Question

Discuss the balanced scorecard in its four perspective and elaborate on its advantages.

Answer 1

Following are four perspective of Balance Score Card

(1) Financial Perspective

(2) Customer Perspective

(3) Business and production process perspective

(4) Learning & Growth Perspective

(1) Financial Perspective

Financial perspective check whether company's strategy and operation add value for shareholders.

(2) Customer Perspective

Customer perspective check check the business through eyes of Customer. It checks to what extent business meeting customer expectation.

(3) Business and Production process perspective

It checks internal process which drives the organization.

(4) Learning and Growth Perspective

Learning and Growth perspective checks potential future performance.

In all above four perspective management set certain goals and performance measure through which the attainment of these goals may be judged.

Advantages of Balance Scorecard :

• Balance score card provides understanding of business goals and strategies at all levels of organization.
• Balance score card bring organization's strategy and vision to the center of management focus, so management never deviate from these.
• Balance score card integrates financial and non financial goals and performance measure into a single system.
• Balance score card adopt balanced and comprehensive  approach for judging and controlling an organization's performance.