Table of Contents
2.0 Overview of the Balanced Scorecard (BSC)
3.0 Using of Balanced Scorecard.
3.0 Balanced Scorecard: A Perfect approach for the management of performance.
The Balanced Scorecard (BCS) refers to a semi-standard structured report which is applied as a method to measure business performance. This is the tool that is supported by design and automation methods. Managers in business organizations can apply this tool for keeping records and tracking employee activities, monitoring performance and controlling staff performance. Many companies believe this is the best performance management tool. This paper first gives an overview of the Balanced Scorecard (BCS). Then, this paper outlines how the Balanced Scorecard can be used in business organizations by managers. Finally, this paper discusses how the Balanced Scorecard contributes to business performance in organizations.
2.0 Overview of the Balanced Scorecard (BSC)
The tool “Balanced Scorecard” is defined by some experts in different ways. Kaplan (2011) defined the balanced scorecard as the retain conventional financial measures. According to Smith (2013), a Balanced Scorecard refers to a strategic method that supports the managers in measuring employee performance and achieving balance to support the expected progress towards the predetermined goals and objectives. However, some experts claim that this tool is inadequate for long-term capabilities and customer relationships. In addition, this measure is not effective to provide guidance and evaluate the information for creating future value through investment in creativity and innovation, employees and process, technologies, suppliers and customers (Kaplan, 2011). Balanced Scorecard mainly choose and identify four perspectives as effective measures which are customer, learning and growth, financial issues, and internal business process. The overview of the balanced scorecard is in the diagram below:
3.0 Using of Balanced Scorecard
Using the Balanced Scorecard (BSC) in the business is still now new concept, which is mainly used to measure employee and business performance. This tool has been recognized as the comprehensive strategic management tool (Kaplan, 2013; Kaplan and Norton, 2016). According to Kaplan and Norton (2016), the Balanced Scorecard (BSC) translates the strategy into action. Kaplan and Norton also disclose a creative and innovative management perspective that can be applied as a strategy to improve business growth in operational terms. This concept focuses on the comprehensive and actionable theory. Kaplan (2016) said Balanced Scorecard (BSC) translates business mission and strategies into performance measures. It also gives structure for strategic management and measurement. This view can be considered as current in terms of performance measurement but it cannot qualify the radical approaches that the Balanced Scorecard (BSC) can provide. Booth (2016) suggests that the Balanced Scorecard (BSC) can play an important for the business’s future success. This is because this supports the business in gaining business goals and mission and vision which can be gained by close scrutiny and overall business activities. Kurtzman (2013) said the concept of a Balanced Scorecard (BSC) is an innovative way that affects the relationship and gives complex, complicated and scrutinized solutions. Lingle (2016) suggests that government bodies need to form a sense of measuring in using Balanced Scorecard (BSC) to improve the business performance.
Lopes (2016) said organizations can gain total organizational success using the Balanced Scorecard (BSC) by internal management. Jensen (2013) suggests understanding the Balanced Scorecard (BSC) properly and perfectly to do proper management and get business success. Anthony (2015) describes the Balanced Scorecard (BSC) as the performance measurement matric which is used in strategic management systems in modern business organizations. The key benefits of this tool are increasing business performance and communication, aligning business activities through organizational strategies. The Balanced Scorecard (BSC) should be viewed metrics developed, data collected, analyzing the four perspectives of financial, growth, customer, learning and process. In business organizations, the Balanced Scorecard (BSC) is used as a performance management tool (Kurtzman, 2013), but in research work, it is used as a methodology (Kaplan, 2011)……………………