The Balanced Scorecard

The Balanced Scorecard

Introduction

The Balanced Scorecard (Balanced Scorecard) gives you a method and an ideal measuring instrument. Its effectiveness is proven for years in the private sector. As part of the new public management, a series of public institutions and non-market are already using this model. The Balanced Scorecard draws on the work of Robert S. Kaplan and David P. Norton in the early 1990s at Harvard University back. The Balanced Scorecard is used as a management tool for aligning the organization's strategic goals. In contrast to corporate mission statements and other vague wording tried the balanced scorecard to measure the achievement of strategic objectives and to make the derivation of measures to implement. Maisel, L.S, (1992)

Discussion

Purpose of the Paper

The purpose of these two papers is to examine the efficiency of the Balanced Scorecard (BSC) in order to improve the financial performance. The balanced scorecard has been gained popularity because it is an efficient and effective tool which can make align the goals with corporate strategy and employee actions which has introduced in 1992. In this article it presents an empirical analysis which investigates the impact of balanced scorecard in banking financial performance. There are some weaknesses as well in this article; weaknesses will include failure in performance measurement of organization. There is one more weakness which is failure of account for advance in technology. Maisel, L.S, (1992)

Kaplan and Norton Balanced Scorecard, however, represent not only a new performance measurement system, a management system should it rather be the hinge between the development of a strategy and its implementation. In this field the authors ascertaining numerical currently significant deficiencies:

Vision and strategy are not feasible;

Missing link the strategy with the objectives of the departments, teams and staff;

The strategy is not linked to resource allocation;

"Tactical" prevails instead of "strategic" feedback. Maisel, L.S, (1992)

All obstacles should be overcome through the use of the Balanced Scorecard:

The process of developing a Balanced Scorecard in the top management should lead to clarification and for consensus on the strategic goals. The Balanced Scorecard is to contribute to uniform targeting of actors in the company through three mechanisms: communication and training programs, linking the balanced scorecard with goals for team and individual actors as well as linking with incentive systems.

In addition to the human resources also need financial and material resources are aligned to corporate strategy. Four steps to help: the formulation of ambitious goals, identifying and focusing strategic initiatives, the identification of critical enterprise-wide strategies and their link to the annual resource allocation and budgeting.

The traditional hierarchical process of strategy formulation and implementation is characterized by Kaplan and Norton by a lack of feedback process. The feedback occurs only at the operational level as”single-loop learning". Using the Balanced Scorecard is, however, the feedback related to the strategy and support through "double-loop learning" characterized strategic learning process.

The Balanced Scorecard by Kaplan and Norton to support the strategic management process that is in the business or serves as a framework ...