Question

Scenario

You met Dana, whose goal is to become a project manager. She has completed her project management training and learned about the balanced scorecard. She is convinced her company needs more than just financial or budgetary control, and she believes the BSC approach would be better.

Preparation

In this written assignment, you will compare basic financial controls to the balanced scorecard (BSC) method explained in your reading. The following steps will help you prepare for your written assignment:

Your Task

Write a three-paragraph essay describing the value and benefits of using a balanced scorecard for management control. Compare and contrast the BSC approach to financial controls. Do you agree with Dana that the BSC approach is better than using financial controls alone? Why or why not?. For example, you could elaborate on how BSC provides information for anticipating the future (proactive control).

In addition to the text, you are encouraged to research management control tools using reliable and properly cited Internet resources. You may also draw from your personal work experience with appropriate examples to support your references.

Answer 1

The Balanced Scorecard approach is a 360 degree approach in organisations. It had four aspects to it.

Financial Perspective

Customer Perspective

Internal Business- Process Perspective

Learning and Growth Perspective

The BSC matrix is a powerful strategy tool which defines a path on which the company should travel. It also defines the milestones that it would require to attain along the way. The BSC of a company would follow from the mission,vision and objectives of a company. At the end of the day all company goals follow from the mission and vision statements.

The BSC approach is always advantageous to a compartmentalised approach like looking at only a financial perspective or a customer perspective. As seen in Dana’s case we see her looking at the company’s strategy only from a financial perspective. This is a very myopic view. Any strategy needs to have a wider view because all functions are interdependent. Looking at it from Dana’s perspective , finance is a support function. The activities of a company can be divided into core functions and support functions . Core functions are those which directly generate revenue for the company. Support functions are those which support the core functions. Often companies make the mistake of devising a new strategy based on a past strategy. The past mistakes thus will get magnified in the future also. Balanced Scorecard gives you information to overcome past failures.

The research management tools of a company are use of data analytical,supply chain management tools,digital transformation tools,change management tools. The BSC evaluation is finally a tool to make improvements . In this context we refer to the previously mentioned management tools which will help us in identifying lacunae .