Balanced Scorecard for Charitable Organization - Essay Example

Balanced Scorecard for Charitable Organization ID Balanced Scorecard for Charitable Organization Introduction In strategicmanagement for any organization ranging from non profit to profit making organizations, there is need to include balanced scorecards to help create a sense of direction for the management to follow during the process of running the organization (Hannabarger, Buchman & Economy, 2011). During strategic management, a number of goals may be developed aiming at improving service delivery and the general aspects that the organization engages in. though balanced score cards, it becomes easy for the organization to focus on these items and follow up to ensure that each set goals are obtained for the better of the organization. For the charity organization, development of balanced scorecards aids in ensuring that the mission, vision and objectives of the organization are achieved. For this case, the organization runs activities that aim at funding and taking care of children that have difficulties. The organization provides services that enable these organizations to run smoothly and ensure that these students are offered the best in relation to education. The details of this study aim at discussing a balanced score card for the charity organization and the application through which the organization can improve its services and remain focused to enriching these people with learning difficulties with the actual skills they need for everyday life. The details provide a balanced scorecard that the organization relies on to lead its operations. Balanced scorecards aid at eliminating darkness in an organization. Darkness in its operations and creating a clear path for the following of the organization to aid achieve their goals. The development of these targets oriented with annual assessment means has worked to provide the necessary yardstick to measure an organization’s performance. The balanced scorecard also aids in the consideration of the Metric-Driven Incentives that consider focus more on the financial aspects of an organization that range from increasing profits to reducing operational costs. The charity organization runs its activities through the funding obtained from personal budgets. The proceeds from the canteen provide for the smooth running of the services of the company hence providing for the financial needs of the company (McCarthy & Chapman, 2013). Relating to the above, a balanced scorecard relates to a business document that is in the strategic planning and management system for the alignment of business operations with relation to the vision statements and the mission that the organization operates within. It simplifies the mission and vision of the organization into small practicable forms that the organization relies on to sustain its activities (Niven, 2011). They are simply management betterment tools. For a proper development of the balanced scorecard, understanding the organization’s mission statement and strategic plan provides a good start. Understanding the financial status of the organization, its current structures, operations, the employee’s expertise and level of satisfaction it provides to its cause or customers aid in developing the balanced score card. For the organization under consideration, the operations are for a nonprofit charitable organization that obtains its funding from running a number of cafes and personal budgets. The employees provide the necessary support for running the organization and the organization depends on the sales in the cafes and profits for their services. Generally, a balanced scorecard carries four major arms that range from the finance department, the internal processes that the organization holds, learning and growth and the specific target people that the organization targets or customers for profit making organizations. Each of these areas require improvement and alignment to the goals of the organization and through these, better returns will yield that will cover the organization’s plans. Finance Department The finance department works in developing and controlling the financial aspects of the organization. As a nonprofit organization, their finances require proper control measures that ensure the expenditures are controlled for retaining more money for running the activities of the organization. Controlling of the financial resource helps the organization to obtain resources and control them for better delivery of their intended objectives. These parts of the scorecard help the management to track financial aspects ranging from expenditures and incomes (Marr, 2014). For the purpose of this paper, the cash flows of the organization, increasing funding, financial results with regard to incomes and expenditures, value for money audits and the review of expenditures are considered as items to discuss under this. Cash Flow Management Cash flows provide organizations with better directions for their money that ensures that they obtain the right resources and place them in the right aspects to control their movements. Using cash flows enables the organization to understand the cash aspect invested in operating and financial investment aspects. The management of cash flows will help provide a better system for managing the cash of the organization and ensuring that their core objectives are achieved. Increasing Funding Another goal in the scorecard is the increment of the funding that the organization obtains from the different sources to support their activities more. The increased funding will require more activities that generate income and increasing of the donor related funding. As the organization grows, the number of children with learning difficulties that the organization needs to handle may increase causing a need to have ready funds to handle them. Creating a funding advantage earlier provides the organization with a better strategy to handle growth. Financial Results The consideration of the financial results of the organization for the improvement of the processes would guide the organization in improving their financial resources. Financial results may look at the incomes and expenditures of the organization, the balance sheet of the organization, the different cash flow needs and the analysis of the results especially the income statements to reflect the level of growth and in returns or accumulated fund. Trough this, the organization is in position to priorities their operations with the most pressing handled first followed by those that may not affect the financial aspects of the organization. Value for Money Audits The need to audit consumption of finances creates the need to identify value for money as an essential aspect of financial control. Value for money provides of the control of expenditures and any outflows of money for a variety of these reasons. Value for money ensures that the organization is in position to obtain its needs in expenditure and asset forms at