Bus 499 - Business Integrative Project

TUI UNIVERSITY

MODULE 5

CASE ASSIGNMENT

BUS 499: Business Integrative Project

For this case assignment, I read an article titled "Tri-Cities Community Bank: A Balanced Scorecard Case" by T. Albright, S. Davis, and A. Hibbets in the Strategic Finance. I prepared a table categorizing each measure under the particular perspective I felt was applicable. Balance scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. I will discuss why I placed each measure in the category I did and also any recommendations with adopting of the balance scorecard. To start off, I want to discuss why I placed each measure in the category I did.

In the financial perspective, having positive revenue as opposed to a negative one is the focus/drive for anyone owning or desiring to own a business. In this category I listed (1) outstanding loan balances, (2) deposit balances and (3) noninterest income. These three measures affect the money within the bank. Outstanding loan balances are very important because it shows that money was put out, but didn't come back in which in turn takes away from funds that could be used elsewhere within Tri-Cities Community Bank. Even though, deposit balances are a key, there would be no reason to have a bank if no one ever made a deposit, because the banks would have the inability to loan money and make revenues or interest rates from its customers.

Next category, I want to discuss is the "customer perspective". Under the customer perspective, I listed (1) number of new customers, (2) customer satisfaction, (3) customer retention, and (4) sales calls to potential customers. I believe it's obvious that these measures should be about the customer because the customers are the main set of interest for this perspective. In the customer perspective, the Tri-Cities Community Bank has to put out good measures in order for the customer to feel apart. According to the article, a customer representative made a statement stating "One reason for implementing BSC is to help us reach our branch goals. Everyone understands that our strategy is to balance loans, deposits, and Certificates of Deposit, with growth. For example, to create greater loan volume, we are willing to accept a lower profit margin on each loan, in which BSC helps clarify the strategy." Any company, institution, organization, or etc. knows that if you have a happy customer, the person will continue to come back and then therefore become a regular customer. Tri-Cities Community Bank is in the business of bringing customers back again and again because they deals with customers continually, ensuring their internal business perspective is in order is key.

In the internal business perspective table, I listed (1) new loans created, (2) new accounts, (3) new products introduced, and (4) referrals. Looking internally should be a continually process because there is always something that can be done better in an organization, which is something Tri-Cities Community Bank is always looking to do. The article states, "Tri-Cities Community Bank has enjoyed strong financial success over the past few years but continues to look for ways to improve its performance.' The strategic direction of the bank is reviewed annually at a meeting of top bank officials and other outside consultants. The purpose of the meeting is to outline the vision and mission of the bank, therefore they ensure all managers understand and agree on the direction of the organization."

In the learning and growth perspective, the focus shifts to the employee. In this category, I listed (1) employee training hours, (2) employee turnover and (3) employee satisfaction. If an organization doesn't have happy employees, they then will not have a productive employee or organization. No manager or supervisor