Design and Development of a Third Generation Balanced Scorecard
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Journal of Multidisciplinary Engineering Science Studies (JMESS) ISSN: 2458-925X Vol. 6 Issue 11, November - 2020 Design and development of a Third Generation Balanced Scorecard Prototype that facilitates strategic implementation in automotive organizations Braulio López Morales1 Dr. Roberto Baeza Serrato1 University of Guanajuato, Multidisciplinary Studies University of Guanajuato, Multidisciplinary Studies Department Department Guanajuato, México. Guanajuato, México. [email protected] [email protected] Abstract — The present document aims to Currently, the growth of this sector continues to rise, design and develop a Third Generation Balanced integrating new countries in automotive production, Scorecard (BSC) prototype with the purpose of while trends in this market are constantly changing. facilitate the planning, execution and monitoring Following this scheme of accelerated changes in a of an organizational strategy through the use of highly globalized industry such as the automotive visual elements that speed up the reading of sector, the emergence of an important aspect for the performance in the strategic execution, therefore development of the sector is predicted according to [3], is integrated into BSC: a strategic map with the related with the migration of automotive propulsive causal relationship among objectives and methods, becoming indispensable the avant-garde of destination statements, preserving the 4 original the organizations to remain competitive in the sector, perspectives of the BSC, responsible positions requiring in some cases an internal restructuring to and graphics that allow monitoring the gradual adapt to the new market trends. progress of the goals. Thus, it contributes to the implementation of a strategy within the Based on the growth of these markets and their automotive sector and to the simplification of the competitiveness, is crucial for companies to evaluate use of this tool. For the development of the their structure and indicators for the purpose of their application, key approaches and indicators are development [4], fostering an increase in the migration identified with the objective of provide clear and of traditional quality initiatives to the BSC initiative such timely information in decision-making. The final as a system to improve the business operations and result consists of a control panel that contains their performance [5]. five destination statements supported by ten Normally, within organizations there are already strategic objectives with their own indicators, with predefined control methods; elements and the purpose of consummating a strategy related mechanisms that contribute to monitoring their with the expansion brand and markets satisfaction performance and carrying out different activities and / through the production of high quality products. or decision-making. However, the fact of their Keywords — balanced scorecard; third existence does not guarantee that they are strategically aligned to contribute to the organizational generation; automotive industry; strategy vision, which often ends up being translated into a lack I. INTRODUCTION of use of the resources and efforts made. Named as the biggest engine of economic growth As the automotive sector is a field governed by in the world by [1], the automotive industry stands out various international regulations, and even by specific not only at global level but also locally, representing an requirements of the various leading alliances in the important pillar for the economies of the different sector, according to [6] the pressure exerted by these countries that host companies of this type, because as regulations influences the structures and practices of mentioned [2] this kind of industries play an important companies, generating a similar operative mechanism role in the socio-economic development for these among the organizations that integrate this sector, countries. owing to complying with these guidelines becomes a Mexico is not the exception, nowadays is listed competitive requirement of the market. among the top ten worldwide positions of the countries Under these global guidelines, is standardized the with the highest rate of manufacture and exportation of introduction of various objectives and indicators vehicles, according to OICA data in 2020, this industry throughout its production chains and its agents contributes 3.8% of the Mexican Domestic Product involved in order to comply with the strategies. All Gross (according to AMIA data), that shares the top these sources of valuable information must be positions with countries such as the United States, integrated and properly aligned for efficient decision China, Canada, Japan, Thailand, India, among others. making. Being then when the BSC tool appears, www.jmess.org JMESSP13420692 3574 Journal of Multidisciplinary Engineering Science Studies (JMESS) ISSN: 2458-925X Vol. 6 Issue 11, November - 2020 because as mentioned in [7] the Balanced Scorecard their consideration achieve the establishment of lines achieves through the integration of a set of to follow (destination statements). methodologies, qualitative and quantitative mechanisms to support the design of the processes, in Based on the destination statements that act as order to implement the organizational strategy. guide lines to achieve the purposes of the organization, it is necessary traduce them in related There are several generations and variants of this goals and objectives that allow us to align efforts, a tool, the BSC in its third generation is a refined and sample of how important the relationship of the mostly robust version, with respect to its previous objectives is, can be found in the work of [4], who in generations, which according to [8], becomes in a 2006, addressing the logistics area in a company of reference point for the designation of objectives the automotive sector, analyze the existing objectives through the establishment of destination statements, and processes to redesign and align them with the increasing the efficiency in the development of the organization's strategy through the use of a BSC, strategy. promoting an information framework for more efficient decision making, reducing failed decision making and For these reasons and due to the importance of the highlighting the areas of opportunity for each correct execution of the strategy for business entities, perspective. Therefore, considering the impact that we start from the literature review extracting the has the alignment of the objectives, within the fundamental elements contained in a third generation prototype presented has been reserved a space to Balanced Scorecard and the main contributions of define the relationships between our statements and previous generations, with the purpose to design a their objectives, identifying thereby the activities that is robust prototype that allows planning, executing and necessary to monitor to achieve our statements. monitoring the implementation of a strategy addressing Once this relational aspect is assured, it is essential the generic case of an organization in the automotive to prioritize the objectives that we will integrate into our industry. Given the competitiveness mentioned above BSC, the importance of this prioritization is denoted in and the market dynamics, the planning and execution studies cases such as [12], who adds to the of a growth line is essential for the prevalence of application of a BSC in an industry of the sector organizations. automotive, a Fuzzy AHP system to identify the performance indicators of an organization in all its II. STATE OF THE ART perspectives, which contribute most to decision- Carrying out a literature review related to the making and allow the generation of proposals for the execution of BSC as a tool to contribute to the strategy improvement of the key organization’s processes. This implementation, multiple research cases are noted due is not the only case in which efforts have been made to to its potential in improving organizational performance establish a framework of key indicators aligned with and its universal applicability [9]. the strategy for obtaining robust information, since in a Malaysian automotive industry, [5] in 2012, the BSC is Various authors have adopted and implemented used to develop a strategic measurement model with the BSC to contribute to a better implementation of the key indicators that assist in the improvement of strategy, such is the case of [10] who achieved to organizational development and promote the creation generate an inclusive framework including the of internal initiatives for better performance. These perspectives proposed by the BSC, to identify cases represent a clear example of the necessity to opportunities and threats, contributing thus in the integrate action initiatives that can be evaluated and selection of an appropriate strategy that will contribute are designed to contribute in the achievement of the to the development of export markets for auto parts in key objectives and therefore to reach the statements Iran. Thus, he complemented the use of this tool with raised at the beginning, a fundamental element others, such as Dynamic Systems and Game Theories considered within this prototype , since it is necessary to predict the behavior of the markets, denoting in this to involve all the members of the organization defining case with respect to this document, the importance of their support lines for the achievement of the strategy. the inclusion of all dimensions