Balanced Scorecard Approach and Acquisition of Technology



Balanced Scorecard Approach and Acquisition of Technology

Introduction

Information is rapidly becoming the deciding factor for gaining a competitive advantage, as all companies are transforming their structures to get more oriented towards competition. Several years ago a new approach i.e. balanced scorecard approach was introduced to pave the way to reinforce the financial measures, providing a three-dimensional criterion to assess the performance i.e. learning and growth, internal business process and customers. Moreover this approach enabled organizations to keep a bird-eye view on financial results besides monitoring continuous progress to acquire intangible assets and enhancement in capabilities needed for future growth. The scorecard approach does not provide the means for replacement of financial measures rather it complements them.

Discussion

Balanced scorecard approach enables the managers to assess the performance of the business rather than solely relying on short-term financial measures. This approach provides four innovative management processes that in combination and separately facilitate in connecting the shot-term actions with the strategic objectives planned for long term.

The first process is called “translating the vision” enable the manager to construct a consensus in an organization's strategy and vision. This process inhibits organizations to put on a lofty statement as a mission of their organization, rather it suggests setting the practical objective with reasonable steps to achieve it and is agreed upon by all senior executives, thus deciding an efficient driving force for long-term success of the company.

The second process is termed as “linking and communicating”, this process make the managers responsible for developing strategies and circulating it all around the organization, in addition they are also responsible to link these objectives with every individual and departments simultaneously

The third process is called “planning of business”, this process is meant to integrate the financial and business plans into one, thus ...