Submitted by saifulhafez on January 6, 2010
•Category: Business and Economics
•Words: 2706 | Pages: 11
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This assignment will discuss on how balanced scorecard is used to evaluate the performance of a company in particular a business unit. Prior to evaluate the company’s performance, I will first explain the term balanced scorecard and also the rationale of the objectives chosen for each perspective so as to ensure that the assessment of the company’s performance is quantifiable as well as reliable and comparable to other companies in the same industry.
1.1 Balanced Scorecard as a Measurement Tool
From a general overview, balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government as well as non-profit organization worldwide. Amongst benefits of balanced scorecard is to align business activities to the vision and strategy of the organization, improve internal and external communications and to monitor organization performance.
Balanced scorecard is a broad-based measurement approach which incorporates financial and non-financial measures in an integrated system that links performance measurement and a company’s strategic goal. It is a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics that gives a more ‘balanced’ view of organizational performance.
The idea of balanced scorecard was coined in the early 1990’s and originated by Dr. Robert S. Kaplan of Harvard Business School and Dr. David P. Norton. They also regard balanced scorecard as a management system that enables organizations to clarify their vision and strategy and translate them into action.
1.2 Hallmarks of Balanced Scorecard
The balanced scorecard evaluates company performance from a series of four perspectives where metrics will be...