Balanced Score Card - Essay Example

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 tools of performance, there are now other aspects also which are equally critical in terms of customers, employee satisfaction, innovative methods, quality, the 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 a 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 scorecards 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 balanced scorecard needs to be adaptive and should be in terms of the special needs of the organization and the areas that need to be focused on 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 the organization, As a measuring tool for aiding management decision making, the Balanced 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.