BALANCED SCORECARD

Balanced Scorecard as a Tool of Strategic Management

Balanced Scorecard as a Tool of Strategic Management

Introduction

The study relates to balanced scorecard and assesses its importance as a tool of strategic management. In this view, it is important to note that Balanced Scorecard (BSC) is a strategic performance measurement system of company. BSC is based on the vision and strategy of the company, it is a set of standards that are derived the strategy of the organization. There are business performance measures which include finance, customers and internal business processes and employees.

Discussion

The basic idea of balanced scorecard is to focus the organization on scales which are crucial in implementing the strategy and achieving strategic goals. Implementation of BSC means converting strategy into concrete actions that is the transfer of content visions, strategies into clear and measurable objectives within the above perspectives. The aim is also to bring a better balance between financial and non-financial measures of the company. This model is very often used just in connection with the introduction of a new management approach that is intellectual capital which is based on the fact that the market value of the company is different from the book value of the company. Only financial indicators of business performance measurement cannot capture the intangible value of the company consisting of knowledge, skills, motivation of employees, business processes, innovation and relationships with customers (Drury, 2005, 16-94).

Balanced Scorecard is a management system for the formulation and implementation of strategy through strategic and operational cards. Formulation and implementation of strategy implies the transfer of long-term strategic goals into short-term corporate activities. BSC can be used to analyze qualified internal environment of a company that is focused on a narrow set of indicators, but a thorough evaluation that looks at the business from a variety of complementary perspectives. Under this model, performance indicators should involve four different perspectives which include financial, customer, internal and innovation (Sethi and Gupta, 2008, 44-72). Performance improvement then is not only to reduce costs, improve quality and shorten delivery times, but also in recognition of this process, which are of strategic importance. Using the BSC is recommended corporate strategy to convert the file into understandable performance measures that provide the framework for the assessment of the strategy and its management. BSC then allows you to watch not only the financial results, but also how companies are able to provide and acquire intangible assets needed for future growth.

The balanced scorecard is an administration framework which expedites organizations to characterize the vision and procedure and translate them into execution. These days, the organizations everywhere throughout the planet have gotten aggressive on the groundwork of data and their cognizance of to utilize imperceptible holdings come to be a long way from indisputable than their capability to put resources into control physical possessions. The balanced scorecard has come to be more than an approach to gauge monetary execution. Besides, the balanced scorecard is the inside of another vital administration arrangement of association that figures out the ...