The Balanced Scorecard And How It Is Used For A Competitive Advantage Within The Business Industry

There are four perspectives when it comes to balanced scorecard. First one is learning and growth which means how the information and knowledge are processed and turned into competitive advantage against other companies. Second is about product manufacturing and making sure that all the products are made the same without any defaults. Third one is about customer satisfaction and making sure that customers are happy with product, service and price. Fourth one is about financial performance and making sure that company’s financial data is used properly.

“The balanced scorecard should translate a business unit’s mission and strategy into tangible objectives and measures. The measures represent a balance between external measures for shareholders and customers and internal measures of critical business processes, innovation and learning and growth. The measures are balance between outcome measures, the results of past efforts, and the measures that drive future performance. And the scorecard is balanced between objective, easily quantified outcome measures and subjective, somewhat judgmental, performance…”

A balanced scorecard is a performance measurement system, which takes into account the customers, internal business processes, learning and growth, as well as financial

The balanced scorecard is a strategic planning and management system that was developed by Dr. Robert S. Kaplan and Dr. David P. Norton in the early 1990's. Their goal was to provide organizations with a clear understanding of what to measure in order to improve performance and results (Balanced Scorecard Institute 2014). The balanced scorecard is a framework that allows an organization to measure performance and compare it to the organization’s strategic objectives and goals (Kinney and Raiborn 2013, 10).

The balanced scorecard shows the innovation, finance, learning and customers as well to gain the goals associated with this paradigm. In the second column the, measures are there to achieve the goals set in the first column. It extracted through management information knowledge and the environment scanning after research (Whitaker, 2016, pg 131).

The balanced scorecard now plays an important role in organization management. It has been further identified and used as an important tool in today 's business processes. According to Eric W. Noreen et al. (2002), "a balanced scorecard consists of an integrated set of performance measures that are derived from and support a company’s strategy. A strategy is essentially a theory about how to achieve the organization’s goals" (p. 551). Previously, management had been overwhelmed with data for a long

Performance management systems are often designed to enable organizations to plan, measure and control their performance, so that decisions, resources and activities can be better aligned with business strategies to achieve desired results and create shareholder value. The Balanced Scorecard is a performance tool using financial and nonfinancial measures. It provides an organization with ways to develop and evaluate strategic objectives and goals. For the past two decades, the Balanced Scorecard (BSC) has been proposed as an integrated framework for the implementation of

The leading organizations use performance measurement with the aim of gaining insights to their organizations and the efficiency of their people, programs and processes. The organizations do not only collect and analyze data but they also use performance management to transform various strategies into actions and to improve their operational processes (Northcott and Ma 'amora Taulapapa 2012). Accordingly, performance management is used to manage the organizations. The Balanced Scorecard (BSC) is a prominent performance management system in the contemporary world and it was developed by Dr. David Norton and Dr. Robert Kaplan at Harvard business school. Compared to other systems of measuring performance, the BSC considers various

A theory and management approach of the Balanced Scorecard was first “proposed in the Harvard Business Review by Robert S. Kaplan & David P. Norton (1995)” (Knapp, 2001). In the book called ‘The Balances Scorecard’ Kaplan and Norton (1996) translated organization’s mission and strategy into comprehensive set of performance measures. That

The point of the balanced scorecard is to move beyond financial measures for evaluating corporate performance. The underlying assumption of the model is that there are a number of outputs that contribute to the financial objectives, and those outputs can be classified as being oriented towards customers, learning and growth and internal processes. Niven (n.d.) notes that there are three main things that should be taken into consideration when developing strong measures for the customer perspective. The first is "who are the customers?", something that we will assume these organizations have answered. They may also wish to ask "who is not a customer but should be?" in order to drive growth in the business, but it is not a fault that they do not ask this. The second question is "what do our customers expect from us?" and the third

This research paper describes an overview of the theoretical background of the Balanced Scorecard as well as describing the historical foundation and the development of its theories.

The use of balanced scorecard has been developed from the early use as a simple performance measurement framework, a complete strategic planning and management systems. The "new"

Kaplan and Norton (1996c) defined Balanced Scorecard as a framework that helps organizations translates strategy into operational objectives that drive both behaviour and performance. They realized that although traditional financial performance measures worked well for the industrial era, but were proving to be insufficient in measuring the abilities and competencies essential for survival in changing economic environment. Traditional performance indicators tend to measure financial and accounting aspects, impacting long-term productivity and profits, whereas, Balanced Scorecard provides the measures of synthetic indicators which companies should focus on, such as customer reactions, profits, quality and flexible production selection (Martin,

“Putting the Balanced Scorecard to Work,” Robert S. Kaplan and David P. Norton, Harvard Business Review, September-October, 1993, pg 134-147.

) “A Balanced Scorecard system provides a basis for executing a good strategy well and managing change successfully.” Demonstrate the validity of this statement by selecting an organization of your own choice and showing how strategies can be transformed into objectives, measures, targets and initiatives. You should cover all four aspects of the balanced scorecard. [20 marks]