Balanced Scorecard at NTPC
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Case Code: CLBS175 Case Length: 5 Pages Period: 2016-22 Pub Date: 2024 Teaching Note: Available |
Price: Rs.200 Organization: NTPC Limited Industry: Energy Countries: India Themes: Balanced Scorecard |
Abstract
The Government of India owned National Thermal Power Corporation of India (NTPC), a leading public sector power generation company in India, had been classified as a Maharatna, by the government. Maharatna was a title given to public sector companies that met certain parameters pertaining to net profit, turnover, and annual net-worth.
Maharatna companies were given independence and were free to raise capital and take investment decisions within permitted limits without having to depend on lengthy approval processes. NTPC was one of the public sector companies which focused on developing a comprehensive approach for performance evaluation without relying completely on financial metrics alone for the analysis of the company’s financial performance.
During 2016-17, the company adopted the Balanced Scorecard approach, giving equal preference customer satisfaction, improving operational efficiency, fostering innovation, and improving overall financial performance. The present case study can help in understanding the concept of the Balanced Scorecard, the rationale behind the development of the Balanced Scorecard, its features, benefits, and challenges.
Issues
- To understand the rationale for developing a Balanced Scorecard
- To understand the Balanced Scorecard as a tool of measuring organizational performance
Introduction
India-based National Thermal Power Corporation Limited (NTPC), a Public Sector Undertaking (PSU) engaged in thermal power generation and transmission, was founded in the year 1975 as a wholly-owned entity of the Government of India (GoI). As of 2021, the government owned 51.1% of the company, having reduced the equity holding over the years.
By the year 2022, NTPC had successfully commissioned and was overseeing the operations of nine thermal power projects, boasting a collective capacity of 13,240 MW. Furthermore, NTPC managed four combined-cycle power projects, with a total capacity of 2,527 MW. Apart from its involvement in thermal power generation, NTPC also played a significant role in the development of transmission lines.
Notably, it had constructed an extensive network of high voltage lines, spanning a total length of 20,200 Circuit Kilometers (ckt.kms), which included 816 ckt.kms of High-voltage Direct Current (HVDC) transmission lines. Additionally, the company had established approximately 85 sub-stations and sub-station extensions to support its transmission infrastructure.
Keywords
Balanced Scorecard, NTPC, Maharatna, Wealth Creation, Performance Measurement, Robert S. Kaplan, David P. Norton
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