Saatchi Saatchi is a very creative organization, the company in the mid of 1990 the company faced bankruptcy, even though the company was growing through acquisitions in the past two decades. Before introducing the balanced scorecard Saatchi Saatchi went through a complete strategy reformulation and structural changes when new personnels were appointed in the organization. With time the new CEO realized that the company needed a strategic management performance tool, hence the implementation of balanced scorecard in Saatchi Saatchi.
Before setting the goals the company did a financial health check of Saatchi Saatchi, to find out that which agencies of the company were making money and which were not. The goals that were set by the company in terms of financial perspective are as follows-
The need for an strategic management performance tool
Set three year financial goals
Growing revenue
To convert 30 percent of incremental revenue to operating profit
Doubling earning per share of the company
Analysis
When setting the goals Saatchi Saatchi decided to put its agencies (business units) into 3 categories. These categories are as follows-
Lead lead agencies are those agencies which are the largest agencies, these agencies employ more than 150 employees. UK, USA and China have been termed as the lead agencies. The strategies that were set for these agencies is that they are expected to grow and the large part of the investment of the company would be allocated to these agencies.
Drive a drive agency has 50 to 150 employees and the strategies that were created for this agency were that they asked to maintain or slightly increase their revenue base and were also asked to increase their profit margins as well.
Prosper a great deal of business units fall under this category. A prosper agency has less than 50 employees and these agencies have limited potential to grow or become gigantic units. The strategy that was created for this category was that the prosper agency is not expected to grow but were asked to generate high margins for the company.
Customer Perspective Strategies
Clients customers are very important to a company like Saatchi Saatchi. The company believes that the financial success of the company solely depends on client and that is the reason why the company pays close attention to its customer. The company had conducted an analysis and they found out that 20 to30 percent of Saatchi Saatchis client base made up 70 to 80 percent of the companys revenue. The strategies that were implemented by the company for their customers are as follows-
Focusing on clients that created large revenue earnings
Providing clients with excellent services
Need to pay close attention to the clients and their needs to that they become PICs (i.e. Permanent Infatuated Clients)
The agencies were asked to generate and implement BFIs (big fabulous ideas) not ideas but quality
Focusing on quality, so that it can transform brands, businesses and the reputation of their customers in their industries
Conclusion
Yes the financial perspective did make sense for each given agencies of Saatchi Saatchi. Why, because as we know that financial perspective can be defined as an increase in the profit margin of the company and it is important for the company to find out that which agency of the company is able to grow and which is not. And will these agencies be able to achieve the targets that have been set for them and the company. By following the strategies that had been implemented by the company, Saatchi Saatchi was able to achieve its Wall Street goals and it was all due balanced scorecard (BSC).
Saatchi Saatchi was purchased by Publicis Groupe SA, for somewhere around 2.5 billion in the year 2000. The acquisition of the company did not change any of the balanced scorecard (BSC) results, instead the company found out that it the company was worth five times of it market value and it also found out that with the contribution of balanced scorecard strategy Saatchi Saatchi was able to become a success and it helped the company to reach its set goals.
I believe that both the prongs of balanced scorecard (financial and customer perspective) were in a complete synthesis, because one without the other cannot work and if both the perspectives were in a conflict then the balanced scorecard would not have been a success and Saatchi Saatchi would not have been able to achieve its targeted gaols.
Evaluation
I believe that the financial perspective of the Saatchi Saatchi meshed perfectly with that of the customer perspectives of Saatchi Saatchi. Because the company found out that 20 to 30 percent of the customer base made 70 to 80 percent of the companys revenues altogether and therefore it most necessary that the financial and customer perspective of the balanced scorecard mesh together to achieve success.
Management is defined as the process of allocating resources and controlling activities within an organization so as to achieve the desired goals and objectives of the firm. It involves the activities of planning, organizing, directing, controlling, staffing and organizing all resources to achieve intended objectives. The success of any business depends on the management styles being employed. Good management enables an organization to accumulate wealth and to remain viable in a competitive market (Pidd, 2003).
