Learning objective of group assignment: To provide you with practice and experience in applying the information we have learned about performance management systems, this group assignment asks you to design a balanced scorecard as a performance management

HRM20020 Group Assignment Problem Definition Report

Group members:

Gabriel Manfrin

JonPaul Furlan

Kevin Zhang

Jessica Tin

Choice of organisation:

EBay.

EBay is a virtual international online market place where buying and selling goods takes place, this can range from anything as small as pens to something as significant as selling submarines.

Problem definition and rationale:

What is the key performance problem for this organisation?

The key performance problem that EBay is suffering is the liberalisation of the many online traders on the international market. It is through their trading activities which EBay is losing its identity as an online auction site and adopting a “buyers” destination for goods. From this it brings many concerns regarding fraud, postage prices, and large brand names using EBay's website as a virtual warehouse to store their inventory.

How does this performance problem relate to the four balanced scorecard perspectives?

There are several issues that raise concern, regarding EBay's business processes. According to the four balanced score card perspectives, customers personal privacy issues somehow becomes a critical topic in eBay when sellers and buyers register their personal information. Meanwhile they are also facing a problem how to protect children and teenagers from some inappropriate material or information in terms of more and more young people interested in shopping online (Scott, 2012). Customers also want to get what they bid for when they buy something online because they cannot see the real item before it arrives (Thomas, Gattiker & Dianne. H. Parente, 2007). EBay also has issues on internal business processes, which is, they should pay more attention to the speed of their delivery in terms of their sellers location being all over the world. They also need to learn and innovative new products and improve quality of their products (Jamshed .M)

What are the strengths and weaknesses facing the organisation?

Opportunities

1. Census has illustrated in United States and United Kingdom, 13.3% and 7.7% total expenditure generated in the two nations are from internet retailing in first quarter 2016. The proportion increased from 2.8% and 3.3% in 2007 respective. (Census 2016) The enormous increase is expected to persist, and eBay still has a large market to conquer. Particularly with the prevalence of internet service and smart phones, more users have adopted online shopping.

2. Brand Reputation is another opportunity that exist for eBay. (Lin and Daim 2009) eBay is one of the first established internet market place around the globe. eBay’s reputation will function as an opportunity to acquire and attract more new starters selling or buyer in internet platform. (Lin and Daim 2009)

Threats

1.As eBay is an e-commerce organization, its primary income is generated from sales on its online retail platform. With that in mind, eBay may be threatened by internet insecurity. Increasing amount of malware and hackers are targeting e-commerce platforms and social networking platforms due to the large volume customer information they store on their site. eBay needs to evaluate the threat in online security and ensure the security of its information and system (Lin and Daim 2009).

2.As eBay expands in the size of its operation it is no longer the low cost e-commerce organization that it used to be. As eBay become larger in size, its product and services incur overhead costs into consideration. Thus eBay may be threatened by relative small regional e-commerce platforms (Lin and Daim 2009). These platforms incur lower overhead cost and are thus capable of providing substitutable services at a lower cost (Lin and Daim 2009).

3.Exchange rates is another instable factor that threats eBay. eBay’s operation and revenue is highly dependent on the exchange rate internationally, fluctuation in foreign exchange rate or home rate may jeopardize eBay’s profitability (Lin and Daim 2009).

Strengths

1. EBay has more than 150 million live postings and more than 105 million dynamic clients internationally in 37 nations. That makes eBay the biggest commercial centre web, having an incredible control over other online retailers.

2. EBay has a strong business model, which is a bridge connecting buyers and sellers and providing a commercial platform that helping small business be success.

3. As EBay becoming a dominate name in e-commerce it give companies high competitiveness. Meanwhile, this will help EBay to attract more sellers and increase their sales, revenue and market shares.

