Balanced Score for the Balanced Scorecard: a Benchmarking Tool

A balanced scorecard is a method company’s use to measure their performance. It includes objectives, strategies, and tactics. This paper will contain two strategic objectives for each of the four balanced scorecard areas (shareholder value or financial perspective, customer value perspective, process or internal perspective, and learning and growth perspective) for H & R Block. It will also have two strategies for every objective, one tactic for each strategy, and two methods to monitor and control the overall strategic plan for H&R Block.

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Due to high effectiveness and centeredness on customer, use of Balanced Scorecards is spread widely today. Many companies use Balanced Scorecards approach in conduct of their market analysis and assess their performance effectiveness as-far-as the customer satisfactions and relationship with the company is concerned ADDIN EN.CITE Andra Gumbus2006323(Andra Gumbus, 2006)32332317Andra Gumbus, Robert N LussierEntrepreneurs Use a Balanced Scorecard to Translate Strategy into Performance MeasuresJournal of Small Business Management MilwaukeeJournal of Small Business Management Milwaukee407-426Vol. 44, Iss. 3; pg. 407, 19 pgs32006( HYPERLINK l "_ENREF_1" o "Andra Gumbus, 2006 #323" Andra Gumbus, 2006). Use of a Balanced Scorecards has been touted to assist in improving the customer-company relationship with consistency thus, playing an important role in marketing strategy. This is reflected at Hyde Park Electronics Manufacturer. Upon implementation of a balanced scorecard, the company did manage to raise highest profit in less than 3 years. The customer perspective observed targeted customer satisfaction to allow repeat customer. Convenience offered to customer allowed the company to do their marketing and advertising with lots of ease.

Introduction- To be competitive, organizations must be both strategic and tactical to the nth degree, must be proactive rather than reactive, and must find a way to measure this easily and accurately. One way to accomplish this is through a Balanced Scorecard approach; a tool often viewed as one of the best tools that helps organizations translate strategy into performance. In general the BSA (Balanced Scorecard Approach) allows for a clear strategic and tactical directions for the organization, retains financial measurements in a summation along with their links to performance, and highlights an important and robust measurement system that links and integrates customers, stakeholders, processes, resources, and performance into single measurement strategy.

Organisations, in order to increase performance, profitability, efficiency and to gain a competitive advantage, will benefit from a good strategic performance measurement system to ensure that lower-level managers are acting in a way that is consistent with top managers’ goals and whole organisation’s strategy. One the dominant system is the balanced scorecard framework (Hill, Jones & Schilling, 2015, p.376). The Balanced Scorecard (BSC) defined as “a tool that translates an organisation’s mission, objectives and strategies into performance measures. It is used to implement strategy and to monitor and manage performance, and may form part of the

“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…”

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.

2*Jagan Institute of Management Studies, 3, Institutional area, sector – 5, Rohini, Delhi – 85, India

Dr. Harsh Purohit , iic@banasthali.in, Associate Professor & Chair- ICICI Bank CBFSI , WISDOM, Faculty of Management Studies, Banasthali University, Banasthali Vidyapith

The scorecard addresses a serious deficiency in traditional management systems: their inability to link a company’s long term strategy with its short-term actions. Managers using the balance scorecard do not rely on short-term financial measures as the sole indicators of the company’s performance. The scorecard introduces four new management processes that, separately & in combination, contribute to linking long-term strategic objectives with short term actions.

) “A Balanced Scorecard system provides a basis for executing a good strategy well and managing change successfully.” Demonstrate the validity of this statement by selecting an organization of your own choice and showing how strategies can be transformed into objectives, measures, targets and initiatives. You should cover all four aspects of the balanced scorecard. [20 marks]

* Research Scholar (ANU), Asst. Professor, Dept. of Business Administration, St. Ann’s College Of Engineering & Technology: Chirala-523187, A.P.Ph:09985287778 Email:krishnachevuri@gmail.com

The Balanced Scorecard has emerged in recent years as a performance measurement system in various organizations. This paper will discuss the origin and concept of the balanced scorecard and how it was first implemented. We will then review the criticisms on the balanced scorecard methodology as well as analyse the strengths and weaknesses of this performance measurement tool.

The Balanced Scorecard is a strategic measurement approach that provides a method of aligning business activities with the organization's strategic plan and monitoring performance of strategic goals over time. A set of balanced measures is used, rather than focusing on the single, traditional bottom line. The original scorecard developed by Kaplan and Norton (2004) was divided into five perspectives (or measurement areas):

Benchmarks are set with respect to critical areas of strategic and operational significance that influence an organization’s performance. “These could be well-known problem areas in an organization that could be clearly defined or activities/processes where improvements result in maximum benefits” (Sekhar, 2010). In order for a new strategic management strategy to be implemented, the idea must be first presented to management, and then management must understand the benefits and value of benchmarking, and then get the organization to percieve this value as well.