Putting Balance Scorecard to Work- Critical Analysis

920 WordsAug 25, 20104 Pages
In this article Kaplan and Norton have talked about implementation of Balanced Scorecard as a management tool which provides executives with a comprehensive framework translating company's strategic objectives into a coherent set of performance measures. They argued that by only looking at the financial returns the managers will fail to get overall strategic view of the company. The balanced scorecard helps in understanding organization's strategic objectives and operational processes. The different perspectives which balance scorecard looks at are: 1. Financial Perspective – How does firm look to the shareholders? 2. Customer Perspective – It addresses what the customers expect. 3. Internal business perspective – It help the…show more content…
6. Third Round Executive Workshop - The final agreement on vision, objectives, and measurements which were developed in the first two workshops. 7. Implementation - The team develops the implementation plan for the scorecard. 8. Periodic Reviews - Scorecard usage on monthly/ quarterly basis and annual review. Strength and Weakness of arguments in article The four perspectives - The holistic approach of financial and non financial measures facilitate understanding how performance is created within the firm and also serves as indicator for future strategies. This is possible as Balance Scorecard serves as input to the creation of strategy maps for the organization with focus on internal learning and growth to drive financial profitability and value to stakeholders. However, the perspectives do not represent the interest of all the stakeholders as suppliers, competitors, government, local communities and environment receive little attention in implementation of a balance scorecard. These factors are also critical for performance management and strategic objectives of the company. Further, Balanced Scorecard seems to represent a static model without the dimension of time and thus establishing cause and effect relationship between different perspectives becomes difficult. BSC as top down reflection of company’s mission and strategy - The Balance scorecard at corporate level provides the inputs for performance measurement at business unit level and
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