Article Summary : The Balanced Scorecard

Soderberg, Kalagnanam, Sheehan, and Vaidyanathan (2011) presented the balance scorecard as a strategic planning procedural tool used by organizations to balance financial concerns, customer concerns, process concerns, and innovation concerns with the main purpose of developing appropriate strategy in favor of a more favorable market position (p. 689-690). Similarly, Lawrence and Webber (2008) illustrated

Balanced scorecard is a methodological tool that businesses use to get a measure by which someone can determine whether the set goals have been met or exceeded. It adds non-financial metrics to traditional financial metrics to give a well-rounded view of the performance in an organization. Balanced scorecards also help organizations to predict their success in meeting their overall strategic goals.

There are four perspectives when it comes to balanced scorecard. First one is learning and growth which means how the information and knowledge are processed and turned into competitive advantage against other companies. Second is about product manufacturing and making sure that all the products are made the same without any defaults. Third one is about customer satisfaction and making sure that customers are happy with product, service and price. Fourth one is about financial performance and making sure that company’s financial data is used properly.

Balanced Scorecards positively impact in the business development of a company with an effective application of company values to sway customer perspective ADDIN EN.CITE Morgan2002317(Morgan &

“The balanced scorecard should translate a business unit’s mission and strategy into tangible objectives and measures. The measures represent a balance between external measures for shareholders and customers and internal measures of critical business processes, innovation and learning and growth. The measures are balance between outcome measures, the results of past efforts, and the measures that drive future performance. And the scorecard is balanced between objective, easily quantified outcome measures and subjective, somewhat judgmental, performance…”

A balanced scorecard is a performance measurement system, which takes into account the customers, internal business processes, learning and growth, as well as financial

The balanced scorecard includes four perspective areas focusing on financial and non-financial categories contributed to achieving the corporations’ strategic aims. The four broad categories are; financial performance, customer satisfaction, internal processes, and learning and growth (Blocher, 2013). By breaking the organization’s performance into four perspectives, organization leaders are able to quickly break down where the organization ranks measures that are most critical to success.

While there are many advantages to using balanced scorecards in your accounting toolbox, there are a few disadvantages to the method as well. First, the balanced scorecard takes forethought. It is not a tool you can just think up one night to solve a problem. Instead, it is recommended that you hold a meeting to plan out what goals you would like to see your company reach in each of the four above areas. Once you have clearly stated objectives, you can then begin to break down these objectives in what you will need, financially, to bring these objectives to fruition. As explained by Bowen (2011), while the balanced scorecard gives you an overall view of the four areas for concern in business growth and development, these four areas do not paint the whole picture. The financial information included on the scorecard is limited. Instead, to be successfully implemented, the balanced scorecard must be part of a bigger strategy for company growth that includes meticulous accounting methods. Many companies use metrics that are not applicable to their own situation. It is vitally important when using balanced scorecards to make the information being tracked applicable to your needs.

The balanced scorecard is a strategic planning and management system is used to help align activities of the vision and strategy of the organization, and apply it to the overall

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

A balance scorecard is essential for developing a healthy business growing place. It is a vital key for defining the goals and targets of a company as well as the vision, mission and the SWOTT Analysis. A balanced scorecard is, “A set of measures that are directly linked to a company’s strategy: financial performance, customer knowledge, internal business processes, and learning and growth” (Pearce & Robinson, 2013, p. 194). This company will relate the in-building turbines values, mission, vision and SWOTT Analysis with the four perspectives of the scorecard (financial performance, customer knowledge, internal business process, and learning and

A Balanced Scorecard can be defined as a “performance management tool which began as a concept for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy” (Wikipedia 2009, ¶ 1). Scents & Things will need to develop a balanced scorecard that will assist in meeting and help define the company’s values, mission, vision, and SWOT analysis. The balance scorecard is made up of four perspectives; financial, customer, learning and growing, and internal process. This paper will define each of the four perspectives objectives, performance measures, targets, and initiatives. The paper will also show how the perspectives relate

Definition: Popularized by Robert Kaplan and David Norton, the Balanced Scorecard is a method for monitoring whether a company is meeting or will meet its strategic objectives. Key Performance Indicators (both lagging and leading) are broken into 4 areas

The balanced scorecard influences the development of an effective performance management structure that seeks to increase the level of performance while enhancing the monitoring process of the organizational tasks. The program influences the identification of the lacking areas within the organization that remains instrumental in