New developments in management during last decade
Modern businesses have adopted the strategy of valuing the shareholders. The shareholders provide financial support to the organization. Businesses have adopted the strategy of attracting shareholders through increased interest, dividends and other benefits. The company must have adequate capital to finance its activities so as to remain competitive in the market (Witzel, 2003).
Development of information technology (IT). Organizations have adopted the modern technologies in management so as to keep an up-to-date technology. The use of modern machines in the companies is encouraged to create efficiency and effectiveness. Many organizations have developed Research and Development departments to research on the up coming technologies. Most modern businesses are entirely dependent on information technology. Changes in the market of IT can affect many companies. For an organization to overdo its competitors, it must embrace modern technology (Henderson, 1996).
Customer oriented management. The modern businesses are focusing on the customer as the main and most important aspect of the business. The customer is the buyer of the products of the company. The profitability of the business depends on the customer base and the loyalty that customers have towards the products of the company. Organizations have adopted the strategy of researching on customer needs so as to come up with customer oriented products. Market research has helped many organizations in developing products that display the taste of the customers (Witzel, 2003).
Risk management. The risk is a major component of the businesses. The risky the businesses, the higher the profits. The organization must do adequate analysis of the risks so as to avoid loss when the risk does not favor the company. Proper calculation of the risk before investing is very important. Organizations are employing personnel to research on the risks relating to ventures they are undertaking (Pidd, 2003).
Creative management. The organizations are allowing the employees to be creative in the management. Companies are avoiding bureaucracy in management so that workers can be creative. This strategy has made many organizations to come up with innovations in business. The employees should be set free to think and come up with new ideas. The managers should use this strategy to compete with competitors in a market which is dominated by the same product. Product differentiation is important in attracting new customers in a business since it creates a variety of products (Witzel, 2003).
Privatization. Public organizations are opting going private since the private sector has efficient management. Governments are involving the private sector in provision of many services. The management of public organizations has been deteriorating and this has caused the governments to adopt the strategy of privatization as a means of improving service delivery (Pidd, 2003).
Conclusion
Good management should be the main objective of the organization. The use of modern Management styles is essential to ensure the organization keeps up to date skills. The company must do research on the most recent management styles to ensure competitors do not overtake them.
Ladies and gentlemen, good morning (greet the audience with enthusiasm and a smile) I will be presenting on the needs of Compu Fix business and how I can contribute
Now (pause a bit) Compu fix provides computer and network repair service. In todays competitive environment it is just not enough to provide a good service... (Now in a louder tone) the aim is to provide customer satisfaction.
Now what are the implications of customer satisfaction Huh
Good quality service is now a precondition in the service business
Professional and courteous behavior of employees
Consistency in service
A low Response time
Conducting routine follow ups to enquire about service
The Aim
(an assistant should be directed to begin the power point presentation) The aim (gesture towards the audience) ladies and gentleman is to build TRUST. But what does trust really mean (pause here) It means do customers think of Compu Fix as reliable Dependable Do they perceive Compu Fix as consistent in providing good quality of service Do customers trust us with their problem
If customers have this trust (gesture with hands to emphasize the word trust) in our service they will become loyal customers that means repeat purchases it also means they will recommend us to others. So trust is crucial.
Secondly the aim is to do more than expected. (Now in a louder tone) To surprise the customer. If we can do this we can ensure customer satisfaction.
Now the question is (briefly pause here) how do we build this trust and at the same time try to do more than expected this is where I as an associate marketing manager can deliver.
The program
Second slide Market Research
(Keeping eye contact) Ladies and Gentlemen I now present my program to help meet the aims and challenges in providing customer satisfaction. (an assistant should now distribute handouts) (now moving on stage and taking a more relax posture) I also now invite you to raise your questions in between the presentation.
Research, Ladies and gentlemen, will be the first step. We will engage selected clients in focus group discussions. These discussions will enable us to understand customer needs, their expectations and their purchase decisions. The aim is get insight about customer behavior and beliefs. To understand what quality means is to the customer.
