Balance Scorecard Essay

1877 Words8 Pages
Balance Scorecard – A Complement to the Strategy Map Companies are constantly reinventing themselves in the name of profit. There are a number of different strategies companies implore to create success. Whether it is the expansion into international markets, new technologies, or sustainability the goal is to create a strategy that allows the business to successfully compete. There are numerous strategies capable of generating abnormal profits or can take a company into bankruptcy. The spectrum holds no magic formula as a variety of resources and capabilities are necessary to successfully compete. What works or is frowned upon in one market can become a cash cow in another. The constant is embracing strategic management and business…show more content…
This scorecard provided a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more balanced view of organizational performance. Kaplan and Norton describe the innovation of the balance scorecard as: “The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation” (What is the, 2015). The balance scorecard has evolved from a simple performance measurement tool into a framework assisting with strategy management (Person, 2009). It takes a visual strategy map and provides links into how the organization intends to measure success against this strategy. The scorecard consists of measures surrounding finance, customer and marketplace, internal operations, and learning and…show more content…
The balance scorecard and strategy map help break these barriers by linking organizations and outcomes. Tying operational goals and objectives across organizations can help eliminate the silo mentality. Communicating Strategy The balance scorecard provides the entire organization with the ability to view overall results and their progression toward the G&O’s. The ability to cascade the information throughout, allows all levels of the organization to work toward impacting outcomes. This common language helps facilitate dialogue between functional managers and employees, and across organizational boundaries between different disciplines. Monitoring and Managing Strategic Execution Person (2009) highlights that less than 10 percent of an executive staff’s time is spent on monitoring strategy and execution. The executive staff spends most of their time on operational performance. The balance scorecard can help offset this. The balance scorecard provides executives a means to monitor performance to the overall strategic intent. This helps executives remain focused on strategic leadership, and empowers functional managers to concentrate on operational
Open Document