The scorecard measures Between Toyota&Peugeot Essay

The scorecard measures Between Toyota&Peugeot - Essay Example The organizational profits but also the response of the customers to a firm’s strategic decisions indicate the ability of the organization to identify plans that are aligned with the market trends. The role of various factors in a firm’s performance has been extensively studied in the context of management accounting. A series of management accounting techniques has been developed in order to help firms to measure their performance, either in the short or the long term. Current paper focuses on the potential use of Balanced Scorecard, an accounting technique developed in 1990 by Kaplan and Norton, for measuring the performance of a well known, organization: Toyota. Reference is made to potential scorecard measures under each of the four headings of the balanced scorecard that could be applied to Toyota. At the next level, two alternative strategic management techniques are suggested for another well-known firm of the global automotive industry, Peugeot, at the level tha t these techniques could possibly help the organization to measure its performance more effectively. The performance of both, Toyota and Peugeot, is compared with reference to these firms’ potential to apply effectively their strategies. Peugeot is more prepared in order to face the challenges of the global market, a fact that is related to the firm’s ability to avoid failures when measuring its performance. 2. Balanced scorecard as related to the just-in-time technique in Toyota The just-in-time technique used in Toyota is based on the following principle: waste must be controlled, as possible. For this reason, in Toyota efforts are made so that the following philosophy is applied: the volume of the firm’s products is decided in accordance with the level of the existing orders (Toyota, Production system, 2012). In order to be able to respond quickly to new orders, the firm promotes the following strategies: all parts required for the vehicle ordered are availab le in the assembly line, so that the production of the vehicle can proceed with no delay (Toyota Production system 2012). After using certain parts for producing a new vehicle, the assembly line has to replace these parts so that its stock is kept at a specific level, a fact that secures the readiness of the firm’s production units to respond quickly to new orders (Toyota Production system 2012). The above technique could be analyzed using the Balanced Scorecard (Figure 1, Appendix). The Balanced Scorecard is consisted from four parts: ‘Customer, Internal Processes, Employee Learning and Growth and Financial’ (Niven 2006, p.13). A series of potential scorecard measures under each of the four headings of the balanced scorecard as they could apply to Toyota are presented below. 2.1. Customer The relationship between the firm and its customers has faced severe challenges the last decade mostly because the continuous failures in the firm’s products. It is expe cted that customers’ loyalty has been decreased, a problem that should be faced by the organization with no delay. A measure should be developed by the organization for estimating the level of customer loyalty and the level of customer satisfaction in regard to the firm’s products worldwide. The firm would initiate a survey among its customers worldwide; the views of the firm’s existing customers on the quality of the firm’