Question

a.    Discuss the basic features of the Balanced Scorecard. How does the Balanced Scorecard communicate strategy to the organisation?

b.    How is strategy translated into performance measures?

Answer 1

Answer to 1a)

Balance ScoreCard is a set of Financial & Non Financial measures relating to Company's Critical scucess factors.

It provides information to Management to assist in Strategy formulation & acheivement.

The main objective of Balance ScoreCard is to provide assistance for translating a Firms strategic objective into a defined set of Performance measures.

It combines financial measures of past performance with drivers of Future performance. Its objectives are derived from Firm's vision & strategy.

• Balance ScoreCard brings strategy & mission as the centre of Management Focus. It helps the firm in assessing overall performance, improve operational process and helps management to develop better ways for improvement.
• It helps in generating a single Management Report for issues like Quality Control, Just in Time Procedures, Economic Order Quantity
• Its helps Managers to consider all important Performance Measures and allows them to check whether improvement has been made at one area at the expense of other.

Answer to 1b)

Strategy is the gateway for translating such into Performance measures, Strategy involves a systematic process by which a Firm seek to improve its overall performance by examing its long term objectives. It involves comparing high level aspects such as developing new products and services, Core competencies etc. Strategies helps in feedback and learning and emphasis on integrated combination traditional and non traditional measures.