BALANCED SCORECARD

By-JosphinSminu

ArchanaSuma Latha

What is balanced score card..?

• The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

Origin

• It was originated by Dr. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework.

• That added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance.

• Provides method for organisation to systematically develop a comprehensive system of planning and control.

• Performance measurement system that translates organisation strategy into objective measures, targets and initiatives.

How is the Balanced Score card Used?

• Translating the vision: helping all employees understand how their day-to-day work contributes to long-term goals.

• Communicating and linking: disseminating long-term goals both up and down an organizational hierarchy, ensuring that both departmental and individuals objectives are in alignment.

• Business planning: taking long-term strategy and using it as the basis for how resources and capital are allocated.

• Feedback and learning: the scorecard enables strategic and real-time learning because it measures daily performance and spending in the context of overarching goals, allowing organizations to make necessary changes.

Perception of balance score card

• The Financial Perspective covers the financial objectives of an organisation and allows managers to track financial success and shareholder value.

• The Customer Perspective covers the customer objectives such as customer satisfaction, market share goals as well as product and service attributes.

• The Internal Process Perspective covers internal operational goals and outlines the key processes necessary to deliver the customer objectives.

• The Learning and Growth Perspective covers the intangible drivers of future success such as human capital, organisational capital and information capital including skills, training, organisational culture, leadership, systems and databases

Corporate examples

• Balance score card for hospitals

• Balance score card for schools