Question4 and 5 charles

4．Critically assess the usefulness of the information contained in the corporate scorecard in Exhibit 3 as a way to implement Analog Devices’ strategy. What role does each set of measures play in strategy execution? What should be the relative importance of financial versus non-financial measures? What additional information would you like to see include in the scorecard?

As we can see from the Exhibit 3, there are three categories of measures: financial, new product, and QIP. Measures within these categories indicated how well ADI was moving toward its goals.
The financial measures show the revenue, revenue growth, profit and ROA. The new product measures show some customer-focused key variable: the new product introduction, bookings, breakeven, and peak revenue. QIP measures show some key variables related to internal business process：Cycle time, employee productivity.
Financial measures can supply some financial information about budget and accounting system, they often focus on the data, ratio and dollars.
I think some customer-focused key variable could include in the scorecard:
Customer satisfaction: that can be measured by customer surveys.
Customer retention: that can be measured by the lengths of customer relationships.


5. Evaluate the evolution of the corporate scorecard and related management planning and control system at Analog Devices during the period 1990-1995 in light of Analog Devices’ strategy in the first half of the 1990s.

ADI began to use a technique called Hoshin kanri to create wealth. It was an extension of the QIP effort at ADI and a realistic approach to center the company’s energies on wealth creation. It tells ADI to focus on the most important objectives: on-time delivery and new product. So it assumed a prominent place on the ADI scorecard and took a key position on scorecards throughout the firm.

Complementing ADI’s scorecard were measurements called key success factors that measured milestones related to the firm’s business plan. The key success factors were more closely related to wealth creation than the scorecard.