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Balanced Scorecard In Vodafone Group Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 2454 words Published: 1st Jan 2015

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McKinsey 7S framework is very important in our working environment, I have to use these theories to analyze Vodafone Company. McKinney 7S are very useful for organization. Even in 21st Century, many company use for analyzing their company. It well know and benefit for analyzing firms, for the fact that 7S. nowadays, a lot of successful firms and organizations used McKinsey 7S to achieving their goals,

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In the 7S framework, there are 7 important variables can be use into the organization: structures, strategy, systems, staffs, skills, style and shared value. There seven variables can be classified as soft components and hard components. Strategy, structure and system were hard components which are usually feasible and easy to identify because they are usually in the policy statements, business plans, organizational charts, organizational structures and systems as recorded in the report.

This is the only viable research organizations are very close, usually by observation or by interview, to understand these poplar.

Next, kotter’s 8 step change model also very important for an organization. Kotter;s model of changes work around 8 key steps that need to be planned and executed as part of any change management project. Beside that, balanced scorecard also play very important role in a firms.

Kaplan and Norton (1996) had mention that balanced scorecard is a performance tools can be used in strategic map, day by day, connective an organization to the process of organizational goals. Instead of how to capture an organization the current operation, is about creating a strategy, will drive the future direction of development, the construction of a causal link, taking into account the financial and intangible resources, you can determine the success or failure.

Overview and Analysis


The structure is the skeleton, the form of shape of organizations. It dedicates the way it operates and performs (Waterman et al., 1980). Traditionally, enterprises and departments, sectors and levels in the lower layers to answer the superstructure. Today, planar structure, where the work of the Panel of Experts to complete, but also more common. The idea is to make the organization more elastic, decentralization, giving employees and the elimination of middle management levels (Boyle, 2007)


The strategy to achieve the objectives identified in the allocation of resources over time, the plan of action or course. It different with tactic, strategy is well thought and often rehearsed. The organization from its current location to a new location described in the objectives, subject to constraints of the capabilities (Ansoff, 1965)


The system is a conventional process and organizes the implementation of the procedures followed in the strategy and run day-to-day routine matters. The main purpose of these processes is to achieve maximum benefit. Traditionally, the higher level management, the majority of decisions. More and more organizations are using innovation and latest technology to make faster decision-making process.


Staff personnel within the organization, such as engineers, salespeople, marketer etc. It is different with old organizations, the new lead agency for hiring the best employees to pay more attention to. Provide them with strict training and monitoring in support of their worker, and to give incentives in order to achieve the professional distinction of staff. Based on (Purcell and Boxall, 2008), there are two important can be apply into the organisation-strategy and competitive advantage over their competitors.


The skill is one of the part capabilities of the staff within the organisation as a whole.


The style is the manner of key management personnel in the achievement of firm goals, and that is one of the management styles of performance. Values, beliefs and norms of the dominant development over time can involve together and become relatively persistent feature of organizational life. Different from the traditional enterprise senior management and procedures, strict compliance with the enterprises have been more open, innovative, friendly, with less hierarchy and a smaller chain of command from the low-level employees are expected.

Shared Values

According (Peter and Waterman, 1982) shared values is of great significance or guiding ideology of the members share. These values and common goals, the staff as a unified team working towards a common destination. Often find their employees that might conflict with other people’s personal goals with the organisation of the weak values and common goals.

McKinsey 7S Model to analyze an organisation.

In this paragraph, important is that you want as much information as possible to collect all available sources like organisational reports, media news, internet sources, press releases and interviews. In additional, the soft components is one of the most challenging elements for change management strategy because it very hard and difficult to change. However, if the soft components is changed, it will give great impact like changed structure, strategy and organizational systems. For example, open mind is one of the way can changing the traditional culture, flexible and dynamic culture, with a value and innovation, employees can change the encouragement of the traditional culture.

It is very important to give longer time and effort to soft real-time dynamic of the organization of these fundamental values in reality, to promote the organization at all levels of decision-making. This is disadvantage and too dangerous if concentrated with the hard factors, because they are readily available. It should also highlight these components interact and influence each other. The “cause and effect” are related to each other, these two can be used to analyses of soft and hard components often yield a very interesting analysis and provide readers with an insight into of what caused the change.

Kotter’s 8 step plan

Key forces for change

For those change were made by the Vodafone company can be attributed to many forces that led to these changes and they are as follows. It is clear that Vodafone need be a market leader in the world, so it will try to change it target to become the biggest communication in the world. Vodafone also found that the old management and its lack of proper communication with its employees. The management was underestimating and limiting the potential of its front-end employees. So, Vodafone has apply this 8 step plan into the management. Vodafone formed an expert team comprising of well experienced and best available heads for various departments making sure that the heads of all department were clear about their ideas and efficiency to guide cooperate with the lower and employees.

