Balanced Scorecard Essay

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Introduction This paper provides a detailed account of and guidance to building Balanced Scorecard. It is intended to serve as a one-stop guide that answers every question that you may have about this important Strategic Management approach. The paper starts with describing the method and discusses in detail its various components with the help of diagram. It then, provides a practical guide to build a balanced scorecard using a seven step model. Examples are used where necessary to help explain the method. Links to further material and sources of information on this topic are also provided to help you learn more about Balanced Scorecard. After reading this paper, you should be able to apply the concepts and use the balanced scorecard method to analyse any organisation. Balanced Scorecard is a concept that measures a company's activities in terms of its vision and strategies, to give managers a comprehensive view of the performance of a business. This new approach to strategic management was developed in the early 1990s by Dr Robert Kaplan (Harvard Business School) and Dr David Norton. A Balanced Scorecard enables organisations to clarify their vision and strategy, and translate them into action (Cobbold and Lawrie, 2002). All professionals have their own methods of communication. Accountants do this with financial statements, engineers with building drawings and architects using physical models. For a long time, however, the strategic planners faced the dilemma of a way to communicate and convey the finished product – "the strategic plan" – to the end users. The traditional ways of presenting strategic plans, despite their nice covers, bar charts, well-written reports and professional layouts, have not been able to impact the people responsible for their execution. This resulted in poor execution of the strategic plan throughout the entire organisation.

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