Question

develop a framework for using balanced scorecard for a business organization

Answer 1

The balanced scorecard is a strategic planning and performance management framework used by business, government, and non-profits to align day-to-day activities with enterprise vision, mission, and values. The balanced scorecard tracks financial and non-financial measures to determine the degree to which the enterprise is performing as desired and when corrective action is necessary.

The balanced scorecard is a widely used management tool, particularly in the U.S., the UK, Northern Europe, and Japan. Enterprises must have the necessary resources and discipline to make the balanced scorecard successful.

Balanced scorecard perspectives

The balanced scorecard relies on four perspectives to monitor enterprise health. Specifically:

• Financial:The financial health of any enterprise is critical to long-term survival.
• Customer: The customer perspective compares the enterprise’s service to the competition’s service.
• Internal process: This perspective helps the enterprise understand the efficiency and effectiveness of internal business processes and supporting technologies.
• Organization capacity: This perspective was initially called “Learning and Growth” and is sometimes called “People” by enterprises that believe that humans are the most important part of an enterprise’s capacity to improve.

The original balanced scorecard was designed to help for-profit companies. As the balanced scorecard became more widely accepted, it was adapted for government and non-profits.

Benefits of the balanced scorecard

The balanced scorecard helps enterprises in several ways. It reminds executives that in addition to tracking financial metrics, it is also important to track quality and service. Second, the strategy map provides a clear, concise way to communicate priorities and goals to employees, customers, suppliers, and other stakeholders. The balanced scorecard also creates an explicit linkage from enterprise strategy to day-to-day activities. Fourth, the balanced scorecard facilitates business planning by providing clear metrics that help the enterprise rank projects into priority sequence and enterprise products by importance. Finally, the framework helps the enterprise monitor and measure progress towards strategic objectives.

Balance Scorecard Framework