Question

What is a Balanced Scorecard, and what are the factors that need to be considered in its development? Support your response with references.

Answer 1

A balanced scorecard is a strategic planning and management system that companies around the world uses for the following purposes:

• For properly communicating, what exactly they want to accomplish
• In order to match the day to day task of the company with core strategy
• Making a priority list of different projects,products and services
• To monitor as well as measure the progress of the strategic targets in an effective manner.

The aim of a balanced scorecard is to make sure that big strategies of the companies are aligned with the daily targets and goals. It is all about connecting the dots and reducing the gap between the current working and long term goals as well as targets.

There are various that needs to be considered in its development.According to this concept, we should consider organization in 4 perspectives, these are:

• Financial: It means proper and effective use of financial resources in an effective way, this perspective views the organizational performance through financial metrics.
• Customer and Stakeholder: A company consist of many stakeholders, and it is essential that organizational performance should stood up to the expectations of such stakeholders.
• Internal process: This means that internal process like product or service quality should be maintained for better and effective organizational performance.
• Organizational Capacity: This means that the key metrics of organizational performance is its human capital, technology, culture etc.