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Most of the strategies and concepts like delta model, Porter's 5 forces and PESTEL are more focused on the external environment of the organisation. This Role Based approach makes the associate to be known by their role and not by their designation. Vadim(2008) illustrates that role based is very internal to the organisation and the structure of the organisation is influenced by the role that is played by the associate. The competency and responsibility of the associate are the two major factors which defines a role in an organisation. It can be inferred that in such a kind of role based organisation the competency of an associate determines the rewards and compensation.
According to Prahalad & Hamel (1990) the core competency leads to the development of core product or service outcome. As competency is one of main feature of this Role Based approach, it will put up a lion's share in contributing to gain the competitive advantage and improve the performance of an individual. This is a significant reason for an organisation to adopt the Role Based strategy. The role and talents of a particular associate considered to be a core competency which is hard to imitate. As performance based organisation's major focus is on competencies, this approach is believed to increase the performance of an individual and the organisation. When TCS switches its gears to a performance based organisation all the compensations and rewards will be based on measuring the performance and competencies. The experience or the designation will be hardly considered for any appraisal or rewards. As Prahalad & Hamel (1990) illustrates the core competency is a lifeline to gain the competitive advantage and sustain in business. Constant enhancement and development is a way to broach the core competencies. The authors Prahalad & Hamel(1990, Pg:153) quotes that ''It is undoubtedly true that you can't improve it if you can't measure it'' measuring the performance of an employee will give a clear picture of where the employee is standing and how much that particular employee is contributing towards the outcome of the organisation. TCS endeavours to measure the performance of the associates through a strategy which could make this transparent between the employees and the organisation. Furthermore this is believed to help the organisation to figure out the straggler associates and could proffer an exact opportunity to increase the productivity from the dreary side.
According to Richard Koch (1997) ''80% of the results or outputs are derived from 20% of the input or effort'' and hence with the 80/20 principle it can be alleged 80% of the productivity is an outcome of 20% of the associates. According to Welch (2005) any organisation which desires to increase the profitability or outcome needs to increase the productivity of the top 70% of the remaining 80% employees. The 'Manager of the Century' feels that the remaining 10% who are the poorest among the 80% should be given pink slip to be a lean organisation. If the organisation intends to increase the productivity and competencies of an employee apparently the firm should know the present level of his or her performance and competency.
Eventually in order to move to the next higher step in their carer after the implementation of the RBO strategy the employee should possess required skills and competency that is set. TCS management deems that the employees who don't clasp the required skills will look forward to get better compensation and promotion by gaining the required competencies and skills. Considering this inference it is worth mentioning that TCS attempts to build its core competencies through this RBO strategy and spotlights its vision over gaining competitive advantage. (As TCS next vision is on improving the organisation in consulting - this competency building strategy will extremely be handy in order to move the employees who possess consulting skills. It will also encourage existing employees to learn)
The role based organisation strategy fire up and evolves from the roots of human resource perspective (employees) and this is one of the most valuable resources for an organisation. The resources are tangible and intangible, according to (Prahalad & Hamel, 1990) carving and nurturing the core competencies will lead an organisation to gain competitive advantage .... According to the authors in any strategy there will be a gap between the resources and aspirations which the strategy brings in. Dwindling desired output is apparently not an appropriate option to grow and sustain in business, moreover it is ineffective to adapt and implement a strategy. As the significant motive of adapting a strategy is to attain the vision and not to curb the desired vision by implementing the strategy adapted. Enhancing and leveraging the resource would be the most appropriate way to achieve the desired results and to accomplish the vision.
Resources are tangible and intangible. The tangible resources are physically present and felt like buildings, physical assets, equipments, human resource etc. Whereas the intangible resources include motivation, culture, employee's skills, knowledge, competencies, brand image etc. According to Kaplan & Norton (2004) '' Intangible assets are the ultimate source of sustainable value creation''.
According to Barney & Hesterly (2005) the VIRO is an amazing framework which allows analysing the business strategy implementation based on the resources. VIRO is a resource based model which provides a framework to analyse how the resources add value and directs the firm to gain competitive advantage. This framework is versatile for better understanding of the resources which is very important to know will the resource be able to fill the gap between the strategic intent and the aspiration. According to the authors it would also give a rough picture how much the particular resource will meet the demands of the strategic intent.
