“Balanced Scorecard” System (BSC) is a strategic management concept introduced by Robert Kaplan and David Norton in the early 1990s. The Balanced Scorecard (BSC) contains both financial and operational measures on customer satisfaction, internal processes, and innovation and organizational improvement activities (Kaplan, Norton, 1992).
For managers, BSC identify a comprehensive vision of their company's strategic objectives and a set of measures to improve the its strategic performance. The BSC is either a complex management tool (Ahn, 2001) or a strategic management tool (Hueng, 2000; Pforsich, 2005). BSC's specialized articles analyze and promote the Balanced Scorecard as a performance measurement tool, as a performance management system,
…show more content…
The above-mentioned strategic scheme should communicate how to create value for the company, respectively, progressively present the logical link between the strategic objectives (presented as schema ovals) in the form of a cause-effect chain. Generally speaking, improving performance in the found goals, from the perspective of Organizational Capacity (bottom row), allows the organization to improve the Goals from the perspective of Internal Processes (the next line up), which in turn allows the organization to create desired outcomes Clients and Finance (the first two lines).
However, BSC, as initially introduced by Kaplan and Norton, has some weaknesses with some of its main hypotheses and relationships highlighted by many authors in the literature. Norreklit states that there is no causality, but rather a logical relationship between the strategic perspectives analyzed. Moreover, the BSC is not a representative tool of strategic management because it does not take into account any link between the organization and competition. Consequently, a discrepancy should be allowed between the company's ongoing strategy and the assumed
“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…”
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).
Introduction- To be competitive, organizations must be both strategic and tactical to the nth degree, must be proactive rather than reactive, and must find a way to measure this easily and accurately. One way to accomplish this is through a Balanced Scorecard approach; a tool often viewed as one of the best tools that helps organizations translate strategy into performance. In general the BSA (Balanced Scorecard Approach) allows for a clear strategic and tactical directions for the organization, retains financial measurements in a summation along with their links to performance, and highlights an important and robust measurement system that links and integrates customers, stakeholders, processes, resources, and performance into single measurement strategy.
Balanced Scorecard is a general methodology that is being used to improve performance within strategic
The Balance Scorecard (BSC) was originated by Robert Kaplan and David Norton in the early 1990 's as a strategic approach, and performance management system that would enable organisations to translate a company 's vision and strategy into implementation. It essentially gives managers and executives a more balanced ' view of the company 's
Balanced scorecard—A coherent set of performance measures organised into four categories. It includes traditional financial measures, but adds customer, internal business process, and learning and growth perspectives. It was developed by Robert S. Kaplan and David P. Norton in 1992. Benchmarking—A systematic approach to comparing an organisation’s performance
Organizations today use different methods to analyze and implement strategic plans and various types of the management systems. The balanced scorecard is one such tool which is used by many businesses belonging to various industries across the globe, and also by government and nonprofit organizations as well. It was created by Drs. Robert Kaplan and David
Quality and the Balanced Scorecard Approach: Customer satisfaction, both internal and external, is an important component of a Balanced Scorecard. A Balanced Scorecard approach (BSA) is often seen as one of the key tools that translate strategy into performance. The balanced scorecard model is a clear direction outlining what the organization should measure to balance the financial output. The scorecard retains financial measurement as a summary of their business performance (Kocakulah and Austill, 2007). Moreover, the scorecard will highlight an integrated set of measurement that will link customers, processes, resources, and performance to long-term financial success. The balanced scorecard is a tool that provides the company the framework that translates vision and strategy into actionable tasks. The scorecard is a set of performance measures allowing management a dashboard view of their business. These performance measurements are used to aid the company in setting goals and manage the business's
The balanced scorecard is a strategic measurement strategy used in business and government as a measurement tool. The balanced scorecard should reflect businesses plans and strategic goals. The balance scorecard “was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton (n.n October 8th, 2015). Balanced scorecard is used by managers not only to measure performance but to align their goals and execute the visions and missions of any agency. The balanced scorecard include metrics in different perspective views, these include “The learning and growth perspective, the business process perspective, the customer perspective and the financial perspective”.
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
Kaplan and David P. Norton stated that the balanced scorecard is defined as the translation of 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, R.S. and Norton, D.P. 1996)
Balanced Scorecard is a strategic performance management framework that helps organizations to align strategies with both financial and non-financial measures to monitor progress, measure performance, prioritize and reveal improvement opportunities (Henderson, Gary & Mittl). BSC is generally implemented at the corporate level, but it is useful for all levels of the organization. It should not only act as an information system for corporate management, but form a basis for encouraging behavioral change in the organization in order to conform to the vision and
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:
The Balanced Scorecard (BSC) is a performance measurement tool that originated in the business worlds. Performance measurement is a way to track performance over time to assess if goals are being met. Organizations measure their performance to monitor how they’re doing in achieving their overall mission and goals.
Facing the changing of enterprise external environment, it asks for managers should stand at the height of strategic management to makes an overall plan for the development of the enterprise. The Balanced Scorecard (BSC) has great advantages in the link of enterprise strategy and performance management. It covers strategic areas, and includes human resource management. However, it has many shortages and theoretical defect.