Balanced Score Card

Discussion Thread: Balanced Score card
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1 The material in this module tells us that many companies place disproportionate emphasis on the financial perspective at the expense of the other three perspectives. Give an example of an organization with which you are familiar from either previous coursework, the news, or personal experience where this has been the case. What were the results of this focus on the financial perspective on customers and other stakeholders? Be as specific as you can and give concrete examples.  
ANSWER
The Balanced score Card is a Planning and Management system designed by Robert Kaplan and David Norton. The balanced score card helps organizations have an overall view of their performance by combining financial and non-financial measures. Over emphasis on the financial perspective leads to neglect of the other equally important perspectives which may in turn lead to poor overall performance of the organization (Kaplan & Norton, 1996). The case study of JetBlue during the February 2007 storm illustrates that a single event of customer dissatisfaction in an attempt to save cost may have immediate negative effects even to a company that seems to be doing well.
David Neelman launched JetBlue as a low fare offering airline. The main aim of the launch was to add dignity to low fare travelling. JetBlue unlike other low fare airlines offers seats with more than enough room, wide aisles and personal television seats for each seat. JetBlue attract customers who would otherwise not use low fare airlines because of good customer service (Wynbrandt, 2004).
JetBlue realized just how important customer satisfaction is during a
storm in February 2007, that led to delay of flights and the shutdown of airports on the East coast. The ice storm was out of the company’s control, the company however had an obligation to ensure the comfort and safety of the stranded customers and they failed to do so. The result of the customer’s frustration was immediate, the company’s market capitalization fell by more than $100M just after the crisis. The cost of refunding fares and lost revenue would have been only $30 M far less than their loss. This was a defining moment for them and they decided to launch a better service recovery initiative and rebuild their reputation. The company’s management had to make great changes to prevent such an event from happening again (Zentler, 2007).
While JetBlue recognized the importance of good customer service, they were not aware of the potential cost of customer dissatisfaction. Unhappy customers will seek business elsewhere. Lose of customers leads to decrease in sales that will eventually translate to poor financial performance.
1 Can you think of any organizations that do not have relevant "customers" to take into consideration? If there are such, how are they different from other organizations where all parts of the BSC operate equally?
ANSWER
Most profit making organizations know exactly who their customers are. For Nonprofit organizations however, it is not so clear who their customers are. To develop an effective strategy organizations need to know who their cus...