Nobody downloaded yet

Balanced Scorecard - Essay Example

Comments (1) Cite this document
Summary
Balanced Scorecard Approach: A Critical Review
Introduction
Balanced Scorecard is a strategic performance management tool, which is mainly used by managers to regulate strategy execution activities and subsequent monitoring processes. …
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.4% of users find it useful
Balanced Scorecard
Read TextPreview

Extract of sample "Balanced Scorecard"

Download file to see previous pages Although the first Balanced Scorecard was designed by Art Schneiderman in 1970, the concept of Balanced Scorecard was extensively developed and widely popularized by Robert S. Kaplan and David P. Norton. According to them, a Balanced Scorecard “defines the set of near-term objectives and activities, the drivers that will differentiate a company from its competitors and create long-term customer and shareholder value, the outcomes.” (Kaplan & Norton, 2001, p.76). The most fascinating feature of a Balanced Scorecard is that a set of financial and non-financial tools are presented in a single succinct report by comparing each tool to a ‘target’ value. This strategic performance management tool was developed with intent to replace traditional operational reports and to present a concise summary that includes the most relevant information. The first versions of Balanced Scorecard held the view that its relevance was greatly related to corporate strategy and the proposed design methods. As noted by Kaplan & Norton (2001), during the initial stages, it was believed that this tool would most fit the needs and requirements of mid-sized firms and hence the model was mainly employed to measure aspects like customer, internal business processes, and learning and growth (pp.76-77). This tool was periodically modified and it became popular across the globe by the end of the 20th century. However, modern management experts argue that this model is not sufficient enough to manage complex strategy implementation processes. This paper will critically analyze the potential limitations of the approach while comparing it with the emerging approaches to organizational strategy. Limitations of the Balanced Scorecard approach It is identified that the Balanced Scorecard model of Kaplan and Norton is not really effective. In the modern complex business environment, setting right objectives and following them properly is extremely essential to ensure the sustainable development of any organization. In order to follow the objectives properly, it is absolutely vital to monitor every action with a more strategy focused measurement system. Today’s scholars opine that the Balanced Scorecard model is not so optimal and strategy focused; and therefore, this system cannot ensure a sustainable business environment. In the view of Rillo (2004), one of the most noticeable limitations of the Balanced Scorecard model is that it could not effectively connect cause and effect relations time-wise. The author continues that an important strength “that the Balanced Scorecard is claimed to possess is the strong causal interrelations between the different elements that are mapped using the core strategy of an organization as a source as the financial measures have been considered merely a reflection of past activities already taken place” (Rillo, 2004). Critics argue that this model is not supported by the Hume criterion for cause and effect relationship, which states that one activity leads another in time and there exists a causal connection between these two activities. Furthermore, it seems that this concept does not give necessary emphasis on time factor, which is vital to ensure the success of a strategy execution process. Likewise, Kaplan and Norton (2001) tell that strategic objectives must be categorized into budgetary measures so as to be pursued on predetermined basis (pp.294-296). As per this view, different objectives cannot be monitored until predetermined intervals and the measurement method is capable of providing relevant information for analysis. Many of the modern theorists do not know whether or not there exists a causal interrelation between customer, internal business processes, and learning and growth in ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Balanced Scorecard Essay Example | Topics and Well Written Essays - 2000 words”, n.d.)
Retrieved from https://studentshare.org/business/1395044-critical-review-of-the-balanced-scorecard-approach
(Balanced Scorecard Essay Example | Topics and Well Written Essays - 2000 Words)
https://studentshare.org/business/1395044-critical-review-of-the-balanced-scorecard-approach.
“Balanced Scorecard Essay Example | Topics and Well Written Essays - 2000 Words”, n.d. https://studentshare.org/business/1395044-critical-review-of-the-balanced-scorecard-approach.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
ba
baron69 added comment 7 months ago
Student rated this paper as
I had an issue with a essay types of works. All until I came across this website and this particular document. Even though "Balanced Scorecard" is far from my interests, the structure is so great that I use it all the time as an example for my own works.

CHECK THESE SAMPLES OF Balanced Scorecard

Corporate Balanced Scorecard

...?Introduction Organizations require performance measurement as a way of ensuring that they have substantial level of control, and in a way would be able to employ corrective measures if necessary. The Balanced scorecard could be such a good measure that would be able to help an organization obtain a remarkable control, performance measurement and a good feedback mechanism to ensure if it has substantially obtained and satisfied established organizational goals. The balanced scorecard is a strategic management and measurement system measuring financial, customer, internal business process and learning and growth performance of an organization and connecting strategic objectives to comprehensive indicators (Armstrong, 2001, p.136... ). The...
10 Pages(2500 words)Research Paper

