Analyzing Organizational Health: Balanced Scorecard Implementation

This report delves into the concept of managing organizational health, focusing on the Balanced Scorecard as a comprehensive performance measurement tool. The report begins by introducing the Balanced Scorecard, highlighting its ability to integrate financial and non-financial metrics for a holistic view of organizational performance. It emphasizes the importance of identifying strategic goals across various perspectives, including customers, shareholders, learning and innovation, and internal business methods. The report underscores the Balanced Scorecard's advantages, such as aligning performance measures with corporate strategy, considering the customer's viewpoint, and promoting accountability. It also explores the implementation of the Balanced Scorecard, emphasizing the need to consider industry-specific Key Performance Indicators (KPIs) and the significance of indicator relevance and availability. The report concludes by discussing the use of the Balanced Scorecard in managerial decision-making and goal-setting, while acknowledging the importance of adapting the approach to the specific context of the organization. The report also includes a comprehensive list of references.

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Managing Organizational Health
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The Balanced Scorecard is considered to be one of the most extensively used new
generation performance measurement methods. The first generations of the Balanced Scorecard
as a result, does the proposing of new avenues in respect of measurement methods via a planned
combination regarding financial as well as non-financial metrics having strategic propositions.
A Balanced Scorecard will be identifying the essential perspectives required for providing a
comprehensive view regarding the performance of the organization (Corbetta 2015). It will also
do the identification of the strategic goals regarding each of those perceptions as well as doing
the selection of the indicators as well as targets in respect of each of the goals. The objective of
the Balanced Scorecard is associated with the aspect of addressing the problems in relation to the
measurement of the performance regarding the organization (Anaboldi 2015). Majority of the
organizations at present are facing the challenges of taking a 360 degree view of performance
through the concentration on reporting, reviewing as well as acting in respect of a limited
number of Key Performance Indicators (KPIs) that will be impacting mostly upon the
organizational performance (Burstein 2014). A major area of study in relation to holistic
organizational performance management is considered to be the Balance Scorecard (Goble
2014). This was primarily introduced by Kaplan as well as Norton to be a better way to view the
performance of an organization.
It has been stated that majority of the companies do the adoption of a myopic short
termed as well as financially supported view regarding performance as stated in traditional
performance measures like sales, profit, return on capital employed, gross margin, return on
investment, net margin as well as residual income (Awadh 2013). By agreeing to the fact that the
financial performance of a company is an essential consideration, Kaplan and Norton also

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provided the argument that this narrow performance evaluation detracted from the long-term
strategic organizational development (Ferguson 2013).
It was also advocated by them that there should occur the achievement of more balance in
ways by which there occurs the viewing of performance amongst financial and non-financial
measures as well as long-term and short-term measures (Ates 2013). For achieving this balance,
Kaplan and Norton advocated that there should occur the consideration of performance from four
different perspectives such as customers, shareholders, learning and innovation as well as
internal business methods (Upadhay 2014). Regarding the customers, it can be stated in what
ways the company will perform in the eyes of consumers. In respect of learning & innovation, it
is required considering the performance necessary for ensuring the long-term organizational
growth (Lin 2013). The shareholders are concerned with the financial performance measures and
the internal business methods will be explaining in what ways the organization performs in
carrying out daily methods in an effective as well as efficient manner (Person 2013).
It is necessary to advice clients in what ways the Balance Scorecard approach will get
implemented regarding performance management as well as suggesting what Key Performance
Indicators needs to be taken into consideration in respect of the specific industry of the client
(Matthews 2015).
It needs to be noted here that the suggested scorecard will be concentrating on a finite
number of industry specific KPIs (Peters 2013).
The advantages associated with the adoption of a Balanced Scorecard approach regarding
performance management might be including the following aspects such as, creating a longer
term strategic performance view in comparison to a myopic short-term view (Tjader 2014). Also,

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organizations will be developing performance measures that are having an explicit alignment to
the corporate strategy and in support thereof (Sainaghi 2013). It is required considering the
viewpoint of the customer that is essential regarding business. It widens the divisional manager’s
view as to what will be representing better performance away from an exclusively financially
oriented view. A Balanced Scorecard can do the promotion of accountability as each measure of
performance could be the responsibility regarding a nominated individual (Perkins 2014).
Moreover, the aspect of implementing the balanced scorecard should be comparatively simple as
well as understandable.
Along with any performance management system, the Balanced Scorecard is having multiple
uses. It will be getting used, for instance, towards the facilitation of the managerial decision-
making, either in an individual manner or as a team, by putting emphasis on planning, policy
focus, detecting the signs relating to warning or scopes, or to monitor remedial actions and so on
(Jelsma 2015). Balanced Scorecard might be used as well for ensuring comparison of goals
amongst the levels of management, by concentrating on factors like accountability, assessment as
well as incentive processes (Keyes 2016).
It is often stated that the Balanced Scorecard needs to be used for pursuing both objectives in
a simultaneous manner. Also, when the Balanced Scorecard is utilised to plan as well as facilitate
the making of decisions, it would be considered coherent in extending its use regarding the
setting of goal as well, and to do the tying of the evaluation of the managers as well as
compensating their degree of success in actualizing those objectives (Grant 2016). While doing
the implementation of the Balanced Scorecard, a company is required assessing the significance
of these considerations in their specific context (Hoque 2014). Whenever there will occur the
implementation of a Balanced Scorecard, it is essential in noting that the Balanced Scorecard

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might get used both in facilitating the making of decisions and as a source to evaluate as well as
fix the incentives.
The performance measurement is considered being an intrinsic objective of the Balanced
Scorecard. Therefore, it is necessary to do the utilization of the pertinent indicators. The
Balanced Scorecard, as a result is having the requirement for being specifically susceptible
regarding two issues such as the significance as well as availability of indicators (Burstein 2014).
The relevance of an indicator is having the concern regarding issues stating if it is amply
sensitive as well as specific towards the measurement of performance (Morone 2014).
To take into consideration the implementation of the Balanced Scorecard as a tool of
management in an organization, it is necessary for taking into account the particularities of the
sector. The Balanced Scorecard did subsequent evolving toward the aspect of incorporating the
strategy maps such as the shared mental maps relating to the cause-effect order doing the
representation of the company’s business model.

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