The Balanced Scorecard
The Balanced Scorecard is a strategic performance management framework that has been designed to help an organisation monitor its performance and manage the execution of its strategy. It is used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. The Balanced Scorecard provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. Furthermore, it enables executives to truly execute their strategies. It was originated by Robert Kaplan and David Norton as a performance measurement framework that added strategic non-financial performance measures to the traditional financial metrics to give managers and executives a more 'balanced' view of organisational performance. In its simplest form the Balanced Scorecard breaks performance monitoring into four interconnected perspectives: Financial, Customer, Internal Processes and Learning & Growth, as shown below in Figure 1.1 Figure1.1: The Balanced Scorecard
The Financial Perspective covers the financial objectives of an organisation and allows managers to track financial success and shareholder value. Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough handling and processing of financial data. With the implementation of a corporate database, it is hoped that more of the processing can be centralized and automated. But the point is that the current emphasis on financials leads to the "unbalanced" situation with regard to other perspectives. The Customer Perspective covers the customer objectives such as customer satisfaction, market share goals as well as product and service attributes. If customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor...
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