Balance Score Card: Evaluating Company Performance - A Detailed Report

This report provides an overview of the Balance Score Card (BSC) as a performance measurement tool for companies. It begins by introducing the BSC and its purpose in evaluating overall company performance across four key areas: business processes, customers, growth and learning, and finance. The report then evaluates the BSC's effectiveness, highlighting its ability to provide a comprehensive view of performance beyond financial metrics, but also acknowledging its limitations, such as the need for regular modifications and potential biases. The report further discusses the application of the BSC in non-profit and public organizations, emphasizing its usefulness in categorizing objectives, determining priorities, and attracting funds by establishing a clear strategic framework. It also includes a list of relevant references supporting the discussed concepts. This document is contributed by a student and is available on Desklib, a platform offering AI-based study tools for students.

Running head: BALANCE SCORE CARD
Balance Score Card
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Table of Contents
Introduction......................................................................................................................................2
Evaluation of BSC as a measure of company’s performances........................................................2
BSC in Non-profit/Public organizations..........................................................................................3
References........................................................................................................................................5

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Introduction
The Balance Score Card is one of the most widely used performance metric which are
used in different commercial institutions, which is used as an inclusive tool in the management
framework of the companies. The main purpose of the usage of balance scorecard is to assess the
overall performance of the concerned company and to identify the areas where improvements
and modifications can be done based on the relevant data collected and analyzed with the help of
the tool. This is done by dividing the operational framework of the company in four separate
parts or legs under the balance score card, which are namely, the processes of business,
customers, growth and learning and finance (Kaplan 2012).
Evaluation of BSC as a measure of company’s performances
For any organization to maintain a stable growth and prosper sustainably it is of crucial
importance to have track of its activities. The company thus needs a measure of its overall
performances and the areas where it needs to emphasize and modify. The BSC, in this aspect, is
one of the integrating measures of the overall performance of the company, which measures the
performances of the concerned organization, not only in terms of financial prosperity and
efficiency but also on an overall term, including the perspectives of the consumers, internal
business operations (Madsen and Stenheim 2014). It also emphasizes on the aspects, which can
be improved by the same for creation of greater value in future. It also helps in assessing the
performances of the individual employees and their contribution to the profitability of the
organization as a whole.

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However, there are several problems crops up while implementing the BSC method,
especially in the current dynamic environment of global business framework, where the
businesses experience dynamics in their operational framework daily. This high volatility in turn
demands regular modifications in the BSC, which becomes a time and cost increasing activity on
part of the organizations. There can also remain different perspectives in the operational
framework of the organizations which cannot be assessed under the four broad categories
designed under BSC, thereby making the evaluations using the BSC method incomplete and to
some extent biased (Northcott and Ma'amora Taulapapa 2012). For instance, the recent concepts
of corporate social responsibility, environmental contributions of the companies and others are
highly overlooked in this method, but are of immense importance in the contemporary global
business scenario.
BSC in Non-profit/Public organizations
In spite of its limitations, the Balance Score Card method still appears to be a
comprehensive indicator for performance measurement of organizations in general and there
remains several aspects, which asserts the need for implementation of the same in the non-profit
or public organizations also.
Success- Although these organizations are not profit oriented, however, the BSC can also help
the same in categorizing their objectives and their performance in the same aspect. BSC can help
them in determining their priorities and work according to the same.
Promotion- With the help of a proper BSC, the companies can map the objectives and the goals
of the same and the strategies taken to achieve the goals. This in turn can help these
organizations to market their campaigns more attractive, thereby attracting interested people.

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Fund collection- The presence of BSC in these organizations, by helping them to demarcate
their goals, missions and procedures can help the same to collect funds as the presence of clear
strategic framework can help the same to attract serious donors (Nørreklit et al. 2012).

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References
Kaplan, R.S., 2012. The balanced scorecard: comments on balanced scorecard
commentaries. Journal of Accounting & Organizational Change, 8(4), pp.539-545.
Madsen, D. and Stenheim, T., 2014. Perceived benefits of balanced scorecard implementation:
some preliminary evidence.
Nørreklit, H., Nørreklit, L., Mitchell, F. and Bjørnenak, T., 2012. The rise of the balanced
scorecard! Relevance regained?. Journal of Accounting & Organizational Change, 8(4), pp.490-
510.
Northcott, D. and Ma'amora Taulapapa, T., 2012. Using the balanced scorecard to manage
performance in public sector organizations: Issues and challenges. International Journal of
Public Sector Management, 25(3), pp.166-191.