Balanced Scorecard Analysis

The balanced scorecard uses short- and long-term, internal and external, and financial and nonfinancial measures to evaluate performance. Management can analyze these measures and compare

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

The Balanced Scorecard is a model used to align business activities to the organisation’s vision and strategy, improve internal as well as external communications, and monitor the organisation’s actual performance against its strategic goals. It combines financial and non-financial performance measures, such as the satisfaction of customers/stakeholders, the efficiency of internal business processes and organisational capacity in terms of knowledge and innovation. (Balanced Scorecard Institute, n.d.).

The goal of this essay is to focus on theory and implementation of the Balanced Scorecard system. Because of the structured generic approach of the methodology, the Balanced Scorecard has gained its popularity as means of evaluating performance and reporting quantitative performance results. 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 (The Balanced Scorecard Institute, 2014). The Balanced Scorecard is the most prevalent and adopted of the several strategic performance tools since the early 1990s. In addition, the derivatives of the Balanced Scorecard such as Performance Prism and Results Based Management have also gained prominence in the field of strategic performance management and improvement. The Balanced Scorecard commenced as a performance management tool that incorporated strategic non-financial performance measures to the conventional financial indicators in order to provide managers and company executives with a somewhat “balanced” view of the aspect of organizational performance.

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.

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 brings many advantages for companies such as emphases of future organizational performance (capabilities, resources, and business processes), outcomes for customers and the growth and profitability of the organization. When the balanced scorecard is applied management members of the company can follow the results of specific objectives and

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

Any business organization’s goal is to improve its operational performance. Through the employment of various types of performance measures, firms can assess the efficiency and effectiveness of their business process objectives. Furthermore, performance measurement tools can help businesses in evaluating their resource allocation processes in order to determine how resources can be better managed and distributed to the appropriate

The Balanced Scorecard comprises of a set of measurements that track financial measures that ultimately boost financial performance (Kaplan 1993). Kaplan (1993) introduced the BSC as a tool to address the ‘inability to link a company’s long-term strategy with its short-term financial goals’. The BSC bridges this gap and helps develop a comprehensive understanding of which areas they must change for the better through four key perspectives (Kaplan 2007).

) “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]

A balanced scorecard is a method of analyzing and assessing internal and external factors that affect the business strategy as a whole (Niven 2010). These four aspects that should be assessed provide a big impact for company operations and strategies. The need to know of internal capabilities and the external forces which affect how the company will innovate its’ ways, create new products or shift its’ ways into more competitive actions that are important in knowing what to do next and providing what will be best for Kasey Translate Inc.

A balanced scorecard is created to measure the following aspects: perspectives, objectives, initiatives, and targets all under one organization, but when doing so the organization’s mission and vision statements must be focused on as well. Prior to an organization considering implanting a balanced scorecard the following should be considered, in order to be effective in there long range goals and objectives:

Definition of what comprised a Balanced Scorecard was sparse and focused on the high level structure of the device. Simple ‘causality’ between the four perspectives was illustrated but not used for specific purpose. Kaplan and Norton’s original paper’s focus was on the selection and reporting of a limited number of measures in each of the four perspectives (Kaplan and Norton, 1992). The paper suggested use of attitudinal questions relating to the vision and goals of the organisation to help in the selection of measures to be used, and also encouraged the consideration of ‘typical’ areas of interest in this process. Kaplan and Norton’s original work makes no specific observations concerning how the Balanced Scorecard might improve the performance of organisations; the implication is that the provision of

The business world revealed the drawbacks and limitations of the traditional financial view in organization performance. This led the organizations to adopt and try different approaches for performance measurement (Otley and Fakiolas, 2000). The balance scorecard has been the performance management center of attention from both the industry and academia. It has been globally adopted by both the private and the public sector around the world (Kaplan and Norton, 2001).