Alternate Ways of Measuring Performance Essay

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Balanced Scorecard Alternate Ways of Measuring Performance Abstract Many organizations are usefully viewed as a web of relationships between and among various stakeholder groups. An organization may be defined as a "nexus of contracts," where said "contracts" are relationships that are marked by contributions from the various stakeholders in return for inducements provided by the organization. Over the long haul, the success of an organization is a function of the extent to which the needs and requirements of its various stakeholders can be integrated and balanced, without sacrificing any one to the other. There is, in this arrangement, mutual influence and accountability. It is the main thesis of this paper that many…show more content…
A successful balanced scorecard implementation must also incorporate a communication mechanism, which allows management to communicate its strategic vision and goals to the employees, who, in return, can also report their processes and progress back to management. Multidimensional Architecture Since an organization is composed of multiple levels, a scorecard must support different levels and perspectives from strategic business units and divisions, to departments, teams and individuals. To accommodate this architecture, the scorecard is structured as multiple, aggregated cubes. Each layer a nesting of the ones below. In general, the highest level cube defines the measures and dimensions that apply to the corporate level, and these drill through to divisional and departmental cubes that have a more detailed level of information (Nickols, 1999). This “artery” of the cubes lets the strategy communicate down the organization, while performance is aggregated up through the organization like blood through vein. Cubes are an ideal vehicle to implement a hierarchical architecture. You can have both logical and physical separation of the data; i.e., data can reside in one cube where different views are offered to different users, or alternately data can be maintained in completely separate cubes. In cases where the data is inconsistent, it may be allocated to provide managers with more
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