The Balance Scorecard 150

7/27/2019 The Balance Scorecard 150

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The Balance Scorecard

A Strategic Management ---- a new

approach developed in the early 1990’s by

Robert Kaplan and David Norton.

This approach provides a clear prescription

as to what companies should measure in

order to “balance” the financial perspective.



Introduction:------

The Balanced Scorecard is a management

system that enables organizations to clarify

their vision and strategy and translate them

into action.

It provides feedback around both the

internal business process and external

outcomes in order to continuously improvestrategic performance and results.



Methodology:----------

The Balanced Scorecard methodology buildson some key concepts of previousmanagement ideas such as TQM (Total

Quality Management) including customerdefined quality, continuous improvement,

employee empowerment and primarily

measurement-based management and

feedback.



Four Perspectives

The Balanced Scorecard suggests that weview the organization from fourperspectives and to develop metrics, collect

data and analyze it relative to each of these perspectives.

The Learning and Growth Perspective

The Business Process PerspectiveThe Customer Perspective

The Financial Perspective.



Learning and Growth Perspective

To Achieve the vision, how will we sustainthe ability to change and improve.

People need to constantly learn and grow to

accept the desired changes happening in theorganization This is an important perspectiveas it takes into consideration Learning andGrowth of employees so that they don't resist

change and therefore improve continuously.



Internal Business Process

To satisfy the shareholders and customerswhat business process must one be excellent.

All the business process should be efficient

and effective so as to satisfy the customer'sdemands and shareholder's needs.

Internal business Process are importantaspect for productivity and overall attainmentof organizational goals and objectives.



Customer Perspective

To achieve the vision, how should oneappear to the customers

Customers are one of the most important

asset of the organization. Their satisfaction isof utmost important for the business. Henceto take the customer aspect or perspectiveinto consideration is necessary.



Financial Perspective

To succeed financially how should oneappear to the shareholders. The objectives,targets measures and initiatives should be

taken into consideration.Financial perspective is the most important

perspective. It helps the organization to knowthe cost effectiveness and profitability of the

organization



Double — Loop Feedback

In order to shield the customer fromreceiving poor quality products,aggressiveefforts were focused on inspection and

testing at the end of the production line.True causes of defects can never be

identified and there is always inefficienciesdue to rejection of defects. Hence the causes

of variation needs to be identified and fixed





Double — Loop Feedback

The Balanced Scorecard incorporatesfeedback around internal business processoutputs, as in TQM, but also adds a feedback

loop around the outcomes of businessstrategies. This creates a “double-loopfeedback” processes in the balancedscorecard.



Thank You

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The Balance Scorecard 150