Preview

balanced scorecard

Good Essays
Open Document
Open Document
2946 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
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



Cited: in Kaplan, 2010, pp23 to 26).

You May Also Find These Documents Helpful

  • Powerful Essays

    Balanced Score Card

    • 1932 Words
    • 8 Pages

    Firstly, the balanced scorecard was considered as a measurement tool, however at the present time it is been widely used by organizations as a strategic management system that supports and clarify company’s strategy and vision by measuring the four elements of the balance scorecard and interprets these aspects into strategic actions within the business thus to achieve a competitive advantage…

    • 1932 Words
    • 8 Pages
    Powerful Essays
  • Better Essays

    A balanced scorecard is a tool to provide management a way to bridge the gap between the organization’s strategy and vision and the operational processes used to do business. It enables the company to look at more than just the financial targets, but to include nonfinancial measures such as customer service, internal business processes and more. These intangible measures provide better focus on the organization’s long-term strategies.…

    • 1163 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    The Balance Scorecard is used as strategic tool and as an organization technique to achieve desired goals. The concept is used to bring into line an organization’s performance towards its objectives and vision. The scorecard can also be used to develop communication and response between the management and employees for monitoring…

    • 130 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    Balanced Scorecard (hereafter known as BSC) is a performance measurement system that has been introduced to overcome the weaknesses of the traditional performance measurement systems. In the intense competition market, intangible assets of companies play a major role in creation of value for companies. (Nolan Norton Institute, 1991). Therefore, in order to improve the management of intangible assets, companies should incorporate measurement of intangible assets into the company’s performance measurement system (Kaplan, 2010). It was introduced as a performance…

    • 5989 Words
    • 24 Pages
    Powerful Essays
  • Satisfactory Essays

    Balanced Scorecard

    • 345 Words
    • 2 Pages

    The balance scorecard is used as a strategic planning and a management technique. It is widely used in many organizations, regardless of their scale, to align the organization's performance to its vision and objectives. The scorecard is also used as a tool which improves the communication and feedback process between the employees and management, and to monitor performance of the organizational objectives.…

    • 345 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Case Creve Couer Pizza, Inc

    • 8341 Words
    • 34 Pages

    Ittner, C.D. and Larcker, D.F. (1998), “Innovations in performance measurement: trends and research implications”, Journal of Management Accounting Research, Vol. 10, pp. 205-38. Kaplan, R.S. and Norton, D.P. (1992), “The balanced scorecard – measures that drive performance”, Harvard Business Review, pp. 71-80. Kaplan, R.S. and Norton, D.P. (1993), “Putting the balanced scorecard to work”, Harvard Business Review, pp. 134-47. Kaplan, R.S. and Norton, D.P. (1996), The Balanced Scorecard, Harvard Business School Press, Boston, MA. Malmi, T. (2000), “Balanced scorecard in finnish companies: some empirical evidence”, paper presented at the European Accounting Congress in Munich. Miles, R.E. and Snow, C.C. (1978), Organizational Strategy, Structure and Process, McGraw-Hill, New York, NY. Miles, R.E. and Snow, C.C. (1994), Fit, Failure and the Hall of Fame, Free Press, New York, NY. Nanni, A.J., Dixon, R. and Vollmann, T.E. (1992), “Integrated performance measurement: management accounting to support the new manufacturing realities”, Journal of Management Accounting Research, Vol. 4, pp. 1-19. Slocum, J.W. Jr, Cron, W.L., Hansen, R.W. and Rawlings, S. (1985), “Business strategy and the management of Plateaued employees”, Academy of Management Journal, Vol. 28, pp. 133-54. Tymon, W.G., Stout, D.E. and Shaw, K.N. (1998), “Critical analysis and recommendations regarding the role of perceived environmental uncertainty in behavioral accounting research”, Behavioral Research in Accounting, Vol. 10, pp. 23-46. Further reading Gosselin, M. (1997), “The effect of strategy and organizational structure on the adoption and implementation of activity-based costing”, Accounting, Organizations and Society, Vol. 22 No. 2, pp. 105-22.…

