledge all the time and the human
resource are encouraged to keep learning and developing their skills. Therefore Samsung’s
learning and growth perspective facilitates research and development in order to keep its
competitive advantage in the information technology industry

b) New market entry

The learning and growth perspective also identifies many ways and solutions for Samsung to
anticipate the competitors and also identifies many ways for the company to enter a new market.
As Samsung attempts to enter a new market it needs more strategy and it requires strategy to
ensure that the market keeps growing and to anticipate situations in the new market it wants to
enter. To achieve new market entry Samsung identifies the environment of the new market it
intends to enter and it also improves the processes required by the new market

c) Identification of the current corporate culture

As explained through research and development, the identification of the current corporate
culture is done through the learning and growth perspective which enables Samsung to identify
the current corporate culture which determines how high the company’s objectives were
achieved after attaining the determined values and accomplishing objectives
 d) Benchmarking

As a lagging measure Samsung uses benchmarking in order to ensure the learning and growth
perspective objectives are met, because through benchmarking they are able to identify and
measure competitiveness in the industry because they can compare the effectiveness and
efficiency of the business operation with competitors. Samsung then prepares a benchmarking
report using the data and information gathered by departments which consist of data against the
industry and competitors within it.

In the learning and growth perspective of Samsung’s balanced scorecard it focuses on improving
the intangible assets of Samsung and also the skills of its human resources to achieve the
company’s objectives which are important factors that determine the success of the company and
the effectiveness and efficiency of the company’s performance

In conclusion, through the use of Samsung Electronics Ltd balanced scorecard were able to see
on how they were able to transform their innovation strategy from a passive document and into
implementation through the four perspectives of the balance scorecard which show in detail how
they are able to transform their organization into a leading business in consumer electronics. In
efforts to provide detailed information I have included a diagram of the process of Samsung’s
balanced scorecard with details that describe the whole process involved from strategy to
marching orders
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