According to the authors (Barney et al., 2005, p.4) a good strategy is said to make the organisation to gain competitive advantage and it can be achieved by streamlining the resources. Conversely (Prahalad C.K. & Hamel G., 1990) suggests that competency of the associates in the organisation is an identical resource and improving it will definitely contribute a huge share in gaining the competitive advantage. As depicted in the beginning gaining such an advantage will direct the organisation to attain its vision and make the firm sustainable in business. The VRIO framework evaluates and tabulates the resources concerning the valuable, rarity, costly-to-imitate and organisation aspect.
(Barney et al., 2005, p.77) explains that this framework would give a picture of how much the particular resource is valuable to the organisation. ''Does a resource enable the firm to exploit the environmental opportunity or neutralise an external threat?'' the value of the resource depend up on the answer that is concluded for this question. Based on the answer the resource will be categorised strength or weakness to the firm.
If the particular resource is common among the competitors of the organisation then the resource would not be considered rare and it is unlikely to be a source of competitive advantage. Rarity is a significant aspect to determine if the resource possesses the capacity to escort the organisation to gleam with competitive advantage. The question for rarity as author (Barney et al., 2005, p.77) defines ''is a resource currently controlled by only a small number of competing firms?''.
According to the author (Barney et al., 2005, p.77) an organisation which achieves to possess a resource which is valuable, rare and costly-to-imitate through any strategy it will enjoy the sustained competitive advantage. The author frames the question for the verdict of imitation as ''Do firms without a resource face a cost disadvantage in obtaining or developing it'' The author points out if imitating the particular resource would bring cost disadvantage for the competitors then the resource has the capacity to gain sustain competitive advantage to the organisation. The inference of it is that the particular resource does not incur heavy cost to be imitated then the firm might gain a competitive advantage which could be temporary. However it is worth pointing out that if there is an ease room to replace this particular resource strategic outcome with a substitute economical resource would turn out as a big threat to the firm.
According to the author it is not important to possess a resource which is valuable, rare and costly-to-imitate but the most significant thing is that the organisation has the capability to handle and get the maximum out of it. The author suggests the question as ''is a firm organised to exploit the full competitive potential of its resources and capabilities''. The conjecture of essence is the organisation might have astonishing resources which could gain the sustained competitive advantage but the firm might not have the capability to take advantage of it. Eventually if the firm is not stable enough to make use of the resources it doesn't make a big difference if the firm possess such a resource or not.
'Role sets and organisation structure'
(Bassett G & Carr A., 2010) explains the internal and external roles in the domain of the organisation structure. According to the authors the role hierarchy is the critical aspect in the structure of any organisation, and it determines the structure of the organisation. The authors states the difference in roles power and position in the organisation hierarchy and also discusses about the conflicts among the associates due to a role and power shift. The performance based drift would create confrontation among the employees as the mapping of responsibilities could push few associates to the top and few would remain the same or even go down. This could psychologically affect and could de-motivate the employee and it could lead to frustration if they compare themselves with the other associates.
However it is very important for an organisation to look into the other intangible aspects like motivation and commitment, whereas it is difficult to assess with a defined tool or measure.
UP or OUT
According to (Amar V., 1996, P.19) McKinsey adopted the policy which evaluates the performance of the employees and terminate who were failed in getting promoted by the organisation within a specific time and termed as up-or-out. The up-or-out policy was adopted by McKinsey in 1948 from a revolutionary old management concept know as the 'Cravath System' named after Paul Drennan Cravath who introduced this concept in the 19th century. On the go this concept became very famous and was inherited by many law and consulting firms. The Cravath system is widely known as the 'Rank or Yank' or the 'UP-or-OUT' system in the business world. Jack Welch the former CEO of GE who is awarded 'Manager of the Century' terms the same concept in his own way as the 'vitality curve'. This strategy is known to be a huge reason behind the increase of revenue by 28 folds for GE.
Shyamal Majumdar a writer in the 'Business Standard' explains the style and concept of Jack Welch's 'Vitality Curve' in one of his article 'The Rank-and-Yank appraisal system'. According to the author managers should rank the employees under him/her in a 20:70:10 ratios. Jack Welch in one of his interviews points out that there are three ways the employees can be categorised. The first are the employees who have both results and values. According to Jack Welch these people are the great source of productivity and they should be appreciated and rewarded. The second category is where a significant amount of employee falls who has the values but not enough results to be in the creamy layer. As these standard performers are accountable for the organisation's operational success they should be rewarded and given all support to lift up their performance to the astonishing level. The final category employees are the foot-draggers who don't have values or give out results and eventually they have to be moved out. (Welch, 2005) refers this as hard part both for the person who is being fired and the person who does that.