    • 8341 Words
    • 34 Pages
    Satisfactory Essays
  • Better Essays

    Measurement System

    • 851 Words
    • 4 Pages

    The primary objectives of this case were to create a performance measurement system by balanced scorecard in order to understand how the company has performed and its impact on performance. The analysis considers internal and external factors of the scorecard to the company.…

    • 851 Words
    • 4 Pages
    Better Essays
  • Powerful Essays

    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. It was originated by Drs. 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.…

    • 3154 Words
    • 13 Pages
    Powerful Essays
  • Better Essays

    Performance Management

    • 2142 Words
    • 9 Pages

    In the early 1990 's, Dr. Robert Kaplan (Harvard Business School) and Dr. David Norton, developed a new system for performance measurement, called the balanced scorecard. The balanced scorecard is a management system (not only a measurement system) that enables institutions to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. The balanced scorecard suggests that institution or organization should be viewed from four perspectives including both financial and non-financial measure:…

    • 2142 Words
    • 9 Pages
    Better Essays
  • Good Essays

    The balanced scorecard framework consists of four perspective; financial perspective, customer perspective, internal business processes, and learning and growth perspective. This framework would clarify the relationship between internal and external measures, objective and subjective measures, and between performance results and the drivers of future results. Financial perspective concern with growth, profitability, and risk from the shareholders. This perspective is driven by financial factor that will be evaluated in term of monetary value. Financial conditions of an organization would be observed through the financial statement (income statement, balance sheet) that has been prepared. Customer perspective is concern with the degree of customer satisfaction regarding the product. It also indicate the market share of the product in target segment. This perspective included in non-financial measurement which could be measured by distributing the questionnaire to the customer. It might be done either through real mail or electronic mail. The questionnaire should be reliable and understandable to ensure the customer give the true feedback and enable the correct measures would be interpreted precisely. Next is internal business process which area that aim on the business processes that satisfy the customer and shareholder. Determination of efficient and effective business process is important to maximize both customer…

    • 423 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Mgmt/300 Final Exam

    • 2616 Words
    • 11 Pages

    The balanced scorecard= comprehensive management control system that balances traditional financial measures with measured of customer service , internal business processes, and the organizations capacity for learning and…

    • 2616 Words
    • 11 Pages
    Powerful Essays
  • Good Essays

    The balanced scorecard is a strategic business planning and tracking tool designed to help companies align their corporate mission and visions with day-to-day activities. The scorecard effectively "keeps score" as to how daily business activities are tracking to strategic vision or goals. This tool is especially needed today with the multitude of information-centered distractions (cell phones, e-mails, PDAs, Twitter, Facebook and the like), which may or may not align with corporate long-term objectives.…

    • 376 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Many companies adopted early balanced-scorecard concepts to improve their performance measurement systems. They achieved tangible but narrow results. Adopting those concepts provided clarification, consensus, and focus on the desired improvements in performance. More recently, we have seen companies expand their use of the balanced scorecard, employing it as the foundation of an integrated and iterative strategic management system. Companies are using the scorecard to: clarify and update strategy, communicate strategy…

    • 1453 Words
    • 6 Pages
    Powerful Essays
  • Better Essays

    A Balanced Score Card

    • 1311 Words
    • 6 Pages

    The Balanced Score Card is a tool that is used by business professionals, the information that this found on this card is useful to the managers for a variety of reasons. However the primary use is to monitor the organizations progress towards it vision and its mission. The information is like a snapshot of the health of the business. This tool allows manager to identify areas that need improvement, ones that are doing well and what might be future opportunities. (Nyheim &McFadden, 2007)…

    • 1311 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Kaplan, R., and D. Norton. (1992). ‘The Balanced Scorecard--Measures that Drive Performance '. Harvard Business Review 70 (1): 71-79.…

    • 2146 Words
    • 9 Pages
    Powerful Essays