Mobil USM&R (A): Linking the Balanced Scorecard

Robert S. Kaplan

Case | HBS Case Collection | September 1996 (Revised September 1999)

Mobil USM&R (A): Linking the Balanced Scorecard

Abstract

The CEO of the marketing and refining division of a major oil company is in the midst of implementing a profit turnaround. He transforms the strongly centralized, functionally-organized division into 17 independent business units and 14 internal service companies. The division also launches a new, market-segmented strategy aimed at high-end buyers. The CEO recognizes, however, that the new organization and strategy require a new measurement system. He turns to the Balanced Scorecard (BSC) because of its ability to link measurement to strategy, and to help the new profit-center managers develop customized strategies for their local responsibilities. The case describes the development of the initial divisional BSC, the linkage of the divisional BSC to independent business unit and internal service company BSCs, and linkage of the BSC to managers' compensation. Concludes with the senior executives reflecting on how they are using the BSC in their management processes.

Keywords: Organizational Change and Adaptation; Measurement and Metrics; Management Practices and Processes; Organizational Design; Balanced Scorecard; Corporate Strategy; Mining Industry; Energy Industry;

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Kaplan, Robert S. "Mobil USM&R (A): Linking the Balanced Scorecard." Harvard Business School Case 197-025, September 1996. (Revised September 1999.)

Related Work

Case | HBS Case Collection | September 1996 (Revised April 1998)

Mobil USM&R (B): New England Sales and Distribution

Robert S. Kaplan

The general manager of a local gasoline/distillate sales and distribution business unit must communicate a new strategy to the unit's 300 employees. An initial strategic planning exercise identified a high-priority list of opportunities that blended the parent division's national strategy with a customized, local strategy. But for the new strategy to be effective, the old measurement system, which stressed only sales volume and cost reduction, had to be replaced. The manager led the development of a local Balanced Scorecard (BSC), derived from the division scorecard (described in the (A) case). To communicate the critical features of the local BSC, the unit's senior managers established a Super Bowl competition in which all employees were challenged to achieve stretch targets on five BSC measures. This case describes the communication and management processes for the Super Bowl measures.

Keywords: Balanced Scorecard; Adoption; Strategic Planning; Customization and Personalization; Management Practices and Processes; Growth and Development Strategy; Measurement and Metrics; Motivation and Incentives; Performance Evaluation; Energy Industry; Mining Industry; United States;

Citation:
Kaplan, Robert S. "Mobil USM&R (B): New England Sales and Distribution." Harvard Business School Case 197-026, September 1996. (Revised April 1998.) View Details

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Case | HBS Case Collection | September 1996 (Revised May 1997)

Mobil USM&R (C): Lubricants Business Unit

Robert S. Kaplan

The general manager of a Lubricants Business Unit in Mobil's U.S. Marketing and Refining division launched a project to develop a Balanced Scorecard (BSC) for his unit. The purpose was to provide focus for all employees of the unit, enabling it to operate on an integrated basis. After the unit's scorecard had been developed, the general manager challenged the project team to extend the effort out to every employee in the business unit. The team started by constructing a cause-and-effect tree that linked high-level business unit objectives down to positions or tasks for every individual. The team then visited all locations, using the cause-and-effect tree to link the unit's strategy and scorecard to individuals' responsibilities. This case describes the construction of individual BSCs and their impact on employee behavior.

Keywords: Balanced Scorecard; Employees; Customization and Personalization; Performance Evaluation; Measurement and Metrics; Management Teams; Projects; Energy Industry; Mining Industry; United States;

Citation:
Kaplan, Robert S. "Mobil USM&R (C): Lubricants Business Unit." Harvard Business School Case 197-027, September 1996. (Revised May 1997.) View Details

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Case | HBS Case Collection | October 1996 (Revised April 1998)

Mobil USM&R (D): Gasoline Marketing

Robert S. Kaplan

Mobil US Marketing & Refining has shifted from a centralized staff-driven organization to decentralized business-units. Staff functions now must negotiate service agreements with a buyer's committee consisting of representatives from the profit-center business units. This case describes how one staff function developed its service agreement and translated the agreement into a Balanced Scorecard where the "customers" are the internal business units. Several managers question whether the Balanced Scorecard is appropriate for such an internal function.

Keywords: Balanced Scorecard; Management Teams; Human Resources; Agreements and Arrangements; Organizational Change and Adaptation; Customers; Situation or Environment; Business Units; Energy Industry; Mining Industry; United States;

Citation:
Kaplan, Robert S. "Mobil USM&R (D): Gasoline Marketing." Harvard Business School Case 197-028, October 1996. (Revised April 1998.) View Details

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Case | HBS Case Collection | June 1997 (Revised May 1998)

Mobil USM&R (A1)

Robert S. Kaplan

First of a two-part case on the development and use of a Balanced Scorecard (BSC) at Mobil's US Marketing and Refining Division. Split from the original (A) case to give students an opportunity to suggest objectives and measures for the division's initial BSC, without seeing the actual choices made by Mobil's managers. Describes how the CEO of the marketing and refining division of a major oil company is in the midst of implementing a profit turnaround. He has transformed a strongly centralized, functionally-organized division into 17 independent business units and 14 internal service companies. The division has also launched a new, market-segmented strategy aimed at high-end buyers. The CEO recognizes, however, that the new organization and strategy require a new measurement system. He turns to the BSC because of its ability to link measurement to strategy, and to help the new profit-center managers develop customized strategies for their local responsibilities. This case describes the development process of the initial divisional BSC, and the formulation of objectives and measures for the financial and learning and growth perspectives.

Keywords: Balanced Scorecard; Measurement and Metrics; Restructuring; Corporate Strategy; Organizational Change and Adaptation; Growth and Development Strategy; Management Teams; Marketing Strategy; Motivation and Incentives; Mining Industry; Energy Industry; United States;

Citation:
Kaplan, Robert S. "Mobil USM&R (A1)." Harvard Business School Case 197-120, June 1997. (Revised May 1998.) View Details

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Case | HBS Case Collection | June 1997 (Revised May 1998)

Mobil USM&R (A2)

Robert S. Kaplan

Second of a two-part case on the development and use of a Balanced Scorecard (BSC) at Mobil's US Marketing and Refining Division. This case describes the completed BSC, and how this was linked to the BSCs of the independent business units and the internal service organizations. Also describes the linkage of the BSC to managers' compensation through a new variable-pay plan. Concludes with the senior executives reflecting on how they are using the BSC in their management reviews. Focuses on the management processes surrounding the use of BSC. May be taught with Mobil USM&R (B): New England Sales and Distribution, (C): Lubricants Business Unit, and (D): Gasoline Marketing, which describe the development and use of BSCs in two independent business units and one staff department.

Keywords: Balanced Scorecard; Performance Evaluation; Management Teams; Management Practices and Processes; Executive Compensation; Motivation and Incentives; Corporate Strategy; Energy Industry; Mining Industry; United States;

Citation:
Kaplan, Robert S. "Mobil USM&R (A2)." Harvard Business School Case 197-121, June 1997. (Revised May 1998.) View Details

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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.

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Mobil USM&R (A): Linking the Balanced Scorecard

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