The Balanced Scorecard
The concept of The Balanced Scorecard.
Over the last 80 years there has been an array of management guru’s providing organisations with numerous models and performance measurement tools to enable them to achieve the highest level of operational efficiency possible.
The problem of many of these models confronted was there inability to encapsulate the whole view and operation of the organisation taking into account all of stakeholders and all of the organisations different departments and area’s of business. These include both the financial and non financial factors of the organisation.
With the ever changing business environment, organisations have been searching for a uniformed method of analysis which will enable them to meet there long term strategic objectives. One of the most versatile models which have been introduced over the last 15 years is The Balanced Scorecard.
Introduced by Robert S. Kaplan and David P.Norton through a series of academic journals by the Harvard business review, the balanced scorecard uses a balanced measurement system that comprises of four perspectives.
• Financial Perspective
• Customer perspective
• Internal Business Perspective
• Innovation and Learning Perspective
Historically, financial performance has been the only measurement for organisations to communicate the results of its business operations and performance. The Balanced scorecard adds three new perspectives to the existing financial one as today’s organisations must create future value through investment in customers, suppliers, employees, processes, technology and innovation. The balanced scorecard provides a framework to which organisations can clearly identify there objectives and measure them, and thus improve upon areas which are under performing and exploit these areas which are undervalued. It enables the organisation to take a more detailed view of the operation providing better...
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