For this purpose surveys will be conducted routinely to assess performance of individual jobs. Now clients
often hesitate to give negative comments in front of employees. For this reason we will set up web based online surveys which will give greater privacy to the client. (Answer any questions raised by the audience take this opportunity to describe this part of the program in more detail)
Third Slide Employee Morale
The second part of my program focuses on employee morale. The most significant challenge is keeping employees motivated. At the end of the day it is the people who are delivering the service. Their motivation and their understanding can make the difference.
Building teams is an excellent way of motivating employees. Employees will work in empowered teams that will have great authority and responsibility. Compensation will be team based and linked to performance. This will also set in peer pressure towards performance.
In addition it is critical to increase employees awareness about quality aspects of service. Employee will be reminded quality is not how we define it but hot the customer defines it. Employees will have greater feedback on their job performance
Fourth slide Referral Programs
Ladies and gentlemen the aim is to provide such a good service that customers themselves recommend us to other businesses. (Pause briefly here) However, at the same time we will partner up with our clients to share with us THEIR INFORMATION about their suppliers, customers etc. We will then attempt at direct mail marketing with specific recommendations of our customers. This means that A will be shown the testimonial of As Supplier or A customers. This will give greater credibility to our direct marketing efforts.
At the same time we will link discounts to successful referrals. That is we will give our existing customers temporary discounts if their referrals materialize. (Answer any questions raised by audience)
Conclusion
In conclusion ladies and gentlemen we need to be ahead of the market. We need to continuously invest in market research (pause here) to understand the needs of our clients. We need to invest time in surveys... to get feedback on our performance. We need to motivate Compu Fix employees to meet higher performance standards. We need to grow the Compu fix business through a practical and effective referral program.
Ladies and gentlemen if you have any further queries regarding my proposed program please feel free to contact me. Thank you for attending... (Smile and wave)
1. Facts and Assumptions The case study focuses on the rising number of accidents involving Ford SUVs fitted with Firestones tires. Judging by the high number of cases, culpability lay with either the tire manufacturer or the auto company. Both entities knew about the problem but rather than face up to it they opted to prevent the story leaking to the public. Their major concern was the high costs of initiating a total recall of suspect tires or faulty vehicles.
2. Major Overriding Issues Problems By failing to disclose to the authorities and the public, the inherent risk of buying a SUV fitted with Firestone tires, both companies are liable for any injuries occasioned by tire defects and vehicle accidents. Quality control at the Decatur plant was compromised in the aftermath of the strike. Rather than address this issue, Firestone ignored the possible consequences, as it was more interested in profit maximization than it was in safety issues. Fords maintenance teams disregarded advice from Firestone engineers with regard to tire pressure under inflating the tires contributed to greater instability for the SUVs.
3. Sub-issues and Related Issues Firestone officials accuse Ford of manufacturing a vehicle that was not stable and, advising their customers to inflate their tires with a lower than recommended tire pressure as suggested by Firestone Company. The issue of negligence arises as Ford Company ignored the advice of experts and put the consumers lives at risk. Firestone placed tires in the market with the knowledge that such tires had not passed quality control standards. These sub issues highlight the discordance between two complimentary firms seeking to increase their market share in a competitive industry. Instead of collaborating to produce goods of high quality, they seem to be operating at cross-purposes.
4. Stakeholder Analysis The major stakeholders in this case study are the press, employees, shareholders in the two companies, owners of Ford SUVs fitted with Firestone tires, NHTSA, and top management at Ford and Firestone Companies. The way the saga develops has a major bearing on the market value of the shares. Investors are keen to know what will happen to their investment and would prefer a speedy conclusion to the whole matter, which reduces further erosion of stock prices.
By breaking the story, the press were fulfilling their role as the peoples watchdog. Avarice, dishonesty and mega-scandals perpetrated by company executives at the expense of the public good need to be exposed otherwise, the press would be accused of failing in their duties. This case acquits the press of ineptitude.
Employees may lose their jobs should the firms lose their market edge and close down because of quality concerns. The management must do whatever it takes to operate with integrity and thus ensure a ready market for the firms products.
