A Balance Scorecard

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The approach of a balance scorecard in achieving strategic objectives in organisation.


In current upsurge in economic condition globally brought on by competition and uncertainty, all organisations are impacted with need for changes to remain viable in performance of duties. This trend have prompt companies in adopting suitable approach which are unique to its operation and thus being effective in achieving goals objectives and prospect for development. The development of the balance scorecard has become an approach adopted in an organisation operation. It originated as a performance measurement framework that added strategic non-financial performance measures to previous practices of using financial measures for supporting management in arriving at a balanced view of organization performance. It’s framework primarily focus on strategic planning in business, industry, government, and non-profit organisation worldwide by evaluating factors which are most important to improve internal and external communications with customers and align with their prospective goals. In this effort company would be able to increase revenue, cut internal cost and maximise full use of its resources. Generally, four frameworks are approach to which performance is derived for strategic planning in an organisation as mention.

♦ Financial Perspectives:

This coincides with performance measures such as earning per share, return on capital and return on interest which are used to evaluate the strategic approach by the company or organisation concern. This perspectives evaluates whether the strategic performance measures used by the company in other perspectives is contributing towards objectives of the company in term of maximizing shareholders value of increase revenue and growth in the company. For this justification to be made, management would assess the cost involve to the return on investment. For example, the types of response that might be taken in responding to changes in customers taste that may result from competition is through developing new products or redesigning existing ones to meet customers satisfaction or perspectives. These approaches are targeted towards new and existing customers as a means of increasing market shares to gain a higher return on investment being the goal of the organisation. In order for this target to be achieve under the balance scorecard approach a company will seek to derive performance from the internal perspectives being the initiatives of enhancing capabilities within organisation such as allocating the right amount of quality resources, increasing production capacity and overall in line with their capital cost. For this becoming successful, the organisation initiatives would focus on performance measurement through the learning and growth perspectives whereby programme to develop the skill of the workforce are adopted along with the introduction of technology to increase efficient in order to support the objectives of increase revenue, cost reduction and asset utilization within the organisation.

♦ Learning and Growth Perspective:

This is said to be the foundation upon which the balance scorecard is built. In this area, company focus their approach on programme to facilitate further improvement while taking into consideration technological changes in the global environment. It focus on objectives of maintaining competent workers to develop skill through adopting a continuous learning programme which are used to facilitate progress with changes internally and externally and transformation of that experience into knowledge accessible to the whole organisation, and relevant to its purpose of increase revenue being the aspect of the financial perspectives. This trend would reflect, businesses adopting and delivering efficient services with technological advancement and changes in line with the framework of the internal business perspectives in order to meet the...
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