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Balanced Score Card - Essay Example

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The balanced scorecard is a management tool and not only a measuring yardstick that facilitates firms to sharper their visions and strategies and put them into actions for achieving corporate gains but is also concerned about the chanelizing the business endeavors to the foresight and strategies of the programmed…
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Balanced Score Card
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Balanced Score Card The balanced Scorecard underpins the age-old financial measures with the standard parameters that determine the following aspectsof business enterprises:
1. from the customers' viewpoints.
2. from the point of view of internal business processes.
3. from the perspective of Innovative and creative ideas.
4. from the angle of learning practices.
(Geense 2005).
The balanced scorecard is a management tool and not only a measuring yardstick that facilitates firms to sharper their visions and strategies and put them into actions for achieving corporate gains but is also concerned about the chanelizing the business endeavors to the foresight and strategies of the programmed. (Welcome to the Balanced Score Institute 2007).
It takes into account both the internal and external factors in order to continuously benefit strategic performance and when successfully operationalised it. (What is a balanced Score Card 2007). The main aspects that balance scorecard is concerned about is the constant measurement and monitoring of key factors relating to external and internal aspects of the business. "The aspects that the scorecard contains should be quantifiable or measurable. This is because it would be difficult to interpret something that cannot be measured in the first place." (Metrics, Scorecard, KPI's Measure Tools 2008). It could be seen that although financial parameters are seen as measuring tool of performance, there are now other aspects also which are equally critical in terms of customers, employee satisfactions, innovative methods, quality, quantum of sales, etc. The fundamental truth behind the Balance Score Card is to ensure that " that no single measure can provide a clear performance target or focus attention on all the critical areas of business, they proposed the concept of a Balanced Scorecard as a more sophisticated approach for meeting these shortcomings." (Pienaar & Penzhorn, 2000, pp.202-209).
Just as financial ineptitudes could bring down a company, in the present context it is seen that even fall in sales, loss of goodwill, quality issues, etc could spell disaster for the company. at cannot be measured in the first place. The following areas are where balance score cards need to concentrate and provide information and measurement strategies: customers, employees, innovation, processes, performance, suppliers, and finally the community.
However, there are certain aspects of balanced scorecards that speak of the fact that sometimes "the scorecards are not balanced, the scorecards are not linked to the strategic directions of the enterprise, and the scorecards are not institutionalized within the organizations." (White Paper: Balanced Scorecards as Strategic Navigational Charts 2008).
"Strategy scorecards along with their graphical representations on strategy maps provide a logical and comprehensive way to describe strategy. They communicate clearly the organization's desired outcomes and its hypotheses about how these outcomes can be achieved." (Kaplan & Norton 2001).
It may thus be concluded that to a very large extent, the balance score card needs to be adaptive and should be in terms of the special needs of the organization and the areas that need to be focused by the use of such methods. Primarily it is desired to chalk out the benefits and objectives that could be derived from BSC. The action plans need to be made in line with the policies and procedures of he organization , As a measuring tool for aiding management decision making, the Balance Score Card method has been seen to be an effective and efficient tool that could possibly result in enhanced performance planning and execution for the organization. As of now, in the business world, the balanced scorecard has engendered great interest internationally. (Norrekli 2003, P.591-619).

Bibliography
GEENSE, Ir M (2005). Balanced Scorecard: Total Quality Management. [Online]. Managerialaccounting.org. Last accessed 21 June 2008 at:
http://www.managerialaccounting.org/Balanced%20Scorecard.htm
KAPLAN, Robert S., & Norton, David P (2001). Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part I. Vol.15. Last accessed 21 June 2008 at: http://www.questia.com/googleScholar.qstdocId=5002403302
Metrics, Scorecard, KPI's Measure Tools. (2008). [Online]. Measurebusiness.com: All Business News. Last accessed 21 June 2008 at: http://www.measurebusiness.com/
NORREKLI, Hanne (2003). The Balanced Scorecard: What is the Score: A Rhetorical Analysis of the Balanced Scorecard. Vol.28. P.591-619. [Online]. Accounting, Organizations and Society. Last accessed 21 June 2008 at: http://ala2003.awardspace.com/articles/pm-bsc1.pdf
PIENAAR, Heila., & Penzhorn, Cecilia (2000). Using the Balanced Scorecard to Facilitate Strategic Management at an Acadamic Information Service. Vol.50. pp.202-209. [Online]. Libri. Last accessed 21 June 2008 at: http://www.librijournal.org/pdf/2000-3pp202-209.pdf
Welcome to the Balanced Scorecard Institute: What is the Balanced Scorecard. (2007). [Online]. Balanced Scorecard Institute. Last accessed 21 June 2008 at: http://www.balancedscorecard.org/
What is a Balanced Score Card. (2007). [Online]. Balanced Scorecard Institute. Last accessed 21 June 2008 at: http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx
White Paper: Balanced Scorecards as Strategic Navigational Charts. (2008). [Online]. QPR Software. Last accessed 21 June 2008 at: http://www.qpr.com/registration.htmlmetadata_value=41237 Read More
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