Up-or-Out is a strategy which gets amalgamated with the culture believed to bring in fresh ideas, new skills and talented resources. The big blue chip organisation like Microsoft, GE, Ford, Motorola, Enron, Coke and Accenture which adapted this culture believes that this strategy will increase the productivity and performance of the organisation. Most of the organisations which possess this culture see that it is an opportunity to bring in new people who could have the ability of bringing a big difference. In addition Jeff Skilling former CEO of Enron Corporation explains in one of his employee meetings (2001) that they have to take such hasty decision in order to sustain even at hard times. He further argues that ''if a firm does not have a process of making hard decisions over the people who are not pulling their weight could pull everybody down''. This strategy hark back a famous phrase ''Survival of The Fittest'' quoted by Herbert Spencer.
2.3Â Motivation Theory
Motivation is an important aspect of an employee in an organisation as it has a huge effect on the performance of an employee. Motivation is also accountable for the way in which the employee behaves and progresses. According to
Motivation is "the means by which an individual is compelled, either by internal or external forces, to complete tasks" (Burke et al., 2009, p. 79). Traditional motivation theory states that the more motivated an employee is, the better he or she will perform and the better the results will be for the company. For example, if an unmotivated employee is told to sign up 100 new customers in a month, that employee will sign up 100 and then stop, satisfied that the job has been done. However, a motivated employee will continue and will try to sign up 200 or even 300, and will try to do so in a way that improves the experience for the customer and generates even more income for the company. In other words, an unmotivated employee will do what is necessary in order for his or her job to be safe, while a motivated employee will seek to perform to the maximum potential of which he or she is capable. Motivated employees also, generally, require less of a 'push', i.e. they need less direct attention in order to remind them of the need to perform the task they've been assigned, and they are able to conceptualise goals more easily and with greater reliability. It will be a great slaughter for the organisation if this strategic change de-motivates the employees and it will remain as a great challenge for TCS to make sure that this move will not make the employees to get de-motivated.
However, some critics argue that this is not necessarily the case in all situations, and that motivated employees can sometimes be a negative factor within a company. For example, Bratton (2007) suggests that "in any company, it is better to have a mix of motivated and unmotivated employees... than to have all employees being highly motivated, since the latter case will often result in greater friction within the company" (Bratton, 2007, p. 65). Furthermore, employees are not simply 'motivated' or 'unmotivated', and most are somewhere along the scale between the two. Blyton and Turnbull (2004) add that some employees "move from one area on the scale to another" (Blyton & Turnbull, 2004, p. 103), i.e. they might be motivated one day and not so motivated another. These are all complications to the traditional motivation model and it is therefore more difficult to determine precisely how people will respond to attempts to improve their motivation. However, against this, Burke et al. (2009) suggest that "regardless of daily variances, most people are either motivated or unmotivated" (Burke et al., 2009, p. 81). In other words, most people have a 'default' level of motivation around which they move along the scale.
There are two basic types of motivation: intrinsic and extrinsic. Intrinsic motivation occurs when an individual is motivated by internal factors such as personal aspirations and a desire to perform well. This type of individual does not need many, or even any, influence in order to perform to the best of his or her ability. By contrast, an extrinsically motivated employee needs to be given specific reasons to perform, e.g. bonuses, gifts of praise. These approaches can be broadly placed within Maslow's Need Hierarchy, a series of consecutive levels of motivation devised by Maslow to reflect the stages of motivation that an individual passes through:
As can be seen, the first level involves physiological motivators, i.e. the basic desire to be alive, to have enough food and water and to have warmth, somewhere to live and the other fundamental requirements of life. This level of motivation is widely regarded as absolute and common to all creatures. The second level is safety, and this too is virtually universal since it involves a feeling of security and a lack of imminent threat, e.g. a lack of fear that a job is to be suddenly taken away or that a source of food is going to suddenly vanish. As Goodman (2009) suggests this is "common to most people and is part of the basic psychological make-up of the average individual" (Goodman, 2009, p. 175). Following this is the level of social needs, which refers to an individual's need to have a place in society and to have friends, family etc. This is common to most people, and involves having friendships and a feeling of a role within society. Following this is esteem, which goes one step further and involves the individual believing that he or she has a positive impact in society and is valued, e.g. friends are glad of his or her presence and would be upset if that presence ended. Finally, there is the aspiration level, which involves an individual having an ideal version of the self and striving to reach that. For example, a person might desire to be a successful businessman in a certain field, and might do everything possible to reach that goal. Most theorists accept that even when this level of need is achieved, people tend not to feel that this is the case and will often continue to strive for even better performance. It is widely accepted that an individual cannot reach a certain level on the Need Hierarchy until he or she has reached the previous level. Maslow believed that these five needs are the underlying motivating factor behind the vast majority of actions.
