Balance Scorecard: A Comprehensive Performance Evaluation Report

This report provides a comprehensive analysis of the Balance Scorecard, a strategic management tool used to translate organizational goals into performance metrics. It examines the four key perspectives of the Balance Scorecard: financial, business processes, customer, and learning and growth. The report discusses how these perspectives help in evaluating and improving organizational performance. It also explores the advantages of using a Balance Scorecard, such as aligning strategic management and facilitating effective communication. Furthermore, it highlights the application of the Balance Scorecard in various contexts, including public agencies and non-government firms, and it concludes by emphasizing its role in ensuring effective strategy implementation and performance measurement. The report also includes a discussion on different types of capital and their representation within the Balance Scorecard framework, such as natural, human, social, manufactured, and financial capital. Finally, the report acknowledges the limitations of the Balance Scorecard, such as its potential rigidity, and the need for effective leadership to measure company performance.

Running head: BALANCE SCORE CARD
Balance Score Card
Name of the Student
Name of the University
Author’s Note

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BALANCE SCORE CARD
Introduction
Balance scorecard can be considered as a specific system of management that mainly
aims at translating strategic goals of a corporation into a set of performance goals. The identified
performance goals necessarily are enumerated, monitored and altered if necessary to make
certain that organizational objectives are satisfied. The current segment intends to analytically
evaluate efficacies of a balance scorecard in enumerating performance of an organization.
Essentially, the balance scorecard has four different areas of measurement or perspectives of
measurement namely the financial perspective, business procedures, specific aspects of learning
as well s growth along with customer perspectives.
It ensures that it indicates of day-to-day alignment of operations with the strategic plan of
the business (Friedagand Schmidt2015). The method balance score card is a very useful tool for
prioritizing the products, projects and other kinds of services and it also helps in the
measurement of the progress of the company performance with respect to the strategic targets of
the company.
Balance Scorecard refers to the methods that measure the organisations performance
thatare used in the process of strategic management. It helps in improving and identifying of the
internal function of the organisation (Rampersadand Hussain2014). Dr. Robert Kaplan first
introduced the concept of Balance Scorecard in a business journal of Harvard. The measurement
is done based on the four-segregated areas of the balance scorecard. The balanced scorecard
appears as one of the crucial tools in multidimensional aspects, especially in the cases of
strategic management planning of the commercial institutions across the global framework.

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Discussions
Balance Scorecard is a used as a technique thatreflects the relationship between the
strategic elements of the company including that of the mission and vision, elements of
operations and other core segments of the business, the tool being effectively and widely utilized
in the public agencies and non-government firms. At present a research has been conducted,
according to which it has been showed that the balance scorecard is one of the five among the
top ten tools of management (Fooladvand, Yarmohammadianand Shahtalebi2015). It is a
flourishing concept that is used by the organizations for the measurement of performance and
plan of strategies.
The various part of Balance Scorecard are shown below in the chart:
Figure 1: (Balance Scorecard)

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Source: (Friedagand Schmidt2015)
The balance scorecard use is applied for the implementation of strategies that is
according to the business goals of the various organizations (Bosciaand McAfee2014). The
various areas of the balance scorecard are broadly known to be the four legs of the same. The
four legs of balance scorecard are: learning and growth, processes of the business, finance and
the consumers. Based on the four areas identified, the various components of the balance
scorecard can be discussed as follows:
1. Perspective of finance: The financial perspective includes the various company
information like the revenues, expenditures and sales. Net profits and other data related to
finance are also included in this perspective (Hamid2018). The balance score card is used
to analyze the resources and the income targets the variances of budget that the
organization use to find out the company financial metrics.
2. Business Procedures: The second aspect of Balance scorecard is helpful in finding
outthe accuracy of the technique of the manufacture for products. The aspect is helpful in
the analysis of thedelays and gaps which the company management faces (Orlovaand
Afonin2015). This perspective focuses on all the processes and the activities that the
company performs in order to provide the customers of the company with the quality
products that the consumer anticipate.
3. Customer’s perspective: The perspective of the customers helps in the measurement of
the consumer level of satisfaction that are included in the price, quality and supply of the
commodity (Keyes2016). The collection of data in the perspective of the consumers is

