Question

What roles do vision, mission, and strategy play in the development of a Balanced Scorecard? Explain in at least 130 words.

Answer 1

A balanced Scorecard ia a control system that translates an organisation's vision, mission and, strategy into specific, quantifiable goals and to monitor the organisation's performance in terms of achieving these goals. the balanced scorecard examines performance in four areas: Financial analysis, Customer analysis, Internal analysis and Learning and growth.

• Financial analysis: Includes assessments of measures such as operating costs and return-on-investment.
• Customer analysis: This looks at customer satisfaction and retention.
• Internal analysis: It looks at production and innovation, measuring performancesin terms of maximising profit from curent products and following indicators for future productivity.
• Learning and growth analysis: It explores the effectiveness of management in terms of measures of employee satisfaction and retention and information system performance.

Initially while developing the scorecard it is important to identify key performance areas in learning and growth and show how these cascade forward into the internal, customer, and financial performance areas. Now, managers break broad goals down successively into vision, strategies, strategic initiatives and metrics.

Now , for example, imagine that an organisation has a goal of maintaining employee satisfaction in its vision and mission statements. This would be the organisation's vision in the domain of learning and growth. Strategies for achieving that learning and growth vision might include approaches such as increasing employee management communication. Initiatives undertaken to implement the strategy could include regular scheduled meetings with employees. Finally, managers would want to test their assumptions about the relationship between employee satisfaction and the downstream areas such as internal, customer, and financial performance. For example, satisfied employees may be more productive and less likely to quit( internal), which leads to better products or services and customer relations(customer), which leads to lower employee recruiting and training costs and greater sales and repeat sales(financial).This will be a sequence of causal relationships.

Thus balanced scorecard is a tool designed to translate an organisation's mission, vision, and strategy into tangible results.