Assignment:
REQUIRED
It is often suggested that one of the most important aspects of a Strategic Performance Measurement System (SPMS), and specifically a Balanced Score Card (BSC), is its ability to "translate strategy into action" in other words Strategic Alignment. A necessary step in developing this strategic alignment is to determine cause-and-effect relationships inherent in the organisation's activities and by extension in its various organisational sub-units (usually expressed by way of a strategy map). Having identified these cause-and-effect relationships, the BSC is used to identify and then implement a relevant and comprehensive set of leading and lagging key performance indicators (KPIs) across the financial and various non-financial perspectives. And then most importantly, these various activities and perspectives, with their relevant KPIs, are linked to the incentive system of the organization. Kaplan and Norton make the strong point that a BSC can only really impact the organizational performance if it is linked to the manager' intrinsic and extrinsic incentives.
As part of these considerations, the goal of achieving goal congruence between managers and the organisation, and between subsidiaries and the parent company is important. As goals differ between managers and between subsidiaries, control and goal congruence can be achieved by differentiating the compensation packages to various managers (both parent and subsidiary managers) according to their roles and contribution to the overall stratagies of the organisation and it's subsidiaries. And to add further complication, the cultural distance beween the parent division and the subsidiaries of a multinational corporation and the location of the foreign subsidiary would also have an effect on the compensation system.
Research Activity
Undertake a search of the relevant literature to determine what are the major issues related to the implementation of Strategic Performance Measurement Systems (SPMSs), such as the Balanced Scorecard, in respect to management performance evaluation and compensation, in multi-national organisations.
Prepare a Report/Essay
Having completed your research you are then required to prepare a paper that outlines the major issues related to the implementation of Strategic Performance Measurement Systems (SPMSs) ), such as the Balanced Scorecard, in respect to management performance evaluation and compensation, in multi-national organisations.
Your paper should include a brief discussion on the nature of SPMSs, such as the Balanced Scorecard, and a detailed discussion on the implications related to strategic alignment, management performance evaluation and compensation, in multi-national organisations.