Balanced Scorecard at Philips
During the late 1990s the external environment was fast changing and Philips needed to quickly respond to the changes.
However the existing organizational structure at Philips did not support any kind of change .
The cost of manufacturing had increased in Western Europe, which was Philips major market and growing competition from companies like LG and Samsung was eating into profits .
This made Philips realize that its operations needed to be more flexible, innovative and value adding .
The company decided to reorganize and reduce the number of business units and encouraged different business units to work together .
All these measures to transform Philips formed the foundation of Business Excellence programs in the company.
The Corporate Quality Department guided the company toward achieving business excellence by giving necessary inputs and infrastructure .
In order to achieve this it introduced a program called the BEST.
BEST focused on business priorities, increasing the capability of business process and bringing in better team work.
Under this program quality became a crucial function through which Philips managed its business and implemented its strategies .
To transform the vision of the company into reality, Philips used three tools, which were Balanced Scorecard, policy deployment and customer satisfaction management .
Using balanced scorecard Philips encouraged at communicating the company’s vision and strategy to the employees and letting them know their role in realizing the mission
Policy deployment was used to translate top level targets into operational targets in the organization
Philips encourages constant communication and dialogue between all management levels in order to achieve a consensus on the targets and better understanding between the top management and employees responsible for converting strategy in action
Through customer satisfaction management, Philips aimed at making the voice of the customer heard all through the organization and to convert the customer complaints into opportunities by acting on them and giving customers newer and better products .
Philips believed that by doing so brand loyalty will be built.
During the late 1990s the external environment was fast changing and Philips needed to quickly respond to the changes.
However the existing organizational structure at Philips did not support any kind of change .
The cost of manufacturing had increased in Western Europe, which was Philips major market and growing competition from companies like LG and Samsung was eating into profits .
This made Philips realize that its operations needed to be more flexible, innovative and value adding .
The company decided to reorganize and reduce the number of business units and encouraged different business units to work together .
All these measures to transform Philips formed the foundation of Business Excellence programs in the company.
The Corporate Quality Department guided the company toward achieving business excellence by giving necessary inputs and infrastructure .
In order to achieve this it introduced a program called the BEST.
BEST focused on business priorities, increasing the capability of business process and bringing in better team work.
Under this program quality became a crucial function through which Philips managed its business and implemented its strategies .
To transform the vision of the company into reality, Philips used three tools, which were Balanced Scorecard, policy deployment and customer satisfaction management .
Using balanced scorecard Philips encouraged at communicating the company’s vision and strategy to the employees and letting them know their role in realizing the mission
Policy deployment was used to translate top level targets into operational targets in the organization
Philips encourages constant communication and dialogue between all management levels in order to achieve a consensus on the targets and better understanding between the top management and employees responsible for converting strategy in action
Through customer satisfaction management, Philips aimed at making the voice of the customer heard all through the organization and to convert the customer complaints into opportunities by acting on them and giving customers newer and better products .
Philips believed that by doing so brand loyalty will be built.