Balance Scorecard Essay

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The Balanced Scorecard The Balanced Scorecard is a strategic performance management framework that has been designed to help an organisation monitor its performance and manage the execution of its strategy. In a recent world-wide study on management tool usage, the Balanced Scorecard was found to be the sixth most widely used management tool across the globe which also had one of the highest overall satisfaction ratings. In its simplest form the Balanced Scorecard breaks performance monitoring into four interconnected perspectives: Financial, Customer, Internal Processes and Learning & Growth. Balanced Scorecard Perspectives Here are the definition for the four Balanced Scorecard perspectives: * The Financial Perspective covers the financial objectives of an organisation and allows managers to track financial success and shareholder value. * The Customer Perspective covers the customer objectives such as customer satisfaction, market share goals as well as product and service attributes. * The Internal Process Perspective covers internal operational goals and outlines the key processes necessary to deliver the customer objectives. * The Learning and Growth Perspective covers the intangible drivers of future success such as human capital, organisational capital and information capital including skills, training, organisational culture, leadership, systems and databases. From Measurement Dashboards to Strategy Maps When it was first introduced the Balanced Scorecard perspectives were presented in a four-box model (see Figure above). Early adopters created Balanced Scorecards that were primarily used as improved performance measurement systems and many organisations produced management dashboards to provide a more comprehensive at a glance view of key performance indicators in these four perspectives. However, this four box model has now

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