Question

. Explain the four indicators of the balanced scorecard, and state what a strategy map is.

Answer 1

Strategy map, as name suggests is a diagram which is used to list down the strategies set by the organization on a one single page. It helps employees to understand the perspective of management as well as their position based on those strategies so that work goals can be achieved in the timely manner. As its an reference material it can be used during review meeting and helps in the strategic planning process.

Four indicators of the balanced scorecard are :

a. Financial perspective, in which the bottom line improvement of the company is considered by implementing and executing the strategy so that the company becomes profitable, grow and show the shareholder value. In this perspective company try to improve the return on investment and market share.

b. Customer perspective, is important to increase the sales by trying to deliver the product on time, quality etc. But apart from these factors company must be sensitive towards the price as it plays major role during the customer decision making process..

c. Innovation and learning perspective, in it company try to implement new technologies and gain competitive success by considering learning perspective. Company try to launch new product in market, improves efficiency related to operations, develops the standards and increases future sales by innovation and improving the process.

d. Internal business perspective, in it achieving customer satisfaction is important by trying to improve internal factors such as quality, time, productivity etc which are likely to impact the customer opinion about that particular product. Corporate objectives are set in tune with the improvement activities and responsive system to achieve the overall mission of the organization.