Analysis Of Balanced Scorecard. Description Of Bsc . The

To achieve its long-term objectives that would enable an organization, strategic or institutional management is the conduct of implementing, evaluating cross-functional decisions and drafting. In order to design and achieve these objectives and then allocating resources to implement the programs, projects, plans and policies, it is the process of specifying the organization’s objectives, mission and vision, developing policies and plans, often in terms of projects and programs. Companies often evaluate the overall performance of the business and its progress towards objectives through a balanced scorecard.

The balanced scorecard is a strategic planning and management system that was developed by Dr. Robert S. Kaplan and Dr. David P. Norton in the early 1990's. Their goal was to provide organizations with a clear understanding of what to measure in order to improve performance and results (Balanced Scorecard Institute 2014). The balanced scorecard is a framework that allows an organization to measure performance and compare it to the organization’s strategic objectives and goals (Kinney and Raiborn 2013, 10).

The Balanced Scorecard Institute reports that in the 1950’s General Electric was the first to use the Balanced Scorecard approach, but it was not until the 1990’s when Dr. Robert Kaplan a Harvard Business School professor and Dr. David Norton officially titled it the Balanced Scorecard. Once used as only a measurement tool for organizations, it is now a complete strategic planning and management system (Balanced Scorecard Institute, n.d.). Originally, businesses looked at the financial reports to distinguish whether it was a quality company or not. Kaplan and Norton however believed the financial reports only showed past history and an organization must also track how it is performing currently and look at ways to constantly improve future performance. Kaplan and Norton established there are four business segments or perspectives to measure and make improvements on. The four segments

It is about making strategic decisions that contribute to the achievement of an organization’s overall corporate objectives.

The balanced scorecard is a strategic management system that helps guide corporate strategy to meet a number of disparate objectives (BSI, 2011). It does this by highlighting for managers the key objectives in a number of areas in order to find the strategy that best meets all of the objectives. These areas are the financial, customer, learning and growth, and internal business processes. Kaplan and Norton (2004) make the case that in order to create value, three behaviors are important focusing on the customer, being creative and innovative and delivering results. Most of the measures in the balanced scorecard will relate to this underlying philosophy.

Accounting practices raise a lot of issues. The BSC is supposed to solve most of them: abstraction, shortsightedness, monetary orientation, oversimplification and lack of focus on intangible factors (Johanson _et al._, 2006). But things are not always perfect. According to a KPMG report cited by McCunn in 1998 (McCunn, 1998), more than 70% of scorecard implementations fail. The implementation of a balanced scorecard in a company needs certain "enablers" that companies often lack. Described by Chan (2004), these are for example: top managers' commitment, training and education, clarity of vision.

It was comprehensive and clear. The strategy map, with its four dimensions, clearly defines the cause and effect relations and how the intangible assets (employees) can get converted into tangible financial results. Each dimensions objectives had defined metrics associated with them to illustrate what is necessary to overcome the challenge. The Balanced Scorecard was the perfect tool to measure, monitor and define these outcomes. Along with the Balanced Scorecard was a matrix that listed each objective and with a set of actions that was assigned to the appropriate business unit that was responsible for monitoring and achieving their targets. This helped with implementation because there wasn’t any question as to who the champion would be assigned to a particular objective. It allowed ownership, and with the CEO leading this transformation program and being supported by top management, it helped with buy-in from the employees.

A balanced scorecard is a popular management tool that evaluates a company’s performance with both financial and nonfinancial measures (Hendricks). This concept was developed after the realization that a company could not determine its success by one factor (Manzoni 193). Organizations are complex, often consisting of multiple departments which have different goals and measures of success. Choosing one factor to explain the organization’s achievement as a whole is near impossible. “Financial indicators, for example, are typically considered to be ‘lagging indicators of performance,’ because they record

Another advantage is that it ensures that by taking in the four different aspects, that the senior managements are taking a more balanced view about the performance of the organization. It also ensures that the short, medium and long-term views are managed in a perpetual and cohesive manner. It also aligns the top level strategies with those of middle management ensuring that they are clearly connected and appropriately focused. The BSC if properly created will ensure that the organization’s performance reporting system is focused on the things that will give it the competitive advantage both in the short and long term and by realizing value for its stakeholders.

The balanced scorecard can act as different roles in a company. When acting as a measurement of performance, BSC follows two steps. Firstly, it draws objectives and measures from the company’s overall strategy. In other worlds, it converts the vague strategy into detailed actions. Then, by using these objectives and measures as a benchmark, the performance are evaluated from four different aspects including the financial, customer, internal-business-process and learning and growth perspective (Kaplan and Norton, 1996). The financial perspective concentrates on financial health of a company, it is the most direct way for executives to measure organization performance. Usually, the good performance of the other three perspectives of the scorecard will lead to good results of financial performance as the four perspectives are interrelated. In terms of

I. Introduction: I choose this topic because Strategic Management is a way in which strategists set the objectives and proceed about attaining them. It deals with making and implementing decisions about future direction of an organization. It helps us to identify the direction in which an organization is moving. I believe that strategic management should be something that every business professional should seek to perfect in their day to day decision making.

Strategic or institutional management is the conduct of drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives[1]. It is the process of specifying the organization 's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives.

The shareholders are the suppliers who will coordinate with the company properly in terms of providing supplies and materials. The customer is another stakeholder who will determine the results of the new strategy implemented by the company. The employees will also be affected as the processes they apply will also change because of the alterations in the strategy. Revenue is projected to increase because of the good service as a result of a Balanced Scorecard strategy. Better use of company assets because of the increased efficiency of the workers. And higher costs for the company because adjustments need to be made for the new BSC strategy.

To evaluate an organization 's Strategic Business Units (SBU), the Boston Consulting Group developed a portfolio performance framework.

The duties and responsibilities of today's business manager cover both internal supervision and appropriate response to the external business environment (Frenz 2012). When internal change is called for, he must manage that change. External response is elicited by trends and innovations in the outside business world. When internal controls and resources merge or respond to external trends and opportunities, strategic management is set in operation. The manager constructs plans accordingly and guides the entire organization through the needed strategic changes. These changes in company strategy must be infused or reflected in its mission statement, the traditional SWOTT analysis and strategic choices. The mission statement expresses the core culture and direction of the company. The SWOTT analysis embodies the company's internal and external capabilities in meeting and responding to internal and external stimuli and charting its direction as well as its future. And strategic choices are the important decisions made by its top management executives. These incur substantial company resources and exact long-term consequences, which are difficult to change in case of poor outcomes. Strategic management enables him and other managers to plan ahead and make high-quality strategic choices for eventual or unforeseen unique or risky future situations. But strategic management can also fail or disappoint if the plan miscarries or does not turn out as planned (Frenz).