2.4. Attribution Theory
Related to this are attribution theory, and the degree to which an employee sees his or her actions as passive or aggressive in terms of shaping his or her position within a company. Perry (2008) notes, for example, that some employees "believe that the course of their career, such as the question of whether or not they are promoted, is essentially based on luck and other factors that are out of their control" (Perry, 2008, p. 179), while other employees believe that they have total control and that it is up to them to achieve what they want to achieve. Therefore, different employees use different methods to attribute success or failure to their own actions. For example, one employee who consistently fails might believe that this is unfair but that it's not something that they can resolve but it's just 'how things are', whereas another employee might believe that this is a sign that they need to improve their performance and work harder and with more focus. Drucker (2007) suggests that attribution theory is "key to determining how an employee looks at his or her own situation" (Drucker, 2007, p. 225) and it is clear that, for example, an employee who believes that he or she can control his or her own performance is likely to have a higher level of motivation than an employee who believes that this is largely out of their hands. If employees are not aware of a causal link between their actions and the rewards and benefits that they receive, it will be difficult to motivate them to believe that they can improve their own position by working harder for the company.
2.5. Reward Programs
Reward programs are a means by which employees are encouraged to work more effectively and more efficiently. The idea is that they will perform at a higher level if tangible, defined benefits are on offer. For example, staff might be told that if a company reaches a certain level of profit during a month, they will each receive a bonus. At the most basic level, commission on sales is a kind of reward program, since the individual will having a very specific and very direct incentive to do better and to make more sales. However, while reward programs work well for people who are extrinsically motivated (i.e. who are motivated by the prospect of acquiring some material, usually temporary, benefit), for intrinsically motivated people they are not so effective. Nevertheless, Perry (2008) notes that "since the majority of workers are extrinsically motivated, reward programs are usually highly effective" (Perry, 2008, p. 51) and although intrinsically motivated employees tend not to require reward programs, they can be used as a marker of progress and, at worst, can be ignored by those workers.
Furthermore, reward programs can cover non-material rewards such as promotion, which can be a major way of demonstrating that an intrinsically motivated employee is making progress and is likely to get closer to achieving his or her goal. In some cases, this can involve genuine promotion, with an increased salary, increased power and increased responsibilities, but in other cases this can involve what Perry calls "a fake promotion... (which) might provide a new title and some other signs of advancement, but really doesn't move the individual further up within the company" (Perry, 2008, p. 53). For intrinsically motivated employees, there are no benefits to such a system, but for those who are extrinsically motivated this can be one of the primary means of encouraging them to perform better. 'Employee of the Month' programs are one such approach, whereby one employee is rewarded each month with the title and sometimes with some kind of small token of the company's appreciation. Many employees regard these as somewhat awkward, but there is a common sense that even if reward programs are a somewhat clumsy and blunt means of expressing appreciation, they are at least an effort. Furthermore, Perry notes that "some employees really do appreciate certain types of reward" (Perry, 2008, p. 56), in which case it is clear that the best approach is to have a range of motivational programs running simultaneously in the hope that there will be something for everyone.
2.6. Herzberg's Two-Factor Theory
Herzberg distinguishes between motivators, which give satisfaction when they are present, and hygiene factors, which give no satisfaction but cause dissatisfaction when they are absent. Hygiene factors include things such as "salary, fringe benefits and working conditions... (which) are necessary for an employee to feel that a job is worth doing and are generally expected to be present in all jobs" (Jennings, 2003, p. 54). This unipolar system is similar, in some ways, to Maslow's Need Hierarchy, in the sense that both distinguish between fundamental expectations and more intrinsically generated views of the benefits of a particular job. However, some critics have argued that the Two-Factor theory is unsupportable because not only does it assume that motivation is uni-directional, i.e. that all motivation is positive and is directed towards the job, but it also fails to distinguish between people who are motivated in a number of simultaneous ways. For example, an employee might be motivated to perform well at work, but on a particular day might be motivated also to get home early for some specific reason, in which case there will be tension and the employee might not perform as expected. The Two-Factor theory can therefore be seen as a means of identifying broad motivational issues rather than as a definitive means of measuring and manipulating motivation within employees.
