Balance Scorecard As A Technique Used For Performance Strategies

“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…”

The balanced scorecard now plays an important role in organization management. It has been further identified and used as an important tool in today 's business processes. According to Eric W. Noreen et al. (2002), "a balanced scorecard consists of an integrated set of performance measures that are derived from and support a company’s strategy. A strategy is essentially a theory about how to achieve the organization’s goals" (p. 551). Previously, management had been overwhelmed with data for a long

Balanced Scorecard is a general methodology that is being used to improve performance within strategic

The leading organizations use performance measurement with the aim of gaining insights to their organizations and the efficiency of their people, programs and processes. The organizations do not only collect and analyze data but they also use performance management to transform various strategies into actions and to improve their operational processes (Northcott and Ma 'amora Taulapapa 2012). Accordingly, performance management is used to manage the organizations. The Balanced Scorecard (BSC) is a prominent performance management system in the contemporary world and it was developed by Dr. David Norton and Dr. Robert Kaplan at Harvard business school. Compared to other systems of measuring performance, the BSC considers various

To make the balance scorecard accurate, the organizational management team in lines the mission, vision, and strategy of the company into the scorecard. “This depicts the long term and short term success of the strategy. The outcome measures of the balanced scorecard must represent the excellent prior performance and the performance-drivers that lead to the successful and accurate performance.” (Kaplan, R. S. and Norton, D. P.

Kaplan and Norton (1996c) defined Balanced Scorecard as a framework that helps organizations translates strategy into operational objectives that drive both behaviour and performance. They realized that although traditional financial performance measures worked well for the industrial era, but were proving to be insufficient in measuring the abilities and competencies essential for survival in changing economic environment. Traditional performance indicators tend to measure financial and accounting aspects, impacting long-term productivity and profits, whereas, Balanced Scorecard provides the measures of synthetic indicators which companies should focus on, such as customer reactions, profits, quality and flexible production selection (Martin,

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

Balanced Scorecard is a strategic performance management framework that helps organizations to align strategies with both financial and non-financial measures to monitor progress, measure performance, prioritize and reveal improvement opportunities (Henderson, Gary & Mittl). BSC is generally implemented at the corporate level, but it is useful for all levels of the organization. It should not only act as an information system for corporate management, but form a basis for encouraging behavioral change in the organization in order to conform to the vision and

The balanced scorecard (BSC) is an extensively used performance measurement tool introduced to take the strategy and vision of the business into real action from four perspectives: financial, customers, internally progress and learning and grow. (Kaplan and Norton, 1996) From all these four perspectives, it can be seen that this measurement tool is different from others because it concentrates on both financial and operational information rather than only financial figures which make the tool provide a more comprehensive of the business to shareholders and customers. In these years, BSC has developed from the performance measurement tool to a strategic management system. ( Kaplan and Norton, 1996, p 37) However, this essay aims at introducing the balanced scorecard as a performance measurement from its origins, why business needs it, how it can be utilized, how the business can get benefits from adopting this measurement tool and what potential problems and limits it has.

A Balanced Scorecard gives managers and executives a more “balanced” view of organizational performance. Today, the balanced scorecard has evolved into a full strategic planning and management system from the earlier primitive performance measurement system. This novel system is able to change a company’s strategic plan from a passive document into direct orders for the company on a daily basis. It is not only able to provide a measurement for performance and productivity, but also helps to identify what affairs should be executed and measured. A good balanced scorecard is clear-cut and doesn’t have ambiguous underpinnings like its forerunners; it enables companies to clarify their vision and strategy and transform them into action. It also offers opinion and feedback around both internal and external activities so as to consistently improve strategic performance and results. When a balanced scorecard is fully adopted by a company, it

To bridge the gap between strategy and action, organizations use the Balanced Scorecard, BSC. This tool aligns business activities to the organization’s strategy and vision thereby boosting the internal and external communications as well as monitoring its performance against strategic objectives by incorporating financial and non-financial elements from various perspectives into a single framework. Therefore, the BSC is essential in steering an organization to focus on its most relevant areas that push the organization to success by clarifying performance in relation to the business strategy. An organization can thus use BSC to achieve customer satisfaction through innovation thereby strengthening its financial position, achieve a competitive advantage and retain clients.

“The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.”

This essay examines how balanced scorecard is developed and acts as an increasingly important factor in balancing strategic objectives and measure/KPIs tools used in businesses, industry, organizations and government to integrated and aligned business vision and strategy of the organization. The balanced scorecard has changed from simple performance measurement tool to performance strategy, strategic planning and to management system that fit into current rapid change in business environment. However, this essay will only illustrate specifically in performance measurement framework using balanced scorecard and mainly focus on advantages it’s contributed to business activities. The limitation and criticism of balanced scorecard as a

The Balanced Scorecard (BSC) is one of ‘Performance Management System’ used widely around the world (Kaplan, 1993). This system is used to track the pivotal elements of a business, and allow managers to make decisions based on these measures to improve the company. Firstly, this essay will further introduce the BSC and then, its development throughout the years. Thirdly, the essay will suggest that the BSC is indeed effective as a ‘Performance Management System’ and that, lastly, it does help with the process of acquiring other companies.

Balance scorecard can communicate the nonfinancial measures into the strategic management via four perspectives which include financial; customer; internal business processes; learning and growth. These four perspectives are in cause-and-effect basis where the acquired of necessary learning and growth can improve the internal business processes and then achieve customers’ satisfaction and finally accomplish the desired financial goal or objective. The construction of strategy maps are top down, begin with the goal or objective and then the means that direct to the destination. Financial perspective generally includes increase of shareholder value or economic value. This can be done through revenue growth and productivity where revenue growth involves expending new products, new markets and new customers or enhance sales to current consumers. Productivity strategy involves lowering cost or improves assets utilization effectiveness. Customer perspective consists of customer-value proposition that differentiate companies through operational excellence, customer intimacy excellence and product leadership. Internal processes perspective can be identified after the identification of financial and customer perspective. This perspective includes internal business