Balanced Scorecards Of Managerial Accounting

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Balanced Scorecards in Managerial Accounting There is a great deal of struggles Managers face when it comes to accounting related decisions. Financial reports are often conducive in coming up with resolutions regarding company operations, but they don’t necessarily contribute to the direct goals and missions of said companies. Individuals such as Nolan Norton and Robert Kaplan were among the first group to recognize the dilemma of solely relying on financial reports and the outcome resulted in what is now known as a balanced scorecard (Bible, Kerr, & Zanini, 2006, p. 18). In an article written by Larry Bitner and Mary Myers (2010), Kaplan and Norton state that balanced scorecards are used for “translating an organization’s mission and…show more content…
18). What eventually resulted from these meetings is the balanced scorecard. According to Bible, Kerr, and Zanini (2006), Kaplan and Nolan’s group: Companies use four common perspectives in their scorecard, supplementing these with a number of customized perspectives as needed. The four perspectives were: financial, customer, internal, and innovation and learning. Each perspective helped answer a basic performance question: How do we look to shareholders? How do customers see us? What must we excel at? Can we improve and create value? (p. 19) This concept was initially summarized in an article in the Harvard Business Review in 1992 followed by two subsequent articles to expand and improve the strategy with the third article setting new standards and encouraging companies from all over to adopt the ideas companies (Bible et al., 2006, p. 19). Since it was originally published the concept of the balanced scorecard has changed and grown significantly. The main goal of the balanced scorecard as described by Loreta Valančienė and Edita Gimžauskienė (2007) “is [to measure] consistency of organizational strategic goals and measures for their achievements”. Basically it takes into consideration other factors besides just financial reports and keeps all aspects of the business in line. An example of this
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