Borealis

Robert S. Kaplan; Bjorn N. Jorgensen

Case | HBS Case Collection | December 2001 (Revised February 2008)

Borealis

by Robert S. Kaplan and Bjorn N. Jorgensen

Abstract

When Borealis, a European producer of plastics, used a traditional, time-consuming budgeting process, the budget was quickly out of date in a competitive environment characterized by continually changing input and output prices and dynamic market conditions. This case describes the process that led Borealis to replace its budgets with four targeted management tools: rolling financial forecasts, Balanced Scorecard, activity based costing, and investment management. It also discusses the process of implementing the new measurement and control systems.

Keywords: Activity Based Costing and Management; Budgets and Budgeting; Forecasting and Prediction; Investment; Governance Controls; Balanced Scorecard; Management Systems; Manufacturing Industry; Europe;

Format: Print

17 pages

Educators Purchase

Citation:

Kaplan, Robert S., and Bjorn N. Jorgensen. "Borealis." Harvard Business School Case 102-048, December 2001. (Revised February 2008.)

This note was prepared by HBS Professor Robert Kaplan and Professor Anette Mikes (University of Oxford) for the purpose of aiding classroom instructors in the use of “Swissgrid: Enterprise Risk Management in a Digital Age,” HBS No. 119-045.

Many companies are now attempting to achieve triple bottom line performance on financial, environmental, and societal metrics. Successful strategies for such performance, however, generally require new relationships among multiple players in multiple sectors across a company’s supply chain for products and talent. The Balanced Scorecard (BSC), originally developed to describe and implement a single organization’s strategy, needs to be adapted to reflect such multi-stakeholder strategies for triple bottom line performance. The Financial perspective is replaced by “Outcomes” to encompass financial, environmental, and societal metrics; Customer becomes “Stakeholders” to reflect the interests of the multiple participants in the ecosystem; and Learning & Growth becomes “Enablers” to include the new capabilities for collaboration and alignment. The paper motivates and illustrates the new framework with examples from innovative agribusiness ecosystems.

Based in Cairo, Afreximbank was founded in October 1993 as a specialized continental financial institution designed to address the low level of intra-African trade, the decline in financial flows to Africa, the worsening external debt situation of many African countries, and the sharp reduction in lending to Africa by international commercial banks. This case study explores how the Bank introduced the Balanced Scorecard (BSC) to improve the Bank’s performance management system. The goal was to transform the Bank’s bureaucratic culture and processes into one more attuned to the fast-paced and dramatic changes happening in Africa. The case examines how the BSC is being used to implement the Bank’s strategy and the issues arising from its implementation. The case facilitates a discussion on whether the Bank had become entrepreneurial enough to keep pace with the continent’s thriving, emerging markets.

Faculty & Research

Borealis

Abstract

Citation:

About the Author

More from the Author