Strengths And Weaknesses Of Balanced Scorecard

1.0 Introduction
The Balanced Scorecard has emerged in recent years as a performance measurement system in various organizations. This paper will discuss the origin and concept of the balanced scorecard and how it was first implemented. We will then review the criticisms on the balanced scorecard methodology as well as analyse the strengths and weaknesses of this performance measurement tool.

1.1 What is the Balanced Scorecard?
The Balanced Scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals. It is used extensively in business and industry, government and non-profit organizations worldwide to provide a framework that not only provides performance measurements, but helps planners identify what should be done and measured.

1.2 Origin and Concept
The balanced scorecard was introduced by Robert Kaplan, a professor at Harvard University, and David Norton in 1990. The concept was later adopted for a study on new methods to measure performance involving multiple organizations. The balanced scorecard enables organizations to measure performance by providing balance to the financial perspective. Organizations used to measure performance by measuring only the financial measurements and this did not reflect the true performance of the organization. The BSC methodology includes information about the operational measures which gives the management a clearer picture that makes it easier for organizations to plan for short and long term goals.

1.3 Reasons for Using the Balanced Scorecard Approach
Before the introduction of the balanced scorecard tool, only financial measures were used to determine the organi...

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...g the project as performance measurement. A senior management team that does not let known about the importance of the balanced scorecard to the employees of the company sends the message that this is not a high priority. Employees viewing the balanced scorecard as a low priority does not communicate the importance of the balanced scorecard to the rest of the company send the message that this is not a high importance. Hence, this will backfires the strategy implementation due to the lack of senior management commitment.
4) The development process takes too long
When the development process takes too long, it can happen that during the implementation process, the strategy has changed. This results in the fact that some of indicators have become outdated and requires new indicators. Measuring with incorrect indicators can divert an organisation from its strategy.