balanced scorecard
Balanced scorecard
The notion of the Balanced Scorecard was developed by Robert Kaplan and David Norton in 1992 which has already widely used by many companies in the world (Helen Atkinson, 2006). The balanced scorecard not only focuses on the financial information but also nonfinancial information.
However, with the rapid development the value of intangible assets such as intelligence becomes more important. Because the traditional management performance system always focuses on financial aspect.According to Martinsons, Davison and Tse (1999.p73), nowadays the modern companies should focus on market segments not only the financial measures and also need to improve the technology to develop the processes. It means financial measures are not only method to do decision making. Hence, because of the traditional performance evaluation system it produces some problems with companies’ performance evaluation system. One problem is that the value of the intangible assets created by employees such as intellectual property and competitive advantage can not be fully reflected in the financial measures. In addition, financial measure is suitable for managers to make short-term decisions rather than long-term decisions (Kang and Fredin, 2012. p639). To some extent, balanced scorecard can avoid these problems.
The balanced scorecard includes both financial and non financial information, it help managers to balances short-term and long-term interests when they make decisions (Kang and Fredin, 2012. p639). The financial aspects of the balanced scorecard sets forth the organization 's financial goals, and measure whether the implementation of the strategy and implementation to contribute to the improvement of the final results of its operations. Balanced scorecard objectives and metrics are linked, this linkage includes not only the cause-and-effect relationship, but also including outcome measures and results in a measure of combined, ultimately reflected in the
The notion of the Balanced Scorecard was developed by Robert Kaplan and David Norton in 1992 which has already widely used by many companies in the world (Helen Atkinson, 2006). The balanced scorecard not only focuses on the financial information but also nonfinancial information.
However, with the rapid development the value of intangible assets such as intelligence becomes more important. Because the traditional management performance system always focuses on financial aspect.According to Martinsons, Davison and Tse (1999.p73), nowadays the modern companies should focus on market segments not only the financial measures and also need to improve the technology to develop the processes. It means financial measures are not only method to do decision making. Hence, because of the traditional performance evaluation system it produces some problems with companies’ performance evaluation system. One problem is that the value of the intangible assets created by employees such as intellectual property and competitive advantage can not be fully reflected in the financial measures. In addition, financial measure is suitable for managers to make short-term decisions rather than long-term decisions (Kang and Fredin, 2012. p639). To some extent, balanced scorecard can avoid these problems.
The balanced scorecard includes both financial and non financial information, it help managers to balances short-term and long-term interests when they make decisions (Kang and Fredin, 2012. p639). The financial aspects of the balanced scorecard sets forth the organization 's financial goals, and measure whether the implementation of the strategy and implementation to contribute to the improvement of the final results of its operations. Balanced scorecard objectives and metrics are linked, this linkage includes not only the cause-and-effect relationship, but also including outcome measures and results in a measure of combined, ultimately reflected in the
Cited: in Kaplan, 2010, pp23 to 26).