RBO could turn out to be a pushing factor for the associates who are working for their hygiene needs to motivational factors. As RBO measures the performance of an employee it makes the employees to prove themselves and to the organisation which could make them actualise themselves.
However on the other hand the employees who are not able to perform or not comfortable with such a system would
RBO which focuses on the performance of an individual should be chary over the measurement of it, as it determines the level of the employee and their compensation which is the combination of two factors of Herzberg. Motivating the employees could push the organisation to attain their vision and mission. As the RBO strategy focuses on motivating the employee would amplify the performance of an individual it consecutively incite the employees to learn and grow. Motivating the employees to Learn and develop will enhance the compentencies within. As illustrated by Prahalad & Hamel (1990) the competencies of an individual will certainly perk up the performance and quality of the system and service delivered. According to Kaplan and Norton (the strategy focused organisation, 1992, Pg.76) the internal business process and system activities are needed to create the desired customer value. On the other hand this will satisfy the expectation of the customer and would delight them as the employees working for the clients are highly skilled and talented. According to Kaplan & Norton( ) creating desired value for the customer would make the organisation to be financially successful which could lead a path to attain the vision and mission of the organisation.
TCS attempts to achieve the desired customer value and financial outcomes through RBO strategy by bracing it from the roots. This strategy focuses on improving the skills, capabilities, knowledge of the employees and system of the organisation which is the fourth perspective of the balanced scorecard and the root of achieving the mission.
Hence the motivating factor is essential and has a huge impact over the performance of an employee. It is a major driving component to make this a successful strategy by wringing the best outcome in every sector starting from the learning & growth, internal operations, customer and financial.
Balanced Score Card:
Attaining the vision and mission would be the final objective for an organisation and in order to achieve that the management adopt strategies. Seniority or Grade based is the existing system of TCS and the performance based drift is the strategy adopted to attain the vision and mission of the company. Balanced scorecard is an ideal tool that measures the organisation strategic objectives and tabulate. According to Kaplan& Norton(2004) balanced scorecard helps in transforming the strategic objectives into measures and targets and it also makes the action plan as a part of the frameworks which enables the targets for all the measures to be achieved. The authors refer to these action plans as the strategic initiatives.
Kaplan & Norton (1996) illustrates that The Balanced Scorecard translates mission and strategy in to objectives and measures. The balanced scorecard has four different perspectives which could measure the organisation from different aspects. The four different perspectives are: Financial, Customer, Internal and Learning & Growth. This strategic change in TCS is a way to achieve the mission and look into the four major perspectives and analysing it would be helpful to determine the sustainability and success of the operation. As the strategic mapping is build on the four major perspectives of the balanced scorecard by Kaplan & Norton it would be elaborated in the strategic mapping section below.
Analysing the existing seniority based or grade based system from the balanced scorecard mapping view gives a rationale on the role based approach. According to Kaplan & Norton (1996) the internal perspective analyses the critical internal process in which organisation should excel. The difference in the internal system and process of seniority based in TCS does not give much importance in improving the competencies of the associates. The customers expect a lot from the associates in terms of performance which could lead to dissatisfaction. This could lead to a downfall in the financial aspect which affects the mission and value of TCS.
Kaplan and Norton (1996) points out that the financial success is the bottom line improvement that any organisation would expect out of the strategies that is implemented. Any strategy that is planned or implemented will have a motive of increasing the financial performance of an organisation. TCS also tries to implement a strategy which could increase the profitability and to manage the cost. Ultimately the organisation has to satisfy the customer needs and provide a valuable service. According to Kaplan & Norton (1996) the core outcome measure of the customer segment focuses the satisfaction and profitability of the clients. RBO is in place as a solution for both.
Strategic map is a pictorial representation of the whole strategy which is in place or to be implemented in an organisation. Kaplan & Norton (2004) who proposed this describes that the strategy map gives a visual framework that integrates the organisation's objective in four perspectives of balanced scorecard. According to Kaplan & Norton (1992, Pg.69) strategic map framework has been designed after analysing hundreds of strategy scorecards. This map has been a strong foundation to articulate the flow of the operation that is carried out. The authors suggest that articulation of the strategic objectives is crucial for achieving desired outcomes and successful value creation.
