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Balance Scorecard This essay will discuss Balance Scorecard BSC can help organisations achieve better results when compared to traditional performance measurement system. It will cover three aspects- One aspect is the weakness of traditional tool; another aspect is that give evidence to show that BSC are more suitable to measure performance.
Finally, BSC also has some limitation and need to improvement. Since s, some researchers have tried to find some other tools which are not relevant of traditional control for company implementing operational strategies.
The reason is that traditional system was not sufficient and failure to link performance measurement in the new economic. Meantime, the traditional financial control alone was only focusing on accounting for external reporting, but was missing the factors which are useful for internal decision making such as competence and knowledge, competitors and operational efficiency.
To illustrate, by considering financial alone is not sufficient in the service industry, because mangers must more emphasis on training staff rather than financial performance, then can ensure their employees have good relationship with customers. Atkinson states that the BSC is significant tool to develop management accounting to compared with the traditional measures.
The mean benefit is that BSC simply sets out the four perspectives graph 1 for developing a coherent set of objectives for business and helps to translate strategy into operational terms. Kaplan and Norton The four perspectives also have balanced between long term and short term and also balanced the performance measurement which is financial plus consumer and employee satisfaction dimensions, as well as communicate with internal and external stakeholders which can contribute to business strategy.
Gumbus and Lyons To contrast, traditional system considers finance alone is poor at implementing operational strategies and poor to measure whether are achieving their mission and strategy.
Graph 1; Source; lecture notes-balance scorecard http: The research states in which 15 percent to 20 percent of the customers can generate percent or more of the profits.
In this case, 40 percent of customers with most profitability can generate percent of annual profits. The company worked harder to ensure their continued loyalty with its most profitable customers. Kaplan Balanced Scorecard Approach Furthermore, Gumbus views that the merits of BSC is focusing employees on their role which aligns their organization to the strategy and also in accomplishing the company mission.
And the operational efficiency dimension can help better to measure which needs to be fixed in order to meet their internal and external customer demands.
Balance Score Card Steps Step One: Assessment Step One of the scorecard building process starts with an assessment of the organization’s Mission and Vision, challenges (pains), enablers, and values. Disclaimer: This essay has been submitted by a student. This is not an example of the work written by our professional essay writers. You can view samples of our professional work here. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do. Example Balanced Scorecard for Performance Measurement The template here helps you to understand the important terminologies used in a balanced scorecard, with stress on performance & productivity. It will further help to create a scorecard with clear knowledge.
All of the perspectives are equally important and the results are close related to one another. Finally, it can support sufficient information to achieve long time financial successful and increase shareholder value.The balance sheet, also called the statement of financial position, is the third general purpose financial statement prepared during the accounting cycle.
It reports a company’s assets, liabilities, and equity at a single moment in time. Question 3: Dana’s direction is sing the usage of a balanced scorecard for the house.
For each of the four countries within the balanced scorecard. list two or three illustrations of mensurable critical success factors that should be included. The figure below is the original framework of balance scorecard that was being introduced by Nolan and Kaplan in the year BENEFITS OF BALANCED SCORECARD There are several benefits of balanced scorecard that company will be able to enjoy if the system is successfully implemented.
Balance Score Card implementation at Veolia Water Sukvinder Singh Section B PGP Veolia Water North America is a geographically diverse business, spread across the United States and Canada. The balanced scorecard is a financial and operational tool devised by Robert Kaplan and David Norton in the ’s.
Kaplan and Norton recommend four parameters that track both financial and operational metrics and allow executives to see if improvements in one . Balanced scorecard is strategic planning and management system used for business and industry, government, non profit organizations worldwide.
it is used for business activities like vision and strategy of organization to improve internal and external communication to monitor .