The Balanced Scorecard As A Strategic Management System Essay
In the article “Using the Balanced Scorecard as a Strategic Management System”, Robert S. Kaplan and David P. Norton have introduced the balanced scorecard, a performance tool that help the managers in predicting future performance. In fact, the balanced scorecard method has broken the traditional management system, where the company only focus on financial performance as an indicator of overall success. According to Kaplan and Norton, they think that financial performance can only measure what had already happened, and it is unable to evaluate a company’s future performance. In the industrial era, the conventional management system that focus on financial might be a valid approach. However, with today’s informational society, the traditional approach is not a comprehensive performance management. Companies requires to invest in their customers, suppliers, employees, organizational processes, and technology in order to achieve sustained developments. Based on this understanding, balanced scorecard suggests that a company should examine it own performance based on four perspectives: financial, customers, internal business process, and learning and growth. By using the balanced scorecard, a company can clarify and implemented its overall strategies, align individual goals with the strategy, and create a long term strategic objectives that is coherent with its short term actions.
According to Kaplan and Norton, balance scorecard can translate…