Models of Organizational Performance
This paper focuses on the two models of organizational performance, which are known as balanced scorecard and value profit chain.
A balanced scorecard is based on a factitious division of the organization into four major perspectives. These include learning and growth perspective, business process perspective, financial perspective and customer perspective (Niven, 2006).
In its turn, value profit chain provides for a relationship between profitability, customer loyalty, productivity, and employees’ satisfaction. According to this model, profit and growth are stimulated by the loyalty of customers, which comes directly from their satisfaction. At the same time, value is created by a productive, loyal and satisfied employee. Non-compliance with these conditions results in policies, the purpose of which is ensuring high quality production, and support services that enable better services for customers.
Value profit chain is a based on a cause-and-effect relationship between internal and external environment. For instance, employees who are part of the internal environment drive loyalty and customers’ satisfaction within an organization. Key performance measures, used by an organization in a value profit chain, include leadership, employees’ loyalty and satisfaction, external service value, and employees’ productivity (Pan, 2005). On the other hand, balanced scorecard focuses on business processes, customers, finance, and growth.
Both models aim at improving performance of the enterprise. In both cases employees are considered important stakeholders in providing organizational productivity. In fact, a lot of attention is paid to the staff because it ensures success or failure of a company. Both models can be used for long-time as well as short-term business processes.
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Niven, P. R. (2006). Balanced scorecard step-by-step: Maximizing performance and maintaining results. Hoboken, New Jersey: Wiley.
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Pan, E. T.-S. (2005). Perpetual business machines: Principles of success for technical professionals. Fremont, Calif: Meridian Deployment Corp.