Balanced Scorecard is a planned and managing system. It is used by business and industry very broadly in these days. They used this to line up the activities of business and to monitor the vision and the strategy of the company for their strategic goals. Balanced Scorecard was invented by Drs. Robert Kaplan (Harvard Business School) and David Norton for measuring the performance framework which also include non-financial and traditional financial measurement which can provide a balanced performance to the managers.
When it was invented it was only used for simple measurement but now this framework is proper strategic and managerial system. Now in the new balanced scorecard which is used by the organization for their business is changed because the new balanced scorecard change the strategic plan from smart but unreceptive file into the “marching orders” for the company on a daily basis. By using this framework company get to know the performance measurements and it also helps the managers to identify what need to be done and how it need to be done? It allows managers to perform their strategies well. In this new strategic management approach it provides the clear recommendation for company to measure their financial perspective.
PERSPECTIVES OF BALANCED SCORECARD: In balanced Scorecard there are four basic perspectives which I am discussing are as following:
All these perspective explained below:
· Financial Perspective: This perspective in balanced scorecard is very important for every organisation if they are profit, non-profit and public organization. Profit organization use this perspective for measure and control the finance and try to achieve the finance strategy. On the other side non-profit and public organizations use this perspective to measure the cost and always try to minimize the cost. The main purpose of using this perspective is to measure the cash flow and return on equity etc.
· Customer Perspective: Companies use this perspective to make sure customers are satisfied with their services. The major use of this perspective is to measure the loyalty, satisfaction, retention of customers and profitability etc. Company also measured the percentage of sales from existing customers to new customers and build customer relationship.
· Internal Business Process Perspective: This perspective is very important for every organization to make sure their internal process working smoothly if the internal process is fine then company suffering from less internal accidents and they are achieving high performance in the market. It is also help the organization to measure the manufacturing cycle every time per unit.
Learning and growth perspective: This main purpose of using this perspective is to build the leadership with the help of technology, for a leader to adopt the latest technology to develop a new product or service which can be considered and develop excellence.
When it was invented it was only used for simple measurement but now this framework is proper strategic and managerial system. Now in the new balanced scorecard which is used by the organization for their business is changed because the new balanced scorecard change the strategic plan from smart but unreceptive file into the “marching orders” for the company on a daily basis. By using this framework company get to know the performance measurements and it also helps the managers to identify what need to be done and how it need to be done? It allows managers to perform their strategies well. In this new strategic management approach it provides the clear recommendation for company to measure their financial perspective.
PERSPECTIVES OF BALANCED SCORECARD: In balanced Scorecard there are four basic perspectives which I am discussing are as following:
All these perspective explained below:
· Financial Perspective: This perspective in balanced scorecard is very important for every organisation if they are profit, non-profit and public organization. Profit organization use this perspective for measure and control the finance and try to achieve the finance strategy. On the other side non-profit and public organizations use this perspective to measure the cost and always try to minimize the cost. The main purpose of using this perspective is to measure the cash flow and return on equity etc.
· Customer Perspective: Companies use this perspective to make sure customers are satisfied with their services. The major use of this perspective is to measure the loyalty, satisfaction, retention of customers and profitability etc. Company also measured the percentage of sales from existing customers to new customers and build customer relationship.
· Internal Business Process Perspective: This perspective is very important for every organization to make sure their internal process working smoothly if the internal process is fine then company suffering from less internal accidents and they are achieving high performance in the market. It is also help the organization to measure the manufacturing cycle every time per unit.
Learning and growth perspective: This main purpose of using this perspective is to build the leadership with the help of technology, for a leader to adopt the latest technology to develop a new product or service which can be considered and develop excellence.
In the beginning was darkness. We went to work, did our job (well or otherwise) and went home - day in and day out. We did not have to worry about targets, annual assessments, metric-driven incentives, etc. Aahh… life was simple back then.