BALANCED SCORECARD

Development and Role of Balanced Scorecard in Production and Service Organizations

Development and Role of Balanced Scorecard in Production and Service Organizations

Introduction

Throughout the industrial age, the main competitive advantage for organizations accounted technology embodied in tangible assets, and the effect of scale. The main criteria for determining the effectiveness of the company are financial indicators such as return on borrowed capital 'ROCE - Return on Capital Employed', ROA - Return on Assets, 'ROTA - Return on Total Assets', and product profitability 'CRR - Cost to Revenue rate'. With these factors, managers determine the most efficient areas and provide for the redistribution of internal resources in order to improve financial performance and increase business value.

Today is much more difficult to achieve competitive advantage through effective financial management and investment in physical assets. The company's ability to mobilize and use its intangible assets has become more significant factor. Strategy of the company is more important than ever. That is why building the organization, customer-oriented and building customer focused organization, and the construction-oriented business strategy, which is commonly known as focused business strategy. These are one of the major initiatives taken by the majority of the dynamic and growing production and service organization around the world.

In the information age, in conditions of severe market competition is much more important is the long-term development. The main factors which contributes to a good strategic management, business process efficiency, capital, embodied in the knowledge and skills of employees, an organization's ability to retain and attract new customers, corporate culture that encourages innovation and organizational improvements, investments in information technology. Balanced Scorecard is a methodology of measurement and performance management developed by professors from Harvard Business School, Robert Kaplan, and David Norton in 1992 (Kaplan, 1992). The methods used in managing the business, services and infrastructure are usually based on methodologies that can use a dedicated IT (Information Technology) and software's such as ERP solutions as support, relating to the management of services and guarantee the results business. The methodologies of these steps include defining the business strategy, business management, service management, and quality management; these steps implemented through performance indicators (Kaplan, 2002).

The BSC (Balanced Scorecard) initially presented as a model for performance evaluation and business, but changes provided its application in developing a methodology for strategic management. The requirements for defining these indicators deal with the processes of a model of service management and maximizing search results based on four perspectives that reflect the vision and strategy for business:

Financial;

Customers;

Internal processes;

Learning and growth.

It is a logical design of a system for generic management organizations where the business administrator must define and implement through a management information system, for instance variables control, goals and interpretations for the organization to present positive performance and growth over time.

Discussion

BSC (Balanced Scorecard) is an acronym that can be translated into Balanced Performance Indicators, or to Balanced Scenario. The term “Balanced Indicators” is given to the fact that the choice of indicators of an organization are restricted not only focus on economic-financial organizations ...