• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The Balanced Scorecard. According to Kaplan and Norton (1996:75) building a scorecard can help managers link todays actions with tomorrows goals.

Extracts from this document...

Introduction

Introduction The increasing use of organisational measurement systems is changing the way mangers run companies. According to Hasan and Tibbits (2000) the balanced scorecards are a formal management system that provides a realistic framework linking performance measurements to strategic objectives. The interests of key stakeholders such as owners, customers and employees are integrated by the balance scorecards. According Dabhilkar and Bengtsson (2004) balance scorecards cards are seen as a new approach for strategy development and deployment that has entered management. It is also known as a multidimensional approach to performance measurement and management control that is linked specifically to organisational strategy (Dabhilkar and Bengtsson, 2004:2). According to Kaplan and Norton (1996:75) building a scorecard can help managers link today's actions with tomorrow's goals. They developed it to address the perceived shortcomings in financially - oriented performance measurement systems. The Balanced scorecard is known to supplement traditional financial measures with criteria that measure performance from three additional perspectives: customers, internal business processes and learning and growth. It helps companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth. It is vital to understand that the scorecard isn't a replacement for financial measures but a complement. The balanced scorecard helps managers not to rely on short term financial measures as the sole indicator of the company's performance (Kaplan and Norton, 1996:75). ...read more.

Middle

Therefore, the main point generally being highlighted in this perspective is that is that current emphasize on financials can lead to unbalanced situations when associated to other perspectives, then conceivably a need to include additional financial-related data, such as cost-benefit data and risk assessment, in this category is necessary (Markisons et al, 1999:73). * Customer Perspective It is primarily concerned with delivering value to customers as it defines the customer/market segment in which it competes in. Thus, by means of suitable strategic objectives, measure, targets and initiatives that the customer value proposal is represented in and the customer perspectives side through which the firm can achieve a competitive advantage is the envisioned market segment (Butler, Letza and Naele, 1997:153). However, the recent management philosophy has shown that an increasing understanding of the importance of customer focus and satisfaction in any company can either worsen or improve the conditions of the business (Butler et al, 1997:153). This generally means that if customers are not satisfied, they will eventually find other suppliers that will meet their needs which will lead to a decline in the company's financial position (Butler et al, 1997:153). Meanwhile, the opposite can happen meaning that a good a set of results from this perspective can lead to quite impressive future financial gains (Butler et al, 1997:153). Furthermore, in the process of developing satisfaction metrics customers view the company in terms of cost, quality, time and performance with the objectives that ...read more.

Conclusion

3rd Edition. Juta and Company Limited: Cape Town. 2. BUTLER, A., LETZA, R.S. and NAELE, B., 1997. Linking the balanced scorecard to tratsegy. Long Range Planning. 30, 2:153. 3. CHIANG, C. and LIN, B., 2009. An integration of balanced scorecards and data envelopment analysis for firm's benchmarking management. Total Quality Management & Business Excellence. 20,11:1153-1172. 4. DABHILKAR, M. and BENGTSSON, L., 2004. "Balanced scorecards for strategic and sustainable continuous improvement capability". Journal of Manufacturing Technology Management. 15, 4: 350 - 359. 5. DENTON, G.A. and WHITE, B., 2000. Implementing a balanced-scorecard approach to managing hotel operations. Cornell Hotel and Restaurant Administration Quarterly. 41,1: 94-108. 6. FIGGE, F., HAHN, T., SCHALTEGGER, S. and WAGNER, M., 2002. The sustainability balance scorecard-linking sustainability management to business strategy. Business Strategy and Environment Review. 11, 5:270-271 7. HASAN, H. and TIBBITS, H., 2000. Strategic management of electronic commerce: An adaptation of the balanced scorecard. Internet Research.10,5: 439-450. 8. ITTNER, C.D., LARCKER, D.F. and MEYER, M.W., 1997. Performance, compensation and The balance Scorecard. The Wharton School - University of Pennsylvania. 12, 5:1-57. 9. MARKISONS, R., DAVISON, R. and DENNIS, T., 1999. The balance scorecard-a foundation for the strategic management of information system. Decision Support System. 25, 2:73. 10. SCHNEIDERMAN, A.M., 2004. Why Balanced Scorecards fail. Journal of Strategic Performance Measurement. 2,1:6-11. 11. STEWART, A.C., HUBIN, J.C., 1996. The balance Scorecard beyond Reports and Ranking. Planning for Higher Education. 20,2:37 -42 12. STAIR, P., REYNOLDS, Q. and CHESNEY, H., 2012. Fundamentals of Business Information Systems. (2ed). Cengage Learning EMEA: Hampshire ?? ?? ?? ?? 1 | Page ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Management Studies section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Management Studies essays

  1. Leadership Theories - this review seeks to determine which theoretical perspectives, theories and schools ...

    These can be called competencies..." - Boytazis & Saatcioglu, 2008:93 "Competencies are a behavioral approach to emotional, social, and cognitive intelligence" - Boyatzis, 2008: 7 The competence-based perspective can be seen as a collage between the personal growth and the cognitive perspectives.

  2. Comparing Leadership styles of Western and Asian Managers.

    * Roles and rules are precisely defiend and documented. * German management puts a great emphasis on planning. * Punctuality, punctiliousness, discipline, Accuracy and orderliness are certainly characterstics that apply to the German management model." 2.7.2 British Leaders British managers due to their frankeness and politeness towards their workers describe as traditionally emphasising social skills and pragmatism. Mole (1990)

  1. ITC - diversification strategy

    The business line is doing extremely well. Ashirvaad atta has been No. 1 for the last two years. ITC a market share of 53% in the branded atta segment. ITC salt has a market share of 15% with it. Currently, ITC offers only spice powders and cumin seeds but planning to enter into blended spices segment.

  2. How relevant are Fayol's ideas on managing groups and individuals in today's business world?

    of a concern, is great strength in that concern' (Fayol 1949, 40). Team building exercises are an extremely popular tool today in developing team strength and morale. Trust and unified commitment and mutual understanding are all characteristics of effective teams, and can be developed and fostered by such team building

  1. General Management - organisation, leadership and theories.

    Develop a career plan. Think about what you want to do and find out more about the kind of training, education, and skills you will need to achieve your career goal. 2. Assess your skills and interests. Think hard about what you enjoy, what you are good at, what kind of personality you are, and the values you hold.

  2. Innovation For Business Success. It is possible to be innovative in both large ...

    In one operation, it found that certain support processes could be moved from a remote and therefore expensive location to a much lower cost facility, and that it could be re-engineered to make it much more efficient too. It is fair and reasonable to say that while it has little

  1. In this essay, I will look at the importance of stakeholders in todays organisations, ...

    In any aspect of business, communication is key. If you don't communicate, how can you understand the views of people relevant to your organisation? You can't. Table 1 below shows the main groups of stakeholders and their potential interests. Meeting the interests of stakeholders is necessary for the organisation to have any chance of succeeding.

  2. To complete this assignment on research method process for strategic managers, I will locate ...

    Attracting local consumers towards themselves was not as difficult as retaining them, a task which these foreign franchises achieved wonderfully, and a task which left ?Juada Balta? floundering in confusion at its own home turf, thereby hurting the their profitability along with itself as a local business.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work