Balanced score card - Assignment Example

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Balanced score card Introduction Companies all over the world are searching for the most effective way to enable to succeed in the global competitive market. While some adhere to the traditional survival tactics, others implement more recent methods, which have a great effect on the profitability of the organizations…
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Download file to see previous pages While some people assert that the balanced score card is an effective method, others tend to contradict this, presenting evidence to support their claims. Among the corporations that have adopted this concept are the Boom-Bust Construction Ltd (BBCL) and The El Nino Conglomerate Group / El Dorado civil engineering Division. This study will thus analyse, interpret and evaluate the balanced score card concept and its effects on the two companies. The balanced score card Stewart, W. E 2001, ‘Balanced Scorecard for Projects’, Project Management Journal, Vol. 32, no.1, pp. 38-53. Stewart (2001), gives a holistic view about balanced scorecards. He asserts that a close look at many organizations reveals they have many things in common. First, organizations are unpredictable. Each day is unique, making it hard to determine the outcome based on the decisions made. Third, organizations are deceptive, as they try to hide outcomes if they are contrary to shareholders’ expectations. This not only brings more complications but also prevents the companies from making future decisions based on facts (Stewart 2001). The use of a balanced score card emerged to offer solutions concerning the progress of companies in a competitive environment. As the name implies, a balanced score card tries to balance theories of a strategy with the methods used in its execution (Nair 2004). In other words, it tries to balance the internal and external factors in order to win the competencies of tomorrow. In this regard, it tries to look at an organization from all dimensions, develop metrics and collect data for analysis in relation to all the dimensions. Four major perspectives have been identified namely; the business process perspective, the customer perspective, the financial perspective, and the learning and growth perspective. These perspectives offer an interpretation of the overall vision of the company and the approaches the organization follows to fulfil its agendas and culture (Stewart 2001). Kaplan, R. S., & Norton, D. P. 1996, ‘Using the Balances Scorecard as a Strategic Management System’, Harvard Business Review, pp. 75-85. In their article titled ‘Using the balanced scorecard as a strategic management system’, Kaplan and Norton explain how designing and implementing a balanced scorecard can be of great benefit to the organization. They agree that, balanced scorecards are different from one organization to another. This also makes their designs to be different as well as the time taken to implement them. However, there are common steps that the management needs to follow in order to design an effective balanced scorecard. Using a sample of a successful balanced scorecard, the following are the steps every company needs to follow. First, the organization needs to clarify its vision by stipulating what it wants to achieve with the scorecard. Then, the organization should communicate with middle managers on the new development. Middle managers are the best communication channels in an organization, as they link the top management and the line workers. The organization should then develop business units, which translate their strategies into their own scorecards. The other step is to review the business unit scorecards so that the management may be able to align the strategies with the organizational goals (Kaplan & Norton, 1996). Once the unit scorecards are reviewed, the organization moves forward to ...Download file to see next pagesRead More
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