The Performance Measurement Of The Balanced Scorecard

The Balanced Scorecard framework was first introduced in the 1992 Harvard Business review article, ‘The Balanced Scorecard—Measures that Drive Performance.’ (Kaplan 2006) The purpose of the Balanced Scorecard is to harmonise the corporation’s strategy, operational objectives and performance measures so that they can be controlled to achieve goals. (Stevanovic et al. 2012, p.261) The BSC can be conceptualized as, “…a management system, which is structured according to the logic of the cyber-netic management circle (“plan-do-check-act”) (Bieker 2002, p.2) The model usually measures four core domains organised into quadrants; the customer perspective, internal business perspective, innovation and learning perspective, and the financial perspective. Each closely relating to a recognised aspect of firm performance. (Kaplan & Norton 2005) As seen in the figure below, the scorecard is organised such that the interrelationship between these variables as well as comparison between goals and measures are easily seen.

easu e e t tool: a o e ie of its usage a d sustai a ility

A balanced scorecard is a method company’s use to measure their performance. It includes objectives, strategies, and tactics. This paper will contain two strategic objectives for each of the four balanced scorecard areas (shareholder value or financial perspective, customer value perspective, process or internal perspective, and learning and growth perspective) for H & R Block. It will also have two strategies for every objective, one tactic for each strategy, and two methods to monitor and control the overall strategic plan for H&R Block.

A balanced scorecard derives its name from the perceived need of firms to balance financial measures that are oftentimes used exclusively in strategy evaluation and control with nonfinancial measures such as product quality and customer service. An effective Balanced Scorecard contains a carefully chosen combination of strategic and financial objectives tailored to the company’s business. (David & David, 2017) Auditing is defined as a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established

The article I decided to critique for the purpose on management accounting 2 is by Marlys Lipe and Steven Salterio. There article entitled ‘The Balanced Scorecard: Judgmental Effects of Common and Unique Performance Measures ' came from the July 2000 edition of the Accounting Review journal.

The connotation of the Balanced Scorecard shown that not just in the past performance, to put more time on future performance

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,

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 Score Card’ is a strategic performance management system that allows an organization to translate its Vision, Mission, Values and Strategies by providing a new framework, one that tells the story of the organisation’s strategy through the

A balanced scorecard can be thought of as a strategic management tool, which the management of various organizations can use to monitor how the activities of employees affect the related operations. The origin of the concept can be traced back to the 1990s when Robert Kaplan and David Norton developed and published the idea in Harvard review journal. It can transform a company’s mission and vision into objectives, which can be quantified and measured. Therefore, it can quantify financial performance, the performance of business processes in the market, innovation performance, and employee performance among others. This tool can further be defined by two characteristics. Firstly, it focuses on organizations ' main agenda. Secondly, it uses a small number of data to measure various processes. This paper seeks to determine the ideal inputs for the four major elements of the Balanced Scorecard.

The Balance Scorecard(BSC) model assist managers and board of directors to manage overall business by focusing into financial factors ( Profitability, cost, revenue, budgeted cost and real cost etc) as well as non-financial factors such as customer satisfaction, internal business process, innovation, learning and growth of organization. Kaplan and Norton decided to introduce concept of BSC in 1992, when they studied belief of famous British scientist, Lord Kelvin (1990) about performance improvement. As a result of this, many companies (private, public and non-profit organizations) adopted balance scorecard (BSC) model to assess their business performance. The BSC model is still used by many organizations. For-example, TESCO plc manages their business by applying BSC model. In my view, this article provides the chance to senior managers and directors who have power to influence the business performance. However, this article did not cover other important factors, for measuring the business (marketing strategies, employee satisfaction etc) to make sure how business is performing. Therefore, I have chosen this article for critical review.

Definition of what comprised a Balanced Scorecard was sparse and focused on the high level structure of the device. Simple ‘causality’ between the four perspectives was illustrated but not used for specific purpose. Kaplan and Norton’s original paper’s focus was on the selection and reporting of a limited number of measures in each of the four perspectives (Kaplan and Norton, 1992). The paper suggested use of attitudinal questions relating to the vision and goals of the organisation to help in the selection of measures to be used, and also encouraged the consideration of ‘typical’ areas of interest in this process. Kaplan and Norton’s original work makes no specific observations concerning how the Balanced Scorecard might improve the performance of organisations; the implication is that the provision of

“Balance Scorecard is a flexible, not a narrow model, approving various organization to identify key performance pointers that support their strategy”. It is applied to every sector of organisation, rather public or private, to align for people, planning and task performs.

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) 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

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.