Oversight bodies like NHTSA often fail in their duties to safeguard the public interest for various reasons. This case highlights NHTSAs predicament and places Congress on the spot for creating a body that is ineffective when it comes to enforcement. Both Congress and NHTSA are keen to prove that they can work efficiently to ensure the public does not suffer loss.
Competitors have a lot to gain from fallout between the two companies. Ford will begin to look for a new supplier while Firestone would be forced to negotiate with another company. Quality concerns will encourage clients to shift their preferences to other makes like Nissan or Bridgestone. In the final analysis, these two companies will lose a large part of their market share and most likely, they will experience financial difficulties.
5. CSR Analysis Both companies have a corporate responsibility to all stakeholders. By failing to present relevant information to the press and concealing the number of lawsuits filed against them, Firestone and Ford acted irresponsibly. The public have a right to know all relevant information about a product and full disclosure by the company is important. This right takes precedence over the firms economic concerns. Risking the lives of their customers to make a profit goes against accepted social norms.
Investors interests must be protected at all times. The management of a firm should ensure that all decisions reflect this concern. Selling faulty tires and compromising customer safety has an impact on future sales, as clients will avoid those companies that place a higher premium on profit margins than on customer satisfaction. Scandals cause investors to shy away from stocks thus leading to a fall in share prices and a devaluation of investors portfolios. Apparently, managements of both firms ignored such considerations.
By recalling Firestone tires on Ford SUVs and compensating clients, Ford Company, proved that it was a responsible citizen. Firestone chose to battle out in the court despite overwhelming evidence that their tires were defective. By valuing money, more that the lives of its clients, Firestone failed to act as a responsible corporate citizen.
6. Evaluation Both companies displayed poor sense of judgment in seeking to conceal information regarding issues with their vehiclestires. The management of both firms failed to work as a team to address the various issues they were facing. Instead of tackling the problem, they resorted to blaming each other.
NHTSA failed to carry out their mandate diligently as set out in the charter. This case revealed major flaws in the law and enforcement issues that allowed both firms to conceal vital information. Officials of NHTSA cannot escape censure for failing to alert the government of these issues. Congress must act immediately to empower NHTSA to deal with cases of this nature
7. Recommendations and Implementations Congress should review the mandate of all bodies charged with overseeing compliance and public safety to make them more effective in dealing with cases of negligence. Both companies need to ensure that quality control and testing are of the required standards.
Stringent rules should be established to ensure that companies regularly report lawsuits filed against them concerning product performance and quality. Companies must reveal product testing and accident results to enable oversight bodies establish inherent weaknesses in product designs and manufacture.
Goldman Sachs Group is a bank holding company which offers investment and financial services among others. The group was named after its founder Samuel Sachs in 1869 who joined hands with his father-in law Marcus Goldman to form a private partnership which only had a minor reputation but with so much to achieve. Goldman Suchs is one of the best performing financial institution in United States.
First, its success is attributed to the positive relations that the group was able to establish with other banks across Europe in the 1880s.This contributed much to the publicity of the group. Expansion and opening of branches abroad also led the group to enjoy competitive advantage over the others.
Maintaining a proper organizational and corporate culture was key to the success of the Goldman Group. This ensures that any financial institution and their employees abide to some set standards and procedures. Proper organizational culture also ensures that employees feel that they are part and parcel of the operations of the institution. It also leads to the proper understanding of the operational environment (George, 2006).
Sound decision making and risk taking contributes to the success of organizations. For instance, during the recent Sub prime mortgage crisis Goldman group was able to make profits through betting and shorting of mortgage related securities.
A properly conducted business survey is also critical to the excellence of organizations. This ensures that the organization properly understands the market. An excellent organization also drives its productivity through the employees. This is normally achieved through training and support which translates to efficient service delivery to clients.
Finally, sticking to what an organization is good at facilitates its excellence both in productivity and earning the reputation of being a credible employer. Specialization ensures that organizations are able to develop a pool of experts who are available at the disposal of the organization.
