Question

Should the scorecard of a company change as the company changes or stay the same?

Answer 1

Answer: scorecard will stay the same.

Balance scorecard:

This is a strategic management tool of an organization indicating set of performances and concentrated on financial aspect, customer aspect, internal process aspect, and learning and growth aspect.

Suppose the set of performances are as below:

Financial aspect: increase in revenue by 20%

Customer aspect: decrease in customer grievance application by 55%

Internal process aspect: decrease in overhead cost by 5%.

Learning and growth: increase in productivity of sales team by 10%

These are all predetermined rates. The company has to gradually improve performances in order to reach these targets. But, sometimes there may be bottlenecks -- although making the full use of resources the scorecard may not be achieved. In such a situation the company needs to change something – suppose an additional market is created in order to reach the desired revenue. This must not change the scorecard, since the change of sale is made for the fulfilment of 20% (say) increasing revenue.

Therefore, there will be no change in scorecard.