Balanced Scorecard Essay Example | Topics and Well Written Essays - 1500 words

Balanced Scorecard - Essay Example Through this process the organization is able to balance its priorities, allocate the available resources for maximization of the profits of the organization and generate realistic business plans. Over the years several research studies have been conducted in this field of the management science, and models like Balanced Scorecard has been developed which are basically designed for helping the organizations in their drive towards being more competitive in achieving their goals. This paper brings out an evaluation of Balanced Scorecard model as applied to a public sector organisation together with the implementation of the system as well as its operation and usefulness. With a view to measuring a firm's activities in terms of its vision and strategies and to give the manager's a comprehensive view of the performance of a business, a concept which is described as Balanced Scorecard was introduced by Robert S. Kaplan and David Norton in the year 1992. There have been several studies conducted on the subject of Balanced Scorecard to develop the concept adaptable to the changing circumstances and needs of the organizations. "The Balanced Scorecard method of Kaplan and Norton is a strategic approach and performance management system that enables the organ... The four perspectives are: 1. Financial perspective encompassing the implementation of a corporate database for processing the information in a centralized and automated way. 2. Customer perspective focusing on customer needs and customer satisfaction 3. Business process perspective by designing metrics to show the performance of the organization with strategic management processes, mission-oriented processes and support processes 4. Learning and growth perspective including employee training and corporate cultural attitudes related to both individual and corporate self improvement. (Kaplan & Norton 1996) For each of the perspectives of the Balanced Scorecard four things are required to be monitored and respective scores studied. Objectives: The overall objectives of the organization need to be studied and properly scored. The objectives may relate to the profitability, marketing or capacity utilization etc. Measures: Once the objectives are established the next logical step is to identify the proper tools and parameters and define them to measure the organisational's performance towards achieving these objectives. For example the growth in the net margin or the sales in a particular region may well act as the measurement parameters. Targets: When the measurement parameters are established suitable targets need to be evolved to transform the organizational objectives into reality. Achieving a reduction in the manufacturing cost to the extent of 5% annually may be fixed as a target. Initiatives: Proper initiatives in the form of projects of programmes need to be developed as a support for achieving the set targets. If the targets are supported by initiatives, it may not be possible for the organization to achieve its