Using Balanced Scorecard to Improve Performance - Dissertation Example

Download file to see previous pages The balance scorecard methodology is a part of the performance analysis tool. This tool was introduced by Robert S. Kaplan and David P. Norton. This helps a company to determine its long-term goals and strategies. Basically, a company is analyzed from four basic perspectives: Growth and Learning, Customer base and satisfaction, financial aspect, and finally internal business process of the company (Balanced Scorecard Institute, 2012).

The balanced Scorecard concept has become deeply embedded in all kinds of organizations around the world. Organizations have used systems that consist of a mix of financial and non-financial measures in order to track the progress for quite some period of time. The balanced scorecard terminology was coined by Schneider man as the root of performance management as an activity that runs deep in management practice and literature (Scarlett, 2001, p.41). Kaplan and Norton included the details like nonfinancial measures which would help to compare the target values within a single report. The balanced scorecard is considered one of the most crucial management ideas of this century. The concept was first coined by Robert Kaplan and David Norton in 1992. The idea of a balanced scorecard consists of a performance prism, third generation balanced scorecard, and result-based management. In the mid-1990s organizational theorists had taken up Norton and Kaplan's work and modified the method of the balanced scorecard (Kaplan and Norton, 1996, p.41).

At the beginning of the century, Frederick Taylor established the concept of resource allocation. In the 1920s motion studies and an assembly line were prepared for the production processes. In the 1930s the main topic of studies was the motivation of employees. In the 1940s and 1950's the first linear and statistical methods were introduced using the logistics of operation management and its implications. In 1980's the whole array of management techniques was initiated. Today's companies are in the middle of revolutionary transformation. The emergence of the information era in the last decade has resulted in many fundamental assumptions turning obsolete. The information age required an appropriate environment for both service and manufacturing organizations in order to ensure competitive success (Chiu, 2011, p. 3-4).

During the industrial age, companies created new distinctions between two groups of employees. The elite group consists of managers and engineers. These people used their skills to design products and services. The second group was composed of those people who actually produce the product. The labor force consists of those individuals who produced the products. ...Download file to see next pages Read More