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In the paper it is shown that the Balanced Business Scorecard (BSC) allows a
balance between financial and non financial objectives and performs a quantification of the
dimensions of strategy in four areas - financial, customers, processes and potential.
Moreover, the BSC provides feedback on internal processes and external outcomes in order
to improve further the performance and results in terms of strategy. When the Balanced
Scorecard is implemented effectively, can transform strategic planning from an academic
exercise in the central nervous of the entire company.

Keywords: strategy, financial objectives, non financial objectives, Balanced

Business Scorecard, performance measurement

În lucrare se arat c Balanced Business Scorecard (BSC) permite un echilibru

intre obiectivele financiare si non financiare si realizeaza o cuantificare a dimensiunilor
strategiei in cele patru domenii - financiar, clienti, procese si potential. Mai mult, BSC
ofera feed-back cu privire la procesele interne si la rezultatele externe in scopul
imbunatatirii continue a performantelor si rezultatelor din punct de vedere al strategiei.
Atunci cand Balanced Scorecard este implementat eficace, poate transforma planificarea
strategica dintr-un exercitiu academic in centrul nervos al intregii companii.

Cuvinte-cheie: strategie, obiective financiare, obiective non financiare, Balanced

Business Scorecard, m surarea performan ei

JEL Classification: O21

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sustained competitive success can be achieved today only if a company

is flexible, adapting quickly to the market. This involves organizational
structures based on processes that reflect if this is necessary dynamics
and future market position held. Most companies try to adapt in terms of flexibility of all
changes on the market to maintain market position.
In today’s world of rapid change and unforgiving competition, a myriad of
leadership challenges face the business executive:
♦ The increasing need for speed
♦ The need for alignment across the organization
♦ The need to focus on action and results
♦ The need for better ways to measure the health and success of the
organization
♦ The need to attract and retain the right staff in an increasingly competitive
environment
Strategy is of critical importance in today's business environment of rapid change
and unforgiving competition. Many organizations devote extensive resources to developing
a winning strategy, then wonder why they aren't winning. Organizations fail to realize the
benefits of a good strategy for a variety of reasons:
♦ Failure to implement the strategy - They develop an excellent plan, then it sits
on the shelf.
♦ Failure to communicate the strategy - Senior management understands the
strategy, but the line personnel who interact with customers on a daily basis
have no idea what their role is in implementing the strategy and contributing
to corporate goals.
♦ Failure to translate the strategy into actionable initiatives - Managers treat
strategy development as an annoying interruption that takes time away from
doing business. They fail to devote the time and effort necessary to translate
the high level strategy into tactical initiatives that drive change on an
operational level.

The balanced scorecard provides a framework for translating strategy into action
into results. Its benefits include the following:
♦ Alignment - The balanced scorecard provides a mechanism for aligning the
various activities, processes, and groups throughout the organization with the
strategic goals and objectives.
♦ Communication - The balanced scorecard and the decisions and actions that it
drives become a mutually reinforcing, highly visible way to communicate the
strategy throughout the enterprise.
♦ Accountability - The balanced scorecard links individual performance to
corporate strategy and provides a constructive mechanism for holding people
accountable for results.
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♦ Individual contributions - As managers and individuals throughout the

organization come to understand the strategy and how their performance
contributes to success, they are able to exploit circumstances and make
independent decisions that contribute to the strategy in ways never anticipated
by the drafters of the strategy.
♦ Transformation - As people work together to achieve common objectives, the
balanced scorecard provides leverage and becomes a multiplier. As
performance is reported throughout the organization, the feedback process
becomes a mechanism to transfer knowledge and to refine and modify the
strategy based on facts and insights of people throughout the enterprise.
Strategy development becomes an ongoing, dynamic process that can evolve
readily in response to changing circumstances, new ideas etc.

The balanced scorecard is a performance management framework that links

strategy with day-to-day operations. It provides a holistic view of the enterprise based on
the business objectives. The balanced scorecard consists of a set of performance measures
that give a comprehensive view of the company based on four perspectives (Figure 1).

Financial To succeed financially,

Goal Measure Target Initiative how should we appear
to our shareholders?

Customer Internal Business Process

Goal Measure Target Initiative Vision and Goal Measure Target Initiative

Mission

To achieve our To satisfy our

vision, how should Learning and Growth shareholders and
we appear to our Goal Measure Target Initiative customers, at what
customers? business processes must
we excel?

To achieve our vision, how will we

sustain our ability to change and
Adapted from Kaplan and Norton improve?

Figure 1. Balanced Business Scorecard

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♦ Financial perspective, including traditional financial measures such as

revenue growth, return on investment or return on assets, market share, and
earnings per share,
♦ Customer perspective, with measures of importance to customers such as
timeliness, quality, performance, cost, and service,
♦ Internal business process perspective, with measures of the critical internal
activities and processes that the organization uses to meet its customers'
expectations, and
♦ Learning and growth perspective, which measures the organization's ability to
adapt and innovate for the future; this could include time to market for new
product development, workforce training and development, and process
improvement.
These perspectives provide a multi-dimensional balance between internal and
external perspectives, leading versus lagging indicators, objective versus subjective
measures, current versus future needs etc. Tradeoffs become explicit business decisions
based on strategy.

Kaplan R.S. and Norton D.P. (1992). “The Balanced Scorecard - Measures That Drive
Performance”, Harvard Business Review, Vol.70, Jan-Feb
Kaplan R.S. and Norton D.P. (1993). “Putting the Balanced Scorecard to Work”, Harvard
Business Review, Sept-Oct
Kaplan R.S. and Norton D.P. (1996). Translating Strategy into Action, HBS Press, USA
Kaplan R.S. and Norton D.P. (2000). The Strategy Focused Organization, HBS Press, USA