Balanced Scorecard Case Study

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The Impact of using Balanced Scorecard on Strategic Performance of Small and Medium Enterprises REVIEW OF RELATED LITERATURE This research paper describes an overview of the theoretical background of the Balanced Scorecard as well as describing the historical foundation and the development of its theories. A company’s success will have a correlation with its strategy. However, if an organization cannot implement and cascade its strategy throughout the company, they may experience a low rate of success and may fail eventually. The strategy of a company is often aligned to the mission, vision and core values of an organization along with a well thought out plan that will give a company an advantage compared to its competitors. Kaplan and…show more content…
Kaplan and David P. Norton stated that the balanced scorecard is defined as the translation of an organization’s mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system.” (Kaplan, R.S. and Norton, D.P. 1996) In the beginning of the introduction of the balance scorecard, the Activity Based Costing or the ABC Approach was introduced by Johnson and Kaplan. Because of this, the organizations were able to move organizations away from the financially biased measurement to a more balanced approach that are related to the four perspectives of an organization’s success which are the financial, customer, internal processes and learning and growth. 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.
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