Budgeting Basics and Beyond

22.10. The Balanced Scorecard Implementation in Oxiteno

The coexistence of the Budgeting and residual income became a dichotomy, since the variable pay was still linked to Budgeting. Between 1999 and 2000, Oxiteno studied the possibility of implementing the BSC strategic management methodology, still focused on indicators. In 2001, the BSC was effectively implemented, engaging the group's four Directors and some selected Managers.

The major change triggered by the Balanced Scorecard was the Strategy dissemination throughout the Organization. Previously, the Strategic Planning was restricted to the Board of Directors; the BSC, through the strategy translation into strategic objectives, indicators, targets and initiatives allowed the organization to be aligned to the strategy, thus engaging and motivating the workforce, especially the employees whose performance affects the company's strategy more directly.

The workforce engagement in the BSC was felt soon after its implementation, when the 2002 Budgeting was developed by the managers who took into account the strategic targets represented in the BSC, in spite of the fact that they were not asked to do so.

The Balanced Scorecard was incorporated by Oxiteno and the company has witnessed that the strategic learning is taking place; the company's high management has determined that in 2005 Strategic Meetings shall be held every two months to analyze the effective implementation of the strategy, and follow-up reports on the BSC results ...