Pine Products Inc.: Value Drivers and Balanced Scorecard

Published 01 Jan 2004
Reference 5190
Industry Chemicals
Region Europe
Summary

This case describes how Pine Products, a formerly state-owned company in the chemicals industry, transformed itself into a high-performance organization following its privatization. It highlights the need for the company to redesign its performance measurement and reward systems in line with the Value-Based Management philosophy implemented by the holding company. The case centers on the issue of how the day-to-day operating activities of the business can be linked to the Group’s value-creating mission through a set of actionable value drivers and performance indicators that tie into Economic Value Added.

Teaching objectives

The primary purpose of the Pine Products case is to allow an informed discussion about how to design a performance management system that supports the implementation of VBM across all levels of the organization and that focuses people�s attention on the key drivers of economic profit. The broader purpose is to illustrate how aggressive implementation of the shareholder value-creation imperative under VBM can lead to radical corporate transformation.

Keywords
  • AR2004
  • AR0304
  • RD0104
  • VALUE BASED MANAGEMENT
  • ECONOMIC VALUE ADDED
  • EVA
  • VALUE DRIVERS
  • BALANCED SCORECARD
  • PERFORMANCE MEASUREMENT
  • KEY PERFORMANCE INDICATORS