The balanced scorecard is build on the four performance perspectives. When implemented properly, the BSC perspectives contains four subparts. These are the basic components of BSC. Unless otherwise stated, these components are defined from Kaplan and Norton(1992).
Perspectives
Kaplan and Norton suggested four perspectives as a stander for the BSC. These perspectives are customer, financial, internal business process and learning and growth. All related factors affecting strategy are recorded in these perspectives. Perspectives help create a balance between the long and short term objectives and also links the the performance drivers to the desired outcomes. For that reason, perspectives are the BSC basic architecture.
Objectives
The factors …show more content…
Strategy can be defined as the organization direction and scope over the long-term to realize a benefit through resource configuration to satisfy the needs of the customer and fulfill stakeholder expectations (Hamel & Prahalad, 1994). The process of strategy development has to consider both the external and internal resources. In the ultimate analysis, the benefits of a good strategy are evident only if it gets executed as designed and in time. Strategy execution is a big challenge for the leadership in any organization (Porter, 1991). Executing a strategy is an art form that is entirely different from crafting a good one. Execution is the key to successful strategy implementation. Several barriers that impede strategy implementation have been categorized into four categories as shown in Figure …show more content…
Also, 60% of the organizations don’t link budgets to strategy and 85 % of management teams spend less than one hour discussing strategy (Kaplan and Norton, 1993). Successful implementation of balanced scorecard necessitates overcoming all these barriers.
As a strategy management and implementation, the BSC seeks to tackle the four barriers through an integrated approach that helps organizations to define the value of its assets. Organization can identify the areas that needs to improve and changes can be initiated to align with strategic objectives, allowing the organization to gradually bridge the performance gap. The implementation of strategy improves results immensely, contributing to the overall performance. According to Becker and Huselid (2006) 35 % gain in strategy implementation quality is associated with 30% gain in shareholder value. Also, Malina and Selto (2001) established that management control through the BSC seem to positively motivate employees and line them with the organization strategy, leading to positive results for the
Perspectives
Kaplan and Norton suggested four perspectives as a stander for the BSC. These perspectives are customer, financial, internal business process and learning and growth. All related factors affecting strategy are recorded in these perspectives. Perspectives help create a balance between the long and short term objectives and also links the the performance drivers to the desired outcomes. For that reason, perspectives are the BSC basic architecture.
Objectives
The factors …show more content…
Strategy can be defined as the organization direction and scope over the long-term to realize a benefit through resource configuration to satisfy the needs of the customer and fulfill stakeholder expectations (Hamel & Prahalad, 1994). The process of strategy development has to consider both the external and internal resources. In the ultimate analysis, the benefits of a good strategy are evident only if it gets executed as designed and in time. Strategy execution is a big challenge for the leadership in any organization (Porter, 1991). Executing a strategy is an art form that is entirely different from crafting a good one. Execution is the key to successful strategy implementation. Several barriers that impede strategy implementation have been categorized into four categories as shown in Figure …show more content…
Also, 60% of the organizations don’t link budgets to strategy and 85 % of management teams spend less than one hour discussing strategy (Kaplan and Norton, 1993). Successful implementation of balanced scorecard necessitates overcoming all these barriers.
As a strategy management and implementation, the BSC seeks to tackle the four barriers through an integrated approach that helps organizations to define the value of its assets. Organization can identify the areas that needs to improve and changes can be initiated to align with strategic objectives, allowing the organization to gradually bridge the performance gap. The implementation of strategy improves results immensely, contributing to the overall performance. According to Becker and Huselid (2006) 35 % gain in strategy implementation quality is associated with 30% gain in shareholder value. Also, Malina and Selto (2001) established that management control through the BSC seem to positively motivate employees and line them with the organization strategy, leading to positive results for the