Balanced Scorecard

...?Running head: Balanced Scorecard Balanced Scorecard Insert Insert Grade Insert 12 March Balanced Scorecard Introduction The Balanced Scorecard was first developed in the early 1990s to solve organization and business measurement problems, although its use has evolved among companies into more important functionalities. Business and organizational operation environments have increasingly become complex, thus necessitating more complex applications rather than just measuring performance in this era of information. Although organizations measured their performance even before emergence of the...
10 Pages(2500 words)Essay

BALANCED SCORECARD

...? BALANCED SCORECARD WEEK 6 Executive Summary Balanced Scorecard is an important tool developed to measure the level of performance mainly of the employees in an organization. Procter and Gamble (P&G) is a reputed FMCG company which operates its business worldwide. It is headquartered at Ohio, United States. The company is engaged in the business of offering consumer goods to its customers in packaged form. The sales and marketing division of P&G group is committed towards providing best services to its customers. This study entails the preparation of a balanced scorecard for the strategies to be implemented in the sales and marketing...
10 Pages(2500 words)Essay

Balanced Scorecard

...? Balanced scorecard [Semester] Balanced scorecard Introduction A balanced scorecard is a performance measurement tool used in strategic management to discover and develop a variety of internal processes as well as assessing of the impacts of the external factors. In particular, the purpose of this technique is to measure and assist organizations in the implementation of their goals and strategies. The balanced scorecard method is used by organizations for different purposes including strategic planning, organizational and strategic positioning, improvement of communication and management...
8 Pages(2000 words)Assignment

Balanced Scorecard

...Introduction This paper provides a study of balanced scorecard measure and the significant of its measures in achieving the goals set by an organization. The most important of the company's activities lies in driving maximum level of customer satisfaction through enhanced performance on the part of the company and its people. This objective cannot be achieved unless the company sets specific performance goals and the specific measures to evaluate the level of performance towards the achievement of these goals. As customer satisfaction is the main driver of the organization's profit target, it is of critical importance for the company to enhance its performance level to achieve its goals....
5 Pages(1250 words)Essay

Balanced Scorecard

...Question The expectation of Halifax, Inc. in Balanced Scorecards were to supply efficient and evaluative operational performance, focus on the achievement of core missions, comprehension of the internal and financial performance through analysis of the views and opinions of staff, clarity and definition of customer relations and outlook of managers on improvement and critical performance (Kaplan & Norton 1998). The team assured that every material needed by the scorecard existed. Moreover, they wanted the appropriate modifications on cultural change possible. This held the Customer Focus programme, where the perspective starts at performance management and personal development. Halifax...
12 Pages(3000 words)Essay

Balanced Scorecard

...The Balanced Scorecard s Introduction This present research paper mainly focuses on the Balance Scorecard of Dual-Tech Inc, which is a fictional organization that specializes in the selling and distribution of electrical appliances. The research paper will seek to describe how the balanced scorecard helps the management of Dual-Tech Inc to identify important information requirement. Secondly, the research paper will identify the information systems that Dual-Tech Inc will use to obtain information pertaining to each scorecard component. The Balanced Scorecard Kaplan and Norton (1996), in...
2 Pages(500 words)Research Paper

Balanced Scorecard

...September 8, Summary: Balanced Scorecard Balanced scorecard is reportedly a strategic management tool that provides measures or techniques which enable managers to determine the ability of the organization to apply strategies that achieve organizational goals. As indicated, these measures include both financial and operational measures, internal processes, as well as innovation and improvement activities. There have been four crucial perspectives in the balance scorecard concept, such as: the customer, internal, financial, and innovation and learning. The noted benefits of using balanced scorecard as a...
1 Pages(250 words)Essay

Balanced scorecard

...Balanced Scorecard for Charitable Organization ID Balanced Scorecard for Charitable Organization Introduction In strategicmanagement for any organization ranging from non profit to profit making organizations, there is need to include balanced scorecards to help create a sense of direction for the management to follow during the process of running the organization (Hannabarger, Buchman & Economy, 2011). During strategic management, a number of goals may be developed aiming at improving service delivery and the general aspects that the organization engages in. though balanced score cards, it becomes easy for the...
8 Pages(2000 words)Essay

Balanced Scorecard

...HUMAN RESOURCE- BALANCED SCORECARD Lecturer’s Balanced scorecard Managers in organizations want a balanced presentation of the operational and financial measures to ensure organizational success. The balanced scorecard helps in achieving this by tracking all the essential elements of the organizational strategy from partnership, teamwork, continuous improvement and global scale. The scorecard provides managers with a set of measures that provide the results of actions already taken. It is important for complementing the financial measures on customer satisfaction, organizational innovation, its...
3 Pages(750 words)Book Report/Review
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Balanced Scorecard for FREE!

Contact Us