'' Balanced score card strategic map provides a framework to illustrate how strategy links intangible assets to value creating process'' Kaplan & Norton (2004). According to Kaplan & Norton (2004, Pg: 29) ''Value creation is indirect'' and they illustrate that the intangible resources hardly have a direct impact over the financial outcomes. Whereas the intangible resources affects the financial outcomes through chains of 'cause-and-effect' relationship. Every so often they are the roots for the financial outcome of an organisation. Core of this research is based upon the strategic map and developing it for TCS. Consequently elaborating the different perspectives and the elements in the map is necessary.
Financial performance of an organisation is an indicator of the organisation success and this perspective describes the tangible outcomes (liquidity) of the strategy Kaplan & Norton (2004). According to the authors an organisation's financial performance gets improved through two approaches.
The growth of revenue depends upon the strategy and customer value creating strategic objectives, conversely Kaplan & Norton (2004) emphasise on sustain growth in shareholder value is and should be the overreach of the financial objective. However it is unfeasible to gain the financial objective and success without value creation and customer satisfaction.
Kaplan & Norton (2004) argues that customer satisfaction and value creation is a principle component for improving the financial performance. This perspective measures how the internal operations and intangible assets being a foundation to create value, satisfaction and enhancing relationship. The customer perspective describes the different paths to create value and satisfaction for the customers targeted which is referred as value proposition. Kaplan & Norton (2004) exhibits four different value propositions that they have observed form the organisations and according to them choosing the customer value proposition is the central element of the strategy.
According to Kaplan & Norton (2004) the skills and the system which is required to bring customer's value perceived by the customer would be highly valuable for the organisation. For example if the targeted customer of an organisation considers that quality is their value then all the competencies, internal system and processes that would bring in that quality is highly valuable for the organisation. According to Kaplan & Norton (2004) The elements mentioned in Fig() are the different value propositions that helps to identify it. An organisation which is focusing on low cost product or service should not only focus on the competitive cost but it should also be of a standard quality. However if the organisation chooses a low cost value proposition then its objective in the internal and learning and growth divisions should focus on attractive prices and outstanding quality. Kaplan & Norton (2004) argues if the organisation is likely to choose the product leadership as their value proposition then the organisation should offer the best product or service in the market in terms of value, features and functionality. The main objective for the organisation would be focused on innovation.
According to Kaplan and Norton (2004) the complete customer solution value proposition is stressed on building long lasting relationship with customers. This proposition aims at making the customers to trust that the organisation would provide the products or service which would satisfy their needs. The organisation should offer an outstanding service, quality relationship and complete solution. The final preposition is the lock-in and according to Kaplan and Norton (2004) in lock-in strategy the firms generate long-term sustainable value by creating high switching costs for their customers.
It is worth mentioning that the three of the value propositions in fig() replicates the three nodes of delta model proposed by . It is appropriate to comment that Kaplan & Norton has introduced one more dimension to the model which is the low cost total. Whereas the low cost total is a way to add value to the customers is suggested by Michael E Porter in his competitive advantage framework. Kaplan & Norton reviles that the idea of balanced scorecard and the strategy map has been developed form an idea by porter. According to Kaplan & Norton (2004, Pg: 35) '' Strategy maps and balanced scorecard can be developed from any strategic approach, we base our approach on the general framework articulated by Michael Porter''. Therefore the customer perspective could be pictured as a combination of delta model and the competitive advantage framework.
The internal perspective discusses how these desired financial outcomes and customer value propositions are achieved by the critical process in the organisation. Further down in the strategy map learning and growth perspective also elaborate the same thought the enhancement of the intangible assets. According to Kaplan & Norton (2004) ''Internal process accomplish two vital components of an organisation strategy. The first is that they produce and deliver the value proposition for customer and second is they improve processes and reduce cost for the productivity component in the financial perspective''. The authors denote that the value is created to the customers through these internal processes. The internal perspective has four clusters which would be discussed later in the analysis chapter.
Learning and Growth Perspective
The final perspective of the strategic map is the learning and growth and the intangible resources in this perspective act as a foundation for both financial outcomes and creating value for the customer. According to Kaplan & Norton (2004, P.29) the intangible assets such as knowledge, competencies and technology rarely have direct impact over the financial outcomes, whereas the impact are indirect and every so often they are the roots. This strategic map would give a logical flow how the intangible resources meet the strategic outcomes though a cause-effect relationship. The authors break up this intangible resource perspective in to three capital. Human Capital - Information Capital - Organisation Capital. The three capitals would be elaborated in the analysis chapter.
This tool has been extremely handy to figure out the gap between the existing and future system. It spots the ?? position of the company from four