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"Balance Scorecard" is a key performance management methodology

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The Balanced Scorecard "Balance Scorecard" is a key performance management methodology that has come of age over the past few years and is now pervasive in all kinds of organisations. The scorecard has spearheaded the rising popularity of performance management measurement in the 1990's. Evaluate the Balanced Scorecard as a performance measurement tool and discuss the value of cost and management accounting within it. The balance scorecard (BSC) has indeed played a crucial role in the development of organisational behaviour in the last decade. It has particularly improved the working lives of managers as it provides a systematic way of measuring performance that not only gives feedback but also clarifies everyone's vision within the organisation, confirms strategy which in turn transfigures into action. Feedback would include items on internal processes and external outcomes which aids continuous improvement, or kaizen as it is more commonly known, to strategic performance and in turn results. If the BSC is fully incorporated into the business, i.e. employees are fully aware of the change and receive proper training so they are not afraid of the system and are supported by management, the potential is there for it to be not only just an academic exercise but for it to be the heart and possibly the nerve centre of any organisation. ...read more.


On these perspectives the decision makers will develop metrics, collect data and analyze them to get the desired result. Each perspective hones in on what is the most important factor to the organisation under analysis. For example, the learning and growth perspective will show managers where training is most needed and where it has been most successful (See appendices 3 and 4 for examples on successful and unsuccessful training). The business process metrics allow the managers to know how well their business is running and whether its products and services conform to customer requirements. The customer perspective metrics will show how well customer requirements are being met, this has increasingly, in the last few years, been a more crucial metric. As the BSC has to be "assembled" the performance outcomes are tailored to the business and presented in a format that only the organiastion will understand. It requires the business to prepare metrics so they can be based alongside the strategic plan, which provides the criteria for metrics which are most desired to be watched by management. Decision makers then examine the measured processes and strategies to guide the company and provide feedback. ...read more.


Its performance measures and strategic plans can provide rational guidance for resource allocation which some organizations have gone so far as to develop flexible strategic organizations and financial management systems that allow continuous reallocation of funds, without the need for repeating efforts in budgeting. To conclude, the BSC is an extremely valuable performance measurement tool as, once implemented, it can provide a whole range of advantages such as aligning everyone in the business behind a single strategy, better budgeting and planning, identifying most needed change and best strategies and practices and enables more opportunities for innovation and creativity. Some disadvantages to BSC are, it is a very labour intensive project, management could misinterpret results or gain the wrong results if metrics are badly prepared and it is a very complex project which may be feared by some employees. However the question which will remain in the minds of all upper level managers wishing to implement BSC is, "Will the initial outlay of cost and time be worth the benefits which BSC brings?" If the management of the implementation of the BSC is properly controlled and planned and with the appropriate training given to employees there is no reason why the BSC could be the most influential tool in the success of any business. ?? ?? ?? ?? X02501 Word count-1,464 ...read more.

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