Balance Scorecard Of RTXM

Objectives

Table 1: Balance Scorecard of RTXM
(Source: As created by Author)

The above drawn Balance Scorecard (BSC) is a management system helping in the measurement of the company’s performance from four different perspectives. They are Financial; Customer; Internal Process; and Learning and Growth. As per the above table, there are certain objectives under each perspective along with the means to measure them. The achievement of each objectives will be measured against the previously set targets so that the performance gap can be analyzed. The BSC matrix also shows the required initiatives to be taken for the achievement of these objectives (Bititci et al. 2012).

The four important metrics are mentioned below:

Return on Capital Employed (ROCE): ROCE is considered as an important metric as it is used for measuring the profitability of the company after considering the factors of capital used for it.

 Increase in Customers’ Loyalty: Increase in customers’ loyalty refers to the retention of customers and for this reason, it is considered as a fundamental metric for the success of the companies (Taylor and Baines 2012).

Innovative Products and Services: The introduction of innovative products and services is considered as an important metric as it is highly necessary for increasing the revenue of the companies.

Employee Satisfaction: Employees are considered as the greatest assets of the businesses as they help in the achievement of the goals and objectives of the companies. For this reason, it is considered as one of the major matrices for measuring the organizational success (Nørreklit et al. 2012).

Super Cheap

Benefits: The main benefit is that RTXM will get their required products in a large range from Super Cheap for the purpose of their business expansion plan. Most importantly, this supplier is offering these products to RTXM on a very low price than its competitors. Apart from this, RTXM will be getting these products delivered in a short time. All these aspects will increase the profitability of RTXM that is helpful for their business expansion (Kiron et al. 2013).   

Cost: It needs to be mentioned that Super Cheap is not an environmentally sustainable company, as they do not take any action against their anti-sustainable business activities. In addition, this supplier is also involved in the issues like child labor, low wages, health and safety issues and others. Thus, RTXM will lose their business goodwill by involving with this supplier (Fischer et al. 2012).

Benefits: Green Fashion is well known for their sustainability activities. As per their sustainability agenda, this supplier extract resources on ethical basis and their product material is kind to the environment. In addition, the company promote work-life balance of the employees and provides inventive. By involving with this supplier, RTXM will get sustainable recognition among the customers that will increase the revenue and profitability of the company (Willard 2012).

Measures

Costs: By involving with Green Fashion, RTXM will not be able to get the required products in a large variety of range for the purpose of their expansion. In addition, RTXM will have to pay high price for the products from Green Fashion that can increase the overall cost of the company. Apart from all these, RTXM will not get the delivery of their products from the supplies in quick time. All these aspects can affect the profitability and expansion of the company.

From the above figure, it can be seen that there are four states in Life Cycle Analysis (LCA). Among these, two major stages are Inventory Analysis and Impact Analysis. From the combination of these stages, it can be seen that there are four areas that has either social or environmental impact. They are discussed below with suggestions for improvement:

Raw Materials Extraction: It needs to be mentioned that RTXM has to depend on the farmers for raw materials. Thus, this process has a social impact as it is the reasonability of the company to pay the fair amount to the farmers.     

Use of Natural Resources: RTXM has to use various natural resources like water, land and others. Thus, it has an impact on the environment. It is recommended to RTXM that they needs to extract the exact amount of resources required for the production process (Tas 2013).

Waste Management: In the manufacturing process of RTXM, the presence of various wastes can be seen like the wastage of water, electricity, cotton and others. For this reason, it is required for RTXM to implement effective waste management strategy for the reduction of manufacturing wastes (Guerrero, Maas and Hogland 2013).

Manufacturing Process: The manufacturing process of RTXM has both environmental and social impact. Social impact is there as the wellbeing of the workers is involved in this. Thus, it is recommended to RTXM that the company needs to make timely and fair payment to their workers. In addition, RTXM is also required to develop effective environmentally sustainable strategies after taking into consideration the negative effects of their manufacturing process on the environment.

It needs to be mentioned that the business organizations or industries use specific techniques to increase the value of shares in long-term by considering the major stakeholders. For this reason, the garment industry of Singapore is selected to know the ways to increase the value of the shareholders. They are discussed below:

• One major way to increase the value of the shareholders is to comply with the policies and regulations of environmental sustainability. In the recent years, environmental sustainability has attracted the attention of the customers. Thus, it can be done to increase the value of the shareholders (Verbeke and Tung 2013).
• The company can also increase the value of the shareholders by increasing the revenue of the company by the selection of right types of customers. At the same time, the company needs to offer the customers different attractive products with better after sales services (Stout 2012).
• The increase of the value of the shareholders also depends on the increase in gross profit with the selection of right suppliers and to maintain a good relationship with them.
• The company can also increase the value of the shareholders by increasing the return on operating cost investments with the selection of right employees as it will help in the increase of productivity of the company (Armour and Gordon 2014).
• Another major ways to increase the value of the shareholders is to lower the cost of capital of the companies with the optimization of assets.

References

Armour, J. and Gordon, J.N., 2014. Systemic harms and shareholder value. Journal of Legal Analysis, 6(1), pp.35-85.

Bititci, U., Garengo, P., Dörfler, V. and Nudurupati, S., 2012. Performance measurement: challenges for tomorrow. International journal of management reviews, 14(3), pp.305-327.

Cabeza, L.F., Rincón, L., Vilariño, V., Pérez, G. and Castell, A., 2014. Life cycle assessment (LCA) and life cycle energy analysis (LCEA) of buildings and the building sector: A review. Renewable and sustainable energy reviews, 29, pp.394-416.

Fischer, J., Dyball, R., Fazey, I., Gross, C., Dovers, S., Ehrlich, P.R., Brulle, R.J., Christensen, C. and Borden, R.J., 2012. Human behavior and sustainability. Frontiers in Ecology and the Environment, 10(3), pp.153-160.

Guerrero, L.A., Maas, G. and Hogland, W., 2013. Solid waste management challenges for cities in developing countries. Waste management, 33(1), pp.220-232.

Kiron, D., Kruschwitz, N., Reeves, M. and Goh, E., 2013. The benefits of sustainability-driven innovation. MIT Sloan Management Review, 54(2), p.69.

Nørreklit, H., Nørreklit, L., Mitchell, F. and Bjørnenak, T., 2012. The rise of the balanced scorecard! Relevance regained?. Journal of Accounting & Organizational Change, 8(4), pp.490-510.

Stout, L.A., 2012. The shareholder value myth: How putting shareholders first harms investors, corporations, and the public. Berrett-Koehler Publishers.

Tas, E., 2013. Integrated water resources management. Aerul si Apa. Componente ale Mediului, p.217.

Taylor, J. and Baines, C., 2012. Performance management in UK universities: implementing the Balanced Scorecard. Journal of Higher Education Policy and Management, 34(2), pp.111-124.

Verbeke, A. and Tung, V., 2013. The future of stakeholder management theory: A temporal perspective. Journal of Business Ethics, 112(3), pp.529-543.

Willard, B., 2012. The new sustainability advantage: seven business case benefits of a triple bottom line. New Society Publishers.