"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.

Firstly it is important to stress how the BSC can be a dynamic feature in the motivation of “shop floor” employees and lower management. As we can see from appendix 1, there are four main areas of the scorecard which help specify where the measurements are going to take place. The advantage of this process of measurement is the way in which it has to take information from a number of resources. This in effect draws all the departments together as one group which in itself helps employees to focus on their tasks and to realise importance placed on these tasks and sub-activities. This creates the goal of every department and if this goal is perceived as appealing then this will drive employees to aid management to achieve this goal. From this we find there is a greater clarity in the goal of a workforce and in turn can aid corporate strategy; employees feel more involved and incorporated in to the long term strategies of a company with which comes a variety of advantages, employers have better quality information with which they can use to generate new business ideas.

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Before I move to my second point I need to expand on the advantages of groups. The BSC forces the creation of a group, the advantages of groups are well defined by Mullins, Laurie J (1993) as, membership of groups provides; individuals with opportunities to express initiative and creativity, companionship and support from colleagues and protection from external pressures and threats. Groups also have the combined efforts of individuals to provide joint expertise that will give a synergetic effect to solve the increasingly complex problems that face the modern organisation today. From these advantages the effectiveness of a group ...

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