4. The procurement of Pay Pal has helped the organization to upgrade the experience of clients utilizing eBay. This has had a thump on impact and helped the fulfilment of clients utilizing eBay. Pay Pal saw its incomes ascend by around 90% . year-on-year, while it additionally encountered a 80% expansion in instalment volumes (Jurevicius, 2016). 

Weakness

1. Ebay needs to improve their revenue in advertisement, despite the fact that promoting income speaks too little of incomes, it is a region where eBay ought to hope to abuse in request to create more noteworthy incomes for the organization overall.

2. There are numerous issues for eBay and the great one is excessive charge backs. Cheating and security issues happen frequently will affect customers unwilling for online purchase in utilizing cards.

3. Products transferring also a vital jobs. Spoiled goods, overwhelming, big are always issues and cost a lot. Time somehow for shipping will change customers’ option to buy things from other places (Seyed.M. Hassan & Amir. J.Sistani & R.Sayta Raju, 2014 ).

Rationale:

The rationale at looking at problems across different performance perspectives is that they are activities that can be linked and are central to HR. Using The Balanced Score card as our new Performance Management System considers the key problem of poor financial performance we have put activities and measures into the four perspectives (financial, internal process, customer, learning and growth) of this performance system. We have chosen two measures in particular to incorporate into these perspectives. We did this because it as our aim is to obtain continuous feedback and improvement that will highlight any skills and knowledge gaps, and create a better financial situation for eBay. HR is able to measure and monitor performance measurement activities a lot more accurately and effectively using the Balanced scorecard.

Our Strength is in our customers and the correlation with our brand name (Lin & Dain 2009). The two supporting practices that the HR department has decided to implement to help with the ailing financial perspective is to introduce a reward system and secondly learning and training opportunities for employees. The HR rationale is to find activities that support creativity and innovative (internal processes) as well as measures that promotes learning and training opportunities to help staff at eBay deal with the innovation economy and current poor innovation standards resulting in a decline in our financials with our competitors. We think applying a reward and learning and training opportunities will help to create this environment. A new customer focus within our strongest perspective of our company will be driven by applications and HR activities toward better online service in security (An example is not receiving the items what they thought they had purchased, (Thomas. F. Gattiker & Diane. H Parente, 2007) and better logistics knowledge in our system. The rationale of HR and the Balanced score card is to innovate an approach to best practice when we are dealing with delivery and security issues by also incorporating activities based on a rewards system across and within the four perspectives of the Balanced Score Card.

These two chosen HR activities to be performance measured to reflect improvements in financial productivity and revenue from links in implementing and fostering innovations will be measurements of the learning and reward incentives. The validity in this rationale is a long-term development in the synthesis of the Balanced scorecard and the eBay brand name as being the most secure, practical and timely virtual warehouse for our customer’s distribution needs. This needs to be done without compromising our market strength of branding and recognition. We must play to our customer strengths and retain a strong image while building a strong reputation in cyber security and logistics which are weaknesses.

The customer perspective needs to keep us isolated from peripheral branding that threatens our market differentiation. Our rationale to senior management is that we need to foster these objectives so we win the market war of subjectivity to cyber space issues by focussing on learning and growth as well as rewards for innovation in our PMS system. If we ignore these issues eBay will in the long run be predispose just another online website fraught with logistical and security issues that leads to the drowning out the reputation as an e-commerce icon against such companies as Amazon and emerging Ecsty, if we don’t take action. We are leading with our brand name and a reputation as a secure and logistical warehouse for others. We do not want to represent other brands at the consequence of a diminishing our own market brand such as Amazon. (Practical e-commerce 2013, Why we abandoned Amazon and eBay, 26 March, viewed 18 August 2016,

Implementation Plan

Our implementation plan process will keep ‘consensus’ to our ‘strategic mindsets’ to deliver a holistic, systematic and analytical performance system designed by the HR architect and senior management at eBay to accomplish a ‘shared vision’ or rationale across our four business perspectives. The BSC in the implementation process becomes a tool for strategic measurement as well as for strategic management as can be seen in the illustration below. Roles and responsibilities are part of this continuous process. The initial implementation will need to be set into a managerial appointment so that the function of a BSC is used in all four business perspectives. We need to consider responsibilities and milestones to endeavour to complete the project and keep things clearly detailed and defined.

