Balanced Scorecards And How They Can Be Used For Goal Setting And Decision Making Within An Organization

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In this paper, I will discuss balanced scorecards and how they can be used for goal-setting and decision making within an organization. As an emerging business professional, it is important for you to understand balanced scorecards because “research has shown a strong a positive link between successfully implementing a social and environmental strategy and corporate value (Epstein 9).” Greater than 50% of Fortune 1,000 have implemented the model in some way. (Hendricks) Balanced scorecards help all units of an organization communicate their goals and succeed. First, I will describe what a balanced scorecard is and why it is useful to an organization. Second, I will discuss the advantages and disadvantages to be aware of when working with a balanced scorecard. Finally, I will explain how cascading the scorecard improves the functionality and communication within a business. A balanced scorecard is a popular management tool that evaluates a company’s performance with both financial and nonfinancial measures (Hendricks). This concept was developed after the realization that a company could not determine its success by one factor (Manzoni 193). Organizations are complex, often consisting of multiple departments which have different goals and measures of success. Choosing one factor to explain the organization’s achievement as a whole is near impossible. “Financial indicators, for example, are typically considered to be ‘lagging indicators of performance,’ because they record

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