Linking strategy into operational management

Abstract

PurposeThe purpose of this paper is to find a means of connecting strategic management and operative performance measurement.Design/methodology/approachThe paper focuses on the balanced scorecard (BSC), its levels of use and utilization, the influence of specific features, the most used metrics and features of successful implementation of the BSC in the energy sector. The paper is based on empirical interviews with 16 locally operating energy companies and business units of larger corporations. BSC is a wide spread strategic management system which originated in the early 1990s. The aim of the BSC is to facilitate in depth discussion about a company's vision, strategy and critical success factors and translate them into specific measures and objectives in action.FindingsThe study shows that maintaining a vision and a strategy has not been very prevalent in Finnish electricity companies. However, the deregulation of the energy markets in Finland, from the mid‐1990s, has increased the competition and made maintaining a strategy all the more important. Adjustment to this deregulation and the large number of different businesses are special features of the electricity sector. It can be concluded that benchmarking on other industries, where BSC has been in use, leads to better results faster in the energy sector. However, it has to be noted that strategy and management have to be seen as a unique set of activities. In the construction phase of the BSC, the process of searching for the metrics is more important than finding them.Originality/valueThe paper offers insights into linking strategy into operational management.

Successful Performance Measurement in SMEs through Personnel Participation

“…According to [20,21], one should not accept the performance indicators as given, but the usefulness of each individual indicator ought to be assessed individually. In addition, the performance measurement system development processes are seen important to tailor according to company specific needs.…”

“…Fundamentally, balanced scorecard is seen to be more a monitoring than a development tool. It is also emphasised that the object of measurement described in the balanced scorecard should not be accepted as they are, but the applicability of each indicator ought to be considered individually to be suitable for each company's vision and strategy [20,21].…”

“…One of the potential weaknesses of balances scorecard is seen it being originally developed for the needs of large North American companies, where the organisational culture and working environment are somewhat different than those of European and Asian Companies [21,27].…”

The Balanced Scorecard: A Strategic Management Tool for Ranchers

“…6 The process illustrated in Figure 1 might appear to be a defi ned and formal process but in practice it can be haphazard and informal. 7 The key words describing strategic management are summarized below: 8 Continuous: the plan is not the fi nal product Systematic: the process has a deliberate and specifi c methodology and sequence of events Process: the value of planning lies more in the journey than the destination, and from teamwork, vision, and commitment gained through the process People: the process must involve the right people Decisions: decisions must be made; as a result "decisionmaking is the most signifi cant activity engaged in by managers" 3 Outcomes: the effects of the business on its customers and the outside world How outcomes are to be accomplished: selecting the right road How success is measured and evaluated: the plan will describe intended future outcomes either quantitatively or qualitatively, and it always defi nes criteria for success In a larger organization it is expected that leadership is delivered by the CEO and the Board of Directors, management is delegated to the senior and middle managers, and operational issues are delegated to staff at the "coalface." In smaller companies such distinctions, although still relevant, can be lost.…”

Conception of Providing the Operational Development in the Functioning Process of Innovatively Oriented Enterprises

“…Scientists conduct studies as to searching for ways of combining strategic management and operational measurement of productivity, revelation of interconnections of strategies with operational management [1], elaborate a model of integrated planning that includes not only strategic, but also project-oriented and operational planning with the strategic, tactic and operational feedback in the cybernetic outline of management of an enterprise [2]. Scientists investigate the flexibility of an enterprise at the operational level, because under conditions of continuous changes of the external environment, structure and management of all components of production systems, transformations must be realized fast and with minimal efforts [3] and ground operational management, oriented on a strategy, discover peculiarities of strategic, tactic and operational management of an industrial enterprise [4].…”