Overview Of The Balanced Scorecard

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1. Overview of the Balanced Scorecard Organisations, in order to increase performance, profitability, efficiency and to gain a competitive advantage, will benefit from a good strategic performance measurement system to ensure that lower-level managers are acting in a way that is consistent with top managers’ goals and whole organisation’s strategy. One the dominant system is the balanced scorecard framework (Hill, Jones & Schilling, 2015, p.376). The Balanced Scorecard (BSC) is defined as “a tool that translates an organisation’s mission, objectives and strategies into performance measures. It is used to implement strategy and to monitor and manage performance, and may form part of the organisation’s planning cycle” (Smith et al, 2015, p.621). The BSC allows managers to look at an organisation from four important perspectives, financial, customer, internal business, and employee learning and growth, which are critical for running the organisation and creating value (Smith et al, 2015, p.621). The BSC performance measurement system delivers the following benefits, it: • Transforms organisation’s strategy into operations • Brings into line everyone day-to-day work in organisation to strategy • Synthesis financial and non-financial reporting • Indicates and focuses on important objectives and its measures • Concentrates on organisation’s strategy and critical success factors • Enhances communication within organisation and provides wider organisation’s vision understanding
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