BALANCE SCORE CARD

• Balance score card is the management system that is basically used in the
business and industry, government and non governmental organisations.
With the help of balance score card it helps in internal as well as external
communication.
• Balance score card was originated by Drs. Robert Kaplan as a performance
measurement framework.
• A balance score card is a performance metric used in strategic
management, it is used to measure and provide feedback to organisations.
• Data collection is crucial to provide quantitative results, as the information
gathered by managers and executives and used to make better decisions for
the organizations.
Balance score card
 PURPOSE BEHIND THE BALANCE
SCORECARD
• The balance scorecard is used to reinforce the good behaviours in an
organization by four different areas called “legs” that need to be analyzed,
which involves learning and growth, business processes customers and
finance.
• Information is collected and analyzed from four aspects of the business
first learning and growth are analyzed through the investigation of training
and knowledge resources, the first leg handles how well information is
captured and how effectively employees utilise the information to convert
it into competitive advantage.
• Second business process checks how well products are manufactured.
Operational management is analyzed to check gaps
 Characteristics of balance scorecard

• The balanced scorecard and its derivatives is the presentation of a

mixture of financial and non-financial measures each compared to a
'target' value within a single concise report.
• The report is not meant to be a replacement for traditional financial
or operational reports but a succinct summary that captures the
information most relevant to those reading it.
• It is the method by which this 'most relevant' information is
determined (i.e., the design processes used to select the content) that
most differentiates the various versions of the tool in circulation.
The balanced scorecard indirectly also provides a useful insight into
an organisation's strategy – by requiring general strategic statements
(e.g. mission, vision) to be precipitated into more specific/tangible
forms.
• Some companies went further, however and discovered the scorecard’s
value as a milestone for strategic management system. In 1996 the
authors describe how the balanced scorecard can address a serious
deficiency in traditional management systems. the inability to link a
company’s long-term strategy with its short-term financial goals. The
scorecard lets managers introduce four new processes.
• Translating the vision
• Communicating and linking
• Business planning
• Feedback and learning
 DESIGN

• Design of a balanced scorecard is about the identification of a small

number of financial and non-financial measures and attaching targets to
them, so that when they are reviewed it is possible to determine whether
current performance 'meets expectations.
• The original thinking behind a balanced scorecard was for it to be focused
on information relating to the implementation of a strategy, and over
time there has been a blurring of the boundaries between conventional
strategic planning and control activities and those required to design a
balanced scorecard. four steps required to design the balance scorecard
• Translating the vision into operational goals
• Communicating the vision and link it to individual performance
• Business planning
• Feedback and learning, and adjusting the strategy accordingly.