Essay on Putting Balance Scorecard to Work- Critical Analysis

928 Words Sep 2nd, 2010 4 Pages
In this article Kaplan and Norton have talked about implementation of Balanced Scorecard as a management tool which provides executives with a comprehensive framework translating company's strategic objectives into a coherent set of performance measures. They argued that by only looking at the financial returns the managers will fail to get overall strategic view of the company. The balanced scorecard helps in understanding organization's strategic objectives and operational processes. The different perspectives which balance scorecard looks at are:

1. Financial Perspective – How does firm look to the shareholders?
2. Customer Perspective – It addresses what the customers expect.
3. Internal business perspective – It help the
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The authors introduced the use of the balanced scorecard within three companies in three different industries.

Rockwater (underwater engineering and construction company) – Used BSC to transform its vision and strategy (under changing environment of competition and customer expectation) into sets of performance measures.

Apple Computer - Balanced scorecard to focus senior management on a strategy that would expand discussions beyond gross margin, return on equity, and market share. Balanced scorecard for AMD was also highlighted by the authors. From the experiences of these companies and others, the authors have found that the balanced scorecard is most successful when it is used to drive the process of change.

Authors recommended following steps to be followed in cases where clearly defined strategy does not pre-exists to be used by BSC.

1. Preparation - Defining to business unit that a top- level scorecard is appropriate.
2. First Round Interviews - The facilitator takes interviews of executives to get input on strategic objectives and the possible scorecard measures.
3. First Round Executive Workshop - The group debates on the proposed mission and strategy statements until they reach on consensus.
4. Second Round Interviews - The facilitator compiles information and then interviews the executives about the tentative balanced scorecard.
5. Second Round Executive Workshop - More debate

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