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done through feedback collection from the customers regarding the commodity that are
manufactured.
4. Growth and Learning arenas: The concerned area of the balance scorecard deals with
accuracy of the importation that are arranged and it shows the way the staffs use the
information in order to gain a competitive edge over the rival counterparts in the market.
The growth and learning aspect of balance scorecard is concerned with the assets of the
business that are intangible (Broccardo2015). It takes in hand the skills that are internal
and the capabilities of the organization that can provide assistance in creating the internal
processes. The leg of the balance scorecard focuses on the human capital and the various
issues that the individual faces. The technological issues and issues of the firms work
quality and climate are taken care by them.
The discussion deals with how the different types of capital can be represented with the help
of the balance scoreboard. The different types of capital include:
i. Natural capital: Natural capital refers to the flow of stock or energy and materials
thatproduces goods and services. It includes the various renewable and non-renewable
recourses that help in the production process. The balance scorecard in here helps to
analyze the resources that are used in the production process. The companyensures
thatthere is an optimumutilization of the resources and the nonrenewable resources are
well preserved.
ii. Human capital: It includes the health, knowledge, skills of the human resources.
Without the human capital that is the labor, productive work is not possible. The balance

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score card measures that the skill knowledge and efforts of the human resources are used
efficiently.
iii. Social capital: It consists of the institutions that help in the maintenance and
development of human capital in partnership with other, examples of socials capital are,
families, communities, unions and voluntary organizations. The balance scorecard plays
the role of making the company strategies with the use of the social capital.
iv. Manufactured capital: Manufactured capital comprises of the fixed assets and the
material good that contribute to the production process rather than being the output. With
the help of balance scorecard, the strategies are implemented. The balance score card
help in balancing the both financial andnon-financial resources to get the maximum
output.
v. Financial capital: The financial capital plays an important role in the economy of the
country, this enables the other types of capital to be owned and traded ( Kang et al. 2015).
The balance scorecard calculates the amount of capital that are to be invested in order to
generate the business.The financial resources are measured with the help of balance
scorecard and the amount of productivity with that resource is assessed.
At present, the businesses and the organizations are implementing the trending tool of
balance scorecard to improve the total operations and the efficiency of the firms. It is used to
measure the strategic process of planning as well. There is a rise in the trend of using this tool.
The various advantages, which are associated with the introduction and implementation of
Balance Scorecard, are discussed below:

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The adaptation of the strategic management can be done by the variety of different approaches in
management. The application of the same can provide a more structured and logical way to
ensure that the plans of the strategies in the areas are covered (Hansen, and Schaltegger2016). It
can be said the balance scores card is a tailor made tool to meet the requirement of the
organization.The making of the strategy plan and communication of the same has become easier
with the help of balance scorecard. In order to attain a high level in the business the tool of
balance scorecard can be followed.
The independent use of the balance scorecard if done efficiently, it helps in the alignment of the
strategy management of all the department and divisions. In addition to it, the tool can be used to
link up the various goals of the parent company with its subsidiaries and the partners (Senarath
and Patabendige 2015). It also helps in ensuring that the organization is carrying on the common
goals and objectives of the business.The balance scorecard allows the different plans of strategies
of the firm to be actively get involved in all the planning of the various decisions in the
organization. The implementation of the balance scorecard also helps in ensuring that the
management is following the regular strategic plan or not (Danaei, Hemmati and Mardani 2014).
It also ensures the plans are reviewed regularly and therefore, it can be ensured that the
organization is in the correct track or not. The organization always puts the strategic plan at the
centre of the process of decision making and reporting of the company.
While determining the limitation of the balance scorecard, it can be said that it is too rigid and
the organization requires a leadership process that is smooth and effective in order to measure
the company performance.

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Conclusion
According to the above discussion, it can be concluded that with the implementation and
a proper review of the various aspects of the Balance Scorecard, the firm can be reassured that
the strategy of plans and the performance measures are done effectively. The balance scorecard
can be used as a method for affecting the overall management of the company management.
With the help of the balance scorecard, different kind of information can be arranged that can be
related to the various perspective of the balance scorecard like the financial perspective, internal
business, business and customers. It also helps in the application of the formulation of the
effective strategies that the company market needs to obtain a competitive edge.

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