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The first step is establishing the sense of urgency: identifying the market and the competition, identifying the crises and the opportunities available. Vodafone has formed a team which comprised expert from all fields of retail business. This forms the second step of Kotter’s eight step model which states ‘Forming a powerful guiding coalition’ meaning forming a powerful team of members to lead the change. The third step according to Kotter is creating a vision: to direct the change process and to formulate strategies (Kotter, 1995). The foremost reason for appointing CEO to make it up Vodafone which was asleep at the wheels under the management. Vodafone has a clear vision to beat the goals.

The entire teams of Vodafone knew that the high level management need make change to meet the competition from other competitor. The vision was indirectly communicated to the members of the organisation, this forms the step four according to Kotter (Kotter, 1995). In addition, Vodafone taught employees the direct method of communication with the management forming an internal email system. This also part of the step four. Vodafone empowered the store managers to decide the prices and promotions according to that local competitor. Vodafone give supportive to the store managers than being much authoritative. Kotter also explains this in step five, empowering others to act on vision. The next step was to plan and create short term wins. To change the old management, Vodafone had done some improvements in the stores by changing the way the people work.

The penultimate step explained by Kotter in the process if effective change is consolidating the improvements and producing more change – changing the system, process that don’t fit for the improvement (Kotter, 1995). The high level management like director, CEO has done many changes in the management level at Vodafone, all change in the stores structure and their way of operation. Vodafone has changed the members of old management with new and expert panel of members for each department. Vodafone has introduced differently prices products. As a part of the last step suggested by Kotter, the changes that introduce of self branded products has improved the sales on its path for healthy competition with other competitor.

Motivating employees

To motivate employees, there are a lot of ways to motivate, like employee gets motivated by linking effort, performance and result. To measure these, Vodafone proposed three variables namely Expectancy, instrumentality and valence. First, expectancy is that increased efforts which lead to increased performance, example, providing necessary raw material, support, skills training and etc. Second, instrumentality is a belief that if the performance is good then the overall result will be good, example, transparency, trust. Third, valence is about reward that the employees expect out of outcomes (Droar, 2008)

Vodafone tried to providing the best resources like replacing faulty equipment, providing good personal training, give reward for those teams have achieve the target. Leadership development programmes for managers helped believe that there is a bright future in Vodafone.

Balanced Scorecard in Vodafone Group

In 1990s Kaplan and Norton Balanced Scorecard (BSC) had introduce about comprehensive diagnoses of business performance. Based on what they found, behind the financial indicators are not enough to tell higher management whether job taking place on the ground accurately corresponds to the organisation strategy: to reduce too much or extra on cost-push in the short period financial indicators underestimate the substantial investment in research and built up the value of damage the company’s long period survival strategy.

The higher level of management has assumes model by uses the different type of award to motive as the important driver toward of the business’s strategy. Through the theories of BSC framework, it can explain by using the causes and effects of the relationship between business goals and filtering. There are four important aspects: financial, customer, internal processes and learning growth – it also can be called intangibles. In other ways, learning and growth -“If we can increase employee training about products or give some basic knowledge or information about products, so that they will know more about the products function, specification and others. With a good knowledge about full range of products, then can sell it – this can call) internal processes); if employees have experience with the products’ details, then their sales effectiveness will gain more customer or loyalty customers. Besides that, for those highest sales person can try to teaches or provide a good technique skills how to improve the sales. May be they also can provide a good skills to lowest sale person how to achieve sale target in the future. If their sales effectiveness improves, then the average margins of the products they sell will increase (financial)”. See endnote 6.

By connecting the financial and non-financial objectives, external to internal processes, future performance, business strategy will be mapped to more united working toward the same goal and organizations at all levels of staff (appendix ).


For new Vodafone stores it should be implemented continuous innovation to become the part of corporate culture. Vodafone should encourage all the employees by giving bonus which develops the growth of the organisation. All the store managers should be encouraged in implementing ideas and process in its stores. Vodafone can introduce a discount card or vouchers by which customers get some discounts for buying some phone accessories like Ipad casing, headset and others. Vodafone can improve to phone customers service by operate 24 hours to help consumers solve their problems. This helps in gaining more consumers.

Ideally, the Balanced Scorecard model has been make experiments, a good academic partner can be optimized model and teching methods of long term social enterprise managers. Eventually need a way to bridge the existing gap so once the best practice is the development and improvement experts in the field, there are agencies willing to provide this latest study the future of social company or organisation managers and thinkers.



Vodafone’s strategies were to capture growth in Asia and Middle East Asia. Vodafone undertake merge and acquisition activities. These strategies were understandable, taking into account the economy conditions and the commercialization of the telecommunication service, while Telecommunication Company required a high fixed-asset.

Looking for Vodafone, the highest position must be director and CEO. The groups under CEO can be ASIA, Europe, Middle East country and etc. When there was a need for Vodafone to require a new company, Vodafone could set up a new strategy by easily put the company under regional group. It could also clear up their company ease. In addition to that, the interpretation of this structure that Vodafone must carefully monitored the performance of these 3 important regions, how serious Vodafone is captured in India’s growth, Central East Asia, south East Asia or third world country.

Finally, the high level management like director, CEO who done the groundwork for change at Vodafone. With a good experience and wisdom, in the future Vodafone can become market leader in the global. Vodafone work hard for change process.


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