reasonable prices that will ensure the value of the goods or item purchased meets the money expended on it. Value for money audits creates a watch over the expenditures and the cash movements of the organization. Review of Expenditures Review of expenditures on a regular basis creates the necessary understanding of the expenditures and a better way of ensuring that the expenditures are controlled. Control of expenditures aids in the control of the financial aspects of the organization that leads to better financial decisions that promote the objectives of the organization. Reduction of expenditures reduces costs of production (Novak, 2000. p.10). Internal Processes of the Organization The internal processes of the organization refer to the different activities that the organization runs as a way of ensuring its objectives are met and sustained (Wang, Pfahl & Raffo, 2007, p.27). These range from the number of activities attached to the different functions, the alignment of the processes, the development of control measures for the process bottlenecks, the process automation, the regular appraisal of the business processes and development of better internal structures to manage employee activities. Alignment of the Business Processes The business processes that the organization engages in require a procedural approach if they are to lead to better results. Developing procedures creates avenues for the proper management of the organization’s vision and mission. Process Bottlenecks Many operations in the organizations create bottlenecks that may cripple the operations and make it difficult for the company to operate smoothly. The bottlenecks in the processes create management difficulties and handling them enables continuity in management and hence achieving the set objectives along with the mission and vision of the organization. Process Automation Process automation is possible through the development of procedures of the company’s operations. The automation creates a systematic flow of work and the development of better planning abilities. The workers can have a particular culture developed that will guide work and ensure a constant flow of work as per the needs of the organization. Regular Process Appraisal The regular process appraisal creates an understanding in the processes of the organization and helps improve where lapses seem evident or prone to occur. Improving the processes will create room for better results hence aiding the organization obtain its mission and goals. Internal Structures Established In Organization Structure Forms The development of an organization structure helps reduce conflicts within the organization and align responsibilities to the appropriate arms of the employee. These structures allocate responsibilities to employees; ensure they all know their span of authority, and work providing a harmonious working environment through which attainment of the vision of the organization becomes possible. Learning and development Learning and development requires the continuous provision of training to the employees to ensure they are equipped with the necessary skills it takes to run the operations of the organization (Balanced Scorecard Institute, 2014). As a nonprofit organization, provision of services and management of their operations in relation to the vision and mission requires skilled labor to ensure the necessary skills that help students with learning difficulties are utilized to enable their learning. These parts of the scorecard require a consideration of the skills necessary to handle the organization, employee turnover aspects, provision of learning and training opportunities to the employees to ensure their skills development, aspects of job satisfaction and constant appraisals to rate employee development and growth. For skills necessary to run the organization provide the organization with skilled manpower that will execute their duties right creating an environment that supports the vision of the company. Employee turnover affects the organization and may make it difficult for the achievement of the vision and goals. The employees require guiding the organization in the direction that supports and helps the organization achieve its goals and in return reward the employees with growth opportunities as motivational aspects. These help the employees’ confidence hence controlling the turnover aspect. The constant learning and training of employees provides the company with the necessary skills it requires in it employees. Their constant appraisal will reveal the area in which they prove lacking and the training programs will cover these. Specific Target Populations The target population for this organization is the people with learning difficulties that the organization aims to support and guide through the learning process. Development of better training means to these people enables them to obtain the necessary skills to manage life. The company will consider the delivery of quality services to these people to help improve their learning process, provide a more favorable environment for their learning through systems developed to handle their special needs and ensuring constant review to prove the effectiveness of the different methods applied in the education. Regular checks on their progress and the consistent development of programs that develop and enhance their learning abilities will provide a positive impact to the learning of this class of people. In conclusion, the balanced score card for the charitable organization provides a sense of direction that will enable the organization stick to their goals and ensure that the people that they serve obtain better services that will help them manage and improve their learning abilities. It is therefore vital to follow the scorecard and rate the performance on a regular basis to ensure the organization keeps growing overtime. Ensuring that this process is critically programmed for makes it easier for the achievement of the goals and objectives of the organization. They provide the organization with the necessary direction for running their affairs and keeping their target groups taken care of. References Balanced Scorecard Institute. 2014. Balanced Scorecard Basics. Retrieved from http://balancedscorecard.org/Resources/About-the-Balanced-Scorecard Hannabarger, C., Buchman, F. & Economy, P. 2011. Balanced Scorecard Strategy for Dummies. John Wiley & Sons. Marr, B. 2014. What is a Balanced Scorecard? Advanced Performance Institute. Retrieved from http://www.ap-institute.com/Balanced%20Scorecard.html McCarthy, S. & Chapman, A. 2013. Kaplan and Norton’s Organizational Management Tool. Business balls. Retrieved from http://www.businessballs.com/balanced_scorecard.htm Niven, P. R. 2011. Balanced Scorecard: Step-by-Step for Government and Nonprofit Agencies. John Wiley & Sons. Novak, C.2000. HPI Balanced Scorecard. ASTD. Wang, Q., Pfahl, D. & Raffo, M. D. 2007. Software Process Dynamics and Agility: International Conference. Software. Springer. Read More