As discussed in week two when we chose our problem definition and formed a team to place into a formalised “Team charter”. The charter and subsequent meetings and correspondence were outcomes to revise progress in week Two, three and four according to the “minutes’ taken and tasks set to the tasks actually being completed. The implementation team is as follows and the plan to implement the BSC relies on us to manage our SBU/Lines of business(LOB)/ subordinate eBay departments

Gabriel – Finance JP- Accounting Kevin- IT Jessica Marketing, Customer Service, ESG responsibilities, HR, all other we have not noted.

References:

· Inc, eb. (1995) Contact customer service. Available at: http://pages.ebay.com.au/help/account/questions/about-ebay.html (Accessed: 15 August 2016).

· Tebbe, 1999, EBay's Outages Highlight Problem with I Commerce, Industrial Management Business Planning, Infoworld vol. 21, issue 25, p.34

· Speculations, G. (2015) Key challenges besetting eBay’s marketplaces segment. Available at: http://www.forbes.com/sites/greatspeculations/2015/06/04/key-challenges-besetting-ebays-marketplaces-segment/#276e5c2c1c50 (Accessed: 15 August 2016).

· Inc, eb. (1995) Postage & shipping services. Available at: http://sellercentre.ebay.com.au/postage-and-shipping/choose-provider (Accessed: 18 August 2016).

· Page, V. (2015) ‘EBay vs. Amazon business model’, in Available at: http://www.investopedia.com/articles/investing/052615/ebay-vs-amazon-business-model.asp (Accessed: 18 August 2016).

· Jurevicius, O. (2013) EBay company SWOT analysis 2013. Available at: https://www.strategicmanagementinsight.com/swot-analyses/ebay-swot-analysis.html (Accessed: 19 August 2016).

· DeNale, R. and Weidenhamer, D. (2016) Census quarterly retail e-commerce sales. Available at: https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf (Accessed: 22 August 2016).

· Lin, da and Daim, T.U. (2009) ‘Platform strategy framework for internet-based service development: Case of eBay’, International Journal of Services Technology and Management, 11(4), pp. 334–354. doi: 10.1504/ijstm.2009.024565.

· startedGetting› and e Bay (1995) What is eBay. Available at: https://www.google.com.au/search?q=What+is+eBay&rls=com.microsoft:en-AU&ie=UTF-8&oe=UTF-8&startIndex=&startPage=1&gfe_rd=cr&ei=-c-zV52sLtLu8wf2i73IAQ&gws_rd=ssl#q=ebay+subsidiaries&stick=H4sIAAAAAAAAAOPgE-LQz9U3qLI0SNbSzCi30k_Oz8lJTS7JzM_Tzy9KT8zLrEoEcYqtikuTijNTMhOLMlOLASUBDf43AAAA (Accessed: 22 August 2016).

· Seyed.M. Hassan, Amir. J.Sistani and R.Sayta Raju, 2014, “Top Online Shopping E-companies and their Strength and Weakness (SWOT)”, Research Journal of Recent Sciences, Vol.3, Issue. 9, pp. 102-107.[Accessed 22 August 2016]

· Ovidijus Jurevicius. 2016. eBay Company SWOT analysis 2013 | Strategic Management Insight. [ONLINE] Available at: https://www.strategicmanagementinsight.com/swot-analyses/ebay-swot-analysis.html. [Accessed 22 August 2016].

· L, B. (2015) Amazon’s artisan move pushes Etsy, EBay lower. Available at: http://www.bloomberg.com/news/videos/2015-10-08/amazon-s-artisan-move-pushes-etsy-ebay-lower (Accessed: 22 August 2016).