Objectives Of A Balanced Scorecard

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Introduction The balanced scorecard consists of four critical performance measures that managers can use to align their company’s initiatives with organizational strategy. It is one of the most important developments in management accounting, particularly in strategic planning and control because it offers a balanced view of how non-financial and financial measures can be casually linked together (Shutibhinyo, 2014). The purpose of this research paper is to provide a brief history of the balanced scorecard, the components of a balanced scorecard, and finally an in-depth comparative analysis of how two companies use the balanced scorecard to meet its strategic objectives.
Origins of the Balanced Scorecard Robert S. Kaplan and David P. Norton developed the first balanced scorecard in the early 1990s. Kaplan and Norton identify the balanced scorecard as “translating 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 and Norton, 1996). The balanced scorecard is a tool in which managers can focus attention on four critical performance measures: financial perspective, customer perspective, process perspective, and learning and growth perspective (Kaplan and Norton, 1996). However, the first balanced scorecard that was published did not demonstrate to managers how the four strategic objectives fit to form the company’s overall strategy. In other
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