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BALANCE SCORECARD
IntroductionBalanced Scorecard is considered as the important aspect of the management. A balancedscorecard is a new approach to strategic management which was developed in 1990 by RobertKaplan or David Norton. On the basis of vagueness and weakness of previous managementapproaches, balanced scorecard approach highlights clear prescriptions of the financialperspective of a business organization (Kaplan, 1996). The main motive of this paper is toinvestigate the role of the scorecard in enhancing and improving the performance of anorganization. Balanced scorecard mainly represents a central list of numbers which describeevery part of organization's success like people, financials, suppliers, customers, and operation.The represented number not only shows the important outcomes but also highlights the variousfactors which influence these outcomes significantly.The balanced scorecard is a popular system of management which permits the organizations torecognize their vision and strategy and interpret them into action. For improving the strategicposition of a balanced organization balanced, scorecard provides feedback of both the internalbusiness processes and the external business processes (Kopecka, 2015). The BalancedScorecard views the organization from four perspectives, namely, perspective related to thebusiness process, perspective related to the growth process, different customer perspective, andfinancial perspective. All these perspectives are shown in the following figure:1
Balanced Scorecard and Organization PerformanceThe balanced scorecard is considered as a framework of performance management activitieswhich establish a suitable link between the day to day operations of a business organization andits strategy. Balanced scorecard provides a holistic view of the organization which is designed onthe basis of organization objectives. The organizations can build a balanced scorecard for themafter enforcing their strategic objectives which describe the whole functioning of theorganization. As and when the organization prescribes its four balanced scorecard perspectives, itcan choose different measures for fulfilling the predetermined objectives. These measures of thebalanced scorecard represent the quantitative indicators of an organization which indicates howthe performance of a strategic objective can be fulfilled (Lueg, 2013).The proper functioning of the organization can be supplemented by the balanced scorecardapproach. The use of non-traditional financial measures and the traditional financial measuresthat mainly focus on three other perspectives known as internal business processes, customers’perspective and learning and growth perspective can be preferred.The balanced scorecard mainly helps the organization in fixing the compensation of theemployees that will be a motivating factor for the employees. This will play an important role in2
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