Balanced Scorecard

Balanced Scorecard

Introduction

Balanced Scorecard is a system of strategic management of the company based on the measurement and evaluation of its effectiveness on a set of optimally chosen parameters reflecting all aspects of the organization, both financial and nonfinancial. Balance scorecard is the he traditional way of assessing performance is based on financial results without considering other intangible assets or knowledge, such as the qualification of internal processes, customer loyalty and satisfaction, innovation, employee training, high quality products and others. Norton and Kaplan has failed to include citation of prior art. Critics say that balance score card does not provide unified view with clear recommendations or bottom line score. They say balance score is just a simple listing to metrics (Epstein, 2007).

Discussion

Balanced Score Cards, commonly known as BSC, are used all over the world. It is an immensely popular tool mainly because of how effective and how customer centered it is. Companies use the tool to conduct market analyses. It is used primarily to judge the company's performance with respect to company customer relations and overall customer satisfaction. The process of assessing this information is then used to improve relations and customer satisfaction. Both these factors are crucial to the market performance of every organization, irrespective of their final products.

Case Analysis

The use of balanced score cards in the business world can only be fully comprehended if balanced score card applications are understood. According to Kaplan (2005), “Scorecards feature all manner of wonderful objectives relating to the customer value proposition and customer outcome metrics—for example, market share, account share, acquisition, satisfaction, and retention”. Upon closer inspection, balanced score cards aim to assess the customer's propositions, outcomes and their wants and needs. The length that the company goes to meet these specific concerns is also of importance.

Some authors says there is lack of process management approach, as its "internal perspective" also called "internal processes" raises global indicators such as Internal Productivity, Cost and Time understood as a total, and lack of reference to the role of suppliers. It only emphasizes the role of benchmarking to validate the excellence of the indicators. It does not diagnose the initial situation of the organization and it does not systematically consider external variables such as the environment and the impact on society. It has a high degree of subjectivity, despite having many weak point some studies have been conducted which finds balance scorecard as a useful approach.

Modern organizations go through three stages when implementing the balanced score card tool. These three stages are essential to the successful implementation and are required to reap maximum benefit. The first stage is defining who really the organization's customers are. Then, the organization must determine the exact definition of their wants, their needs and consequently their demands. Finally, the company or organization must decide on the propositions they are willing to make in order to keep their respective customers satisfied. All three of these stages are important and none of them can be considered to be less important as compared to ...