Balance scorecard can be considered as a specific system of management that mainly aims at translating strategic goals of a corporation into a set of performance goals. The identified performance goals necessarily are enumerated, monitored and altered if necessary to make certain that organizational objectives are satisfied. The current segment intends to analytically evaluate efficacies of a balance scorecard in enumerating performance of an organization. Essentially, the balance scorecard has four different areas of measurement or perspectives of measurement namely the financial perspective, business procedures, specific aspects of learning as well s growth along with customer perspectives.
It ensures that it indicates of day-to-day alignment of operations with the strategic plan of the business (Friedagand Schmidt2015). The method balance score card is a very useful tool for prioritizing the products, projects and other kinds of services and it also helps in the measurement of the progress of the company performance with respect to the strategic targets of the company.
Balance Scorecard refers to the methods that measure the organisations performance thatare used in the process of strategic management. It helps in improving and identifying of the internal function of the organisation (Rampersadand Hussain2014). Dr. Robert Kaplan first introduced the concept of Balance Scorecard in a business journal of Harvard. The measurement is done based on the four-segregated areas of the balance scorecard. The balanced scorecard appears as one of the crucial tools in multidimensional aspects, especially in the cases of strategic management planning of the commercial institutions across the global framework.
Balance Scorecard is a used as a technique thatreflects the relationship between the strategic elements of the company including that of the mission and vision, elements of operations and other core segments of the business, the tool being effectively and widely utilized in the public agencies and non-government firms. At present a research has been conducted, according to which it has been showed that the balance scorecard is one of the five among the top ten tools of management (Fooladvand, Yarmohammadianand Shahtalebi2015). It is a flourishing concept that is used by the organizations for the measurement of performance and plan of strategies.
The balance scorecard use is applied for the implementation of strategies that is according to the business goals of the various organizations (Bosciaand McAfee2014). The various areas of the balance scorecard are broadly known to be the four legs of the same. The four legs of balance scorecard are: learning and growth, processes of the business, finance and the consumers. Based on the four areas identified, the various components of the balance scorecard can be discussed as follows:
The discussion deals with how the different types of capital can be represented with the help of the balance scoreboard. The different types of capital include:
At present, the businesses and the organizations are implementing the trending tool of balance scorecard to improve the total operations and the efficiency of the firms. It is used to measure the strategic process of planning as well. There is a rise in the trend of using this tool. The various advantages, which are associated with the introduction and implementation of Balance Scorecard, are discussed below:
The adaptation of the strategic management can be done by the variety of different approaches in management. The application of the same can provide a more structured and logical way to ensure that the plans of the strategies in the areas are covered (Hansen, and Schaltegger2016). It can be said the balance scores card is a tailor made tool to meet the requirement of the organization.The making of the strategy plan and communication of the same has become easier with the help of balance scorecard. In order to attain a high level in the business the tool of balance scorecard can be followed.
The independent use of the balance scorecard if done efficiently, it helps in the alignment of the strategy management of all the department and divisions. In addition to it, the tool can be used to link up the various goals of the parent company with its subsidiaries and the partners (Senarath and Patabendige 2015). It also helps in ensuring that the organization is carrying on the common goals and objectives of the business.The balance scorecard allows the different plans of strategies of the firm to be actively get involved in all the planning of the various decisions in the organization. The implementation of the balance scorecard also helps in ensuring that the management is following the regular strategic plan or not (Danaei, Hemmati and Mardani 2014). It also ensures the plans are reviewed regularly and therefore, it can be ensured that the organization is in the correct track or not. The organization always puts the strategic plan at the centre of the process of decision making and reporting of the company.
While determining the limitation of the balance scorecard, it can be said that it is too rigid and the organization requires a leadership process that is smooth and effective in order to measure the company performance.
Conclusion
According to the above discussion, it can be concluded that with the implementation and a proper review of the various aspects of the Balance Scorecard, the firm can be reassured that the strategy of plans and the performance measures are done effectively. The balance scorecard can be used as a method for affecting the overall management of the company management. With the help of the balance scorecard, different kind of information can be arranged that can be related to the various perspective of the balance scorecard like the financial perspective, internal business, business and customers. It also helps in the application of the formulation of the effective strategies that the company market needs to obtain a competitive edge.
Reference
Boscia, M.W. and McAfee, R.B., 2014. Using the balance scorecard approach: A group exercise. Developments in Business Simulation and Experiential Learning, 35.
Broccardo, L., 2015. The Balance Scorecard implementation in the Italian health care system: some evidences from literature and a case study analysis. Journal of Health Management, 17(1), pp.25-41.
Danaei, A., Hemmati, M. and Mardani, M., 2014. Performance measurement of administration services using balance scorecard and Kano model. Management Science Letters, 4(4), pp.703-706.
Fooladvand, M., Yarmohammadian, M.H. and Shahtalebi, S., 2015. The application strategic planning and balance scorecard modelling in enhance of higher education. Procedia-Social and Behavioral Sciences, 186, pp.950-954.
Friedag, H.R. and Schmidt, W., 2015. Balanced Scorecard: Taschenguide (Vol. 61). Haufe-Lexware.
Hamid, N., 2018. Factor analysis for balanced scorecard as measuring competitive advantage of infrastructure assets of owned-state ports in Indonesia: Pelindo IV, Makassar, Indonesia. International Journal of Law and Management, (just-accepted), pp.00-00.
Hansen, E.G. and Schaltegger, S., 2016. The sustainability balanced scorecard: A systematic review of architectures. Journal of Business Ethics, 133(2), pp.193-221.
Kang, J.S., Chiang, C.F., Huangthanapan, K. and Downing, S., 2015. Corporate social responsibility and sustainability balanced scorecard: The case study of family-owned hotels. International Journal of Hospitality Management, 48, pp.124-134.
Keyes, J., 2016. Implementing the IT balanced scorecard: Aligning IT with corporate strategy. CRC Press.
Orlova, L. and Afonin, Y., 2015. Balance Scorecard. Japanese Educational and Scientific Review, (1).
Rampersad, H. and Hussain, S., 2014. Personal balanced scorecard. In Authentic Governance (pp. 29-38). Springer, Cham.
Senarath, S.A.C.L. and Patabendige, S.S.J., 2015. Balance Scorecard: Translating Corporate Plan into Action. A Case Study on University of Kelaniya, Sri Lanka. Procedia-Social and Behavioral Sciences, 172, pp.278-285.
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