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Balanced Score Card

The balanced scorecard is a strategic planning and management system used to align business activities with organizational vision and strategies. It monitors performance against strategic goals using four perspectives: learning and growth, business processes, customers, and finance. The learning and growth perspective addresses employee training and culture for improvement. The business processes perspective focuses on internal processes and conforming to customer needs. The customer perspective emphasizes understanding and satisfying customer wants. The financial perspective considers shareholders' desired financial goals. Kaplan and Norton defined a four-step process to develop a balanced scorecard: define measurement architecture, specify strategic objectives, choose strategic measures, and develop an implementation plan. The balanced scorecard allows business leaders to align strategy across the organization through a single picture that goes

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20 views

Balanced Score Card

The balanced scorecard is a strategic planning and management system used to align business activities with organizational vision and strategies. It monitors performance against strategic goals using four perspectives: learning and growth, business processes, customers, and finance. The learning and growth perspective addresses employee training and culture for improvement. The business processes perspective focuses on internal processes and conforming to customer needs. The customer perspective emphasizes understanding and satisfying customer wants. The financial perspective considers shareholders' desired financial goals. Kaplan and Norton defined a four-step process to develop a balanced scorecard: define measurement architecture, specify strategic objectives, choose strategic measures, and develop an implementation plan. The balanced scorecard allows business leaders to align strategy across the organization through a single picture that goes

Uploaded by

ritikanathani
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BALANCED SCORE CARD

The balanced score card is a strategic planning and management system that is used to align business activities to the vision and strategies of the organisation and monitor organisation performance against strategic goals. Good business leaders are ones who provide both strategic vision and ensure that the strategy is implemented. But in an organisation less that 10% of the strategies are implemented due to problems of strategy implementation. Business score card provide a way of focussing attention on what needs to be done. The Balanced score card suggest that we view the organisation from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives.

THE LEARNING AND GROWTH PERSPECTIVEIt includes employee training and corporate cultural attitudes related to both individual and corporate self improvement. It addresses the question how the firm must learn , improve and innovate in order to meet it s objectives. In the current climate of rapid technological change, it is becoming necessary for workers to be in a continuous learning mode. It includes mentors and tutors inside the organisation , as well as the ease of communication among the workers that allows them to readily get help on a problem when it is needed.

THE BUSINESS PROCESS PERSPECTIVEIt refers to internal business process. The focus is on how well the business is running and whether it s products and services conform to customer needs. It s objective address the question of which processes are most crucial for satisfying customers and shareholders. These are the processes in which the firm must concentrate it s effort to excel.

THE CUSTOMER PERSPECTIVEThe recent trends have proved that customer is GOD . If they are not satisfied they will eventually find other suppliers to satisfy their needs. So more importance is given to customer focus and customer satisfaction. The

emphasis is on what the customer wants and how well is the organisation able to provide it..

THE FINANCIAL PERSPECTIVEThe traditional need for financial data cannot be discarded. Timely and accurate funding data will always be a necessity. It addresses the question of how shareholders view the firm and which fi nancial goals are desired by them.

THE PROCESS OF BUILDING BUSINESS SCORE CARDKaplan and Norton defined a four step process to develop a balanced score card. 1. 2. 3. 4. Define measurement architecture. Specify strategic objectives. Choose strategic measures. Develop the implementation plan.

By focussing on four areas instead of one the chances are greater that the organisation will succeed in the long run. It allows business leaders to pull together the strategy into one single picture without the traditional focus on profit. Since it s beginning as a performance measurement system , the balanced score card has evolved into a strategy implementation system that not only measures performance but also describes, communicates, and allings the strategy throughout the organisation.

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