Working With Complex Business Environment

Traditional management systems rely on financial measures, which bear little relation to progress in achieving long-term strategic objectives. The scorecard introduces

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

A balanced scorecard is a tool to provide management a way to bridge the gap between the organization’s strategy and vision and the operational processes used to do business. It enables the company to look at more than just the financial targets, but to include nonfinancial measures such as customer service, internal business processes and more. These intangible measures provide better focus on the organization’s long-term strategies. This paper is an attempt to analyze Frieda Fizz decision to utilize a balanced scorecard as they expand into new geographic areas. The strengths and weaknesses of each perspective are discussed along with the pros and cons of using

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 (BSC) is thoroughly sustainable. Because when the proper management can be done and when the formulation process can be done impeccably, then the sustainable Balanced Scorecard (BSC) can be incorporated. There are some sorts of features that may help in maintaining the sustainability. The perspectives should also be well–formulated. The financial and customer’s attitude helps in maintaining the total business organization perfectly and then the internal business process can be run in a perfect manner so that the sustainability can be measured. Besides, the point is the Balanced Scorecard (BSC) is sustainable universally and it can be used in any moment to pursue the performance measurement activities.

Lipe and Salterio after considering the above issues and theories want to assess if Slovic and MacPhillamys (1974) findings are directly transferable to a BSC scenario, they have reasons to believe that the reliance on common measures may not be so obvious with regard to BSC results; due to managers better understanding their business units and being able to analyse them individually should reduce their emphasis on common measures.

The balanced scorecard is a strategic management system that helps guide corporate strategy to meet a number of disparate objectives (BSI, 2011). It does this by highlighting for managers the key objectives in a number of areas in order to find the strategy that best meets all of the objectives. These areas are the financial, customer, learning and growth, and internal business processes. Kaplan and Norton (2004) make the case that in order to create value, three behaviors are important focusing on the customer, being creative and innovative and delivering results. Most of the measures in the balanced scorecard will relate to this underlying philosophy.

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

In the modern business and organizational environment, particularly as a result of globalization, competition equates performance. 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. This tool also provides the organization with a tool that takes vision and moves it to strategy, and the conversely, strategy into tactics. BSA supports planning and unites the organization into a more singular vision and common goal. It also allows for both internal and external feedback so that performances and results continue to evolve and improve.

Organizations have adapted the BSC to their particular external and internal circumstances. Both commercial and notfor-profit organizations have successfully used the BSC framework. Since 1992, Drs. Kaplan and Norton have studied the success of various applications of the BSC in different types of organizations. Companies have used as few as four measures and as many as several hundred measures when designing a BSC performance measurement system. Based on this research, it has been found that a BSC framework using about 20–25 measures is the usual recommended best practice. Smaller organizations might use fewer measures, but it is generally not advisable to go beyond a total of 25 measures for any single organization, holding company, or conglomerate group of holding companies.

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 Balanced Scorecard has emerged in recent years as a performance measurement system in various organizations. This paper will discuss the origin and concept of the balanced scorecard and how it was first implemented. We will then review the criticisms on the balanced scorecard methodology as well as analyse the strengths and weaknesses of this performance measurement tool.

The balance score card is a tool of strategy performance management, which objective was to bring business activities into step with the strategy of organization and monitor its performance against strategic goals, was developed by Kaplan and Norton (1992). Over the past few decades, a large proportion of FTSE 100 companies have implemented the BSC (Hendricks, 2004). At present, hundreds of thousands of organizations in various domains, such as private and public, complied with this international trend (Kaplan, 2010).

The Balanced Scorecard is a strategic measurement approach that provides a method of aligning business activities with the organization's strategic plan and monitoring performance of strategic goals over time. A set of balanced measures is used, rather than focusing on the single, traditional bottom line. The original scorecard developed by Kaplan and Norton (2004) was divided into five perspectives (or measurement areas):

The world is changing, so is the business world. For companies, it is inevitable to confront with the transforming economics. There have been increasing companies find that the traditional performance measurement approaches seems to be obsolete to reflect their performance, missions and strategy objectives all rounded. For adapting to the new market and better understanding the management process, improved performance measurement tool has arisen to keep pace with the changing economic world. (Dumitrescu and Fuciu, 2009) - The Balanced Scorecard (BSC), which is described as one of the most innovative business frameworks in the contemporary history of management accounting. (Busco and Quattrone, 2015) The essay will firstly illustrate the origins of and the rise to prominence of the BSC, then demonstrate the approach to performance measurement and the advantages it offers, finally explain the limitations of the BSC.