Balanced Scorecard and Its Apparent Effects

Balanced Scorecard and Its Apparent Effects



Introduction

Balanced Score Cards, commonly known as BSC, are used all over the world. It is an immensely popular tool mainly because of how effective and how customer centered it is. Companies use the tool to conduct market analyses. It is used primarily to judge the company's performance with respect to company customer relations and overall customer satisfaction. The process of assessing this information is then used to improve relations and customer satisfaction. Both these factors are crucial to the market performance of every organization, irrespective of their final products. By studying markets and leading organizations, the benefits of the effective use of balanced score cards become evident. If the tool is implemented with proper understanding and comprehension of principles that can enhance the positive effects, balance score cards can provide a boost to business development.

Analysis

The use of balanced score cards in the business world can only be fully comprehended if balanced score card applications are understood. According to Kaplan (2005), “Scorecards feature all manner of wonderful objectives relating to the customer value proposition and customer outcome metrics—for example, market share, account share, acquisition, satisfaction, and retention”. Furthermore, this statement makes it clear that balanced score cards are primarily focused towards customers. Upon closer inspection, balanced score cards aim to assess the customer's propositions, outcomes and their wants and needs. The length that the company goes to meet these specific concerns is also of importance. Modern organizations go through three stages when implementing the balanced score card tool. These three stages are essential to the successful implementation and are required to reap maximum benefit. The first stage is defining who really the organization's customers are. Then, the organization must determine the exact definition of their wants, their needs and consequently their demands. Finally, the company or organization must decide on the propositions they are willing to make in order to keep their respective customers satisfied. All three of these stages are important and none of them can be considered to be less important as compared to each other. All three hold equal importance and significance.

The first stage is often defined as “Who are our customers?” (Niven, nd). Through this simple question, companies and organization effectively identify who their target markets and targeted customers are, using balanced score cards. Most often, simply identifying your targeted customer can solve ...