Question

In 600 words or more, Apply the multidimensional framework of the balance scorecard on any organisation.

Please stick to or exceed the word limit

Answer 1

The Balanced Scorecard (BSC) is a conceptual framework, which is multidimensional. It was forwarded by Drs. Robert Kaplan and David Norton in 1992. It is used to describe, implement and manage strategy at all levels of an organization. It connects objectives, initiatives and measures to an organization’s strategy. A Balanced Scorecard is a framework for converting strategy into efforts. It promotes alignment of organizational resources with strategy. The Balanced Scorecard approach converts strategy into an integrated system.

The scorecard gives a comprehensive picture of an organization’s total performance. This is achieved by merging financial measures with other key performance indicators. Balanced scorecard is a framework for carrying out complex programs of change and for managing strategy-focused organizations. In a nutshell, a Balanced Scorecard is a performance management process and a strategy implementation tool. It has been executed in corporate and strategic business units and at individual levels in multiple organizations, belonging to private and public sectors.

The Balanced Scorecard works across four perspectives namely- Learning and Growth Perspective, Internal Process Perspective, Financial Resources Perspective and Customer Perspective. The internal process perspective motivates an organization to change and enhance the way it provides services, specifies certain strategy-related objectives and encourages productive use of resources, in order to achieve the organization's aims and objectives. The financial perspective measures and identifies deliverable services at a good price, supports maintenance of sound financial position, identifies funding mechanisms and supports accountable and responsible use of funds in an organization. It identifies resources needed to achieve the organization's customer perspective. The customer perspective is the 'top line' perspective, which represents a structural departure from the Balanced Scorecard structure of the private sector. The learning and growth perspective supports the objectives of all the other three perspectives. It identifies the organization's needs to make sure that employee skills and technological capabilities permit successful strategic efforts. It also highlights the types of training, skills and technology that are required to make an organization reach the pinnacle of success.

It is important to note that the Balanced Scorecard provides a framework for strategic action, but it depends on the organization to provide focus, commitment and hard work to execute the organization's strategic plan.