Balanced Scorecard
Essay Preview: Balanced Scorecard
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Name: Ram Kumar
Matrix No.: #### Assignment: The Balanced Scorecard
Definition
The Balanced Scorecard is a method of performance measurement that combines conventional financial measures with non-financial measures to provide management with richer and more relevant information about activities they are managing.
Mainly used for two activities:
Management Control – Monitoring and control the delivery of pre-defined activities
Strategic Control – Used to articulate the strategic objectives of an organisation and monitor the activities required for their requirements
And through four perspectives suggested by Robert S. Kaplan and David P. Norton:
Financial Perspective
Assess project risks
Cost benefit analysis of proposed activities
Data available to monitor cash flow, planned versus actual
Customer Perspective
Understanding of who are internal and external customers
Activities driven by customer needs satisfaction
Define levels of service to match levels of customer satisfaction
Internal Perspective
Mission orientated processes and support orientated processes
Metrics to display areas in which organisation excels
Compare metrics with what customer actually requires
Learning and Growth Perspective
Avoidance of brain drain through focussed training in identifiable areas of risk
Organisational development through people improvement
Knowledge workers in continuous learning mode
Application in Real World
In real world that includes profit organization, non-profit and government organizations, balance scorecard has been trusted and used since year 1988.
There has been a significant evolution from Kaplan & Nortons original approach which was found to have elements which were unworkable in usual practice. There were heated almost ideological arguments whether it was appropriate to tamper with Kaplans model. This didnt consider the development of the model that occurred pre Kaplan. “The balanced scorecard translates an organizations