The Financial Perspecitve

‘‘Analysis of how Saatchi & Saatchi implemented the balanced scorecard and its apparent effects’’

Introduction:
In every company it is very important to carry out a clear mission and vision because this will create strengh and solodification to build loyalty among the employees. Now let´s aim the assesment of the use of the balance scorecard in Saatchi & Saatchi, known as one of the premier advertising and “creative service” organizations (nevertheless they have had their ups and downs over the last ten years or so), and see how they implement it and the outcome of it.
Prior to the 1990s, Saatchi & Saatchi enjoyed phenomenal growth. However, as a result of the economic and financial crisis brought about by the Asian crisis in the 1990s this growth was suddenly stopped. Given the changes within the company's macroeconomic environment, it reevaluated its existing vision, mission and strategies, which resulted to changes. These changes also resulted to the establishment of new financial goals that are aligned with the company's new vision and strategies. The following are the goals that Saatchi & Saatchi's new leadership established in terms of the financial perspective of the team's approach to combat the effect of the economic recession in the 1990s:
1. A revenue growth rate higher than the market
2. A 30 per cent operating profit for the additional revenues
3. Earnings per share to be double

Analysis:
Given the above financial goals and its new vision and strategies, Saatchi & Saatchi also reorganized its organizational structure. The company created three agency categories, mainly led, drives and prospers. In lined with organizational restructuring, the company designed different strategic plans for each unit. The prosper business units are characterized by having less than 50 employees and have inherent limitation on their expansion that they might never become gigantic agencies. Hence, the prosper units' strategy is to obtain high margins from...