Balance Score Card

The Balanced Scorecard is a tool, which systematically expands the measurement areas traditionally involved in accounting. It provides a system for measuring and managing all aspects of a company's performance. The scorecard balances financial measures of success with non financial measures of drivers of future performance. These non financial measures include measures on customer satisfaction, internal processes, the organisation's innovation and improvement activities. The Balanced Scorecard measures organizational performance across four different but inter-related perspectives: financial, customer, internal and learning and growth perspectives (Atkinson, Kaplan and Young, 2004).

The Balanced Scorecard, as devised by Kaplan and Norton (1992), is thus a balanced performance measurement system that enables companies to track financial results while simultaneously monitoring how they are building their capabilities with customers, internal processes, employees and systems for future growth and profitability. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results (Kaplan and Norton, 1996).

The Balanced Scorecard is a comprehensive framework that translates a company's vision and strategy into a coherent set of performance measures. It is an integral part of an organization's strategy execution process that emphasizes communicating strategy to employees and providing feedback to help attain objectives. The scorecard can be used at different levels of an organization. For each level, the Balanced Scorecard approach identifies the key components of operations, sets goals for them, and finds ways to measure progress toward achieving these goals. Taken together, the measures provide a holistic view of performance both inside and outside the organization, and allow each constituent of the organization to see how his or her activities contribute to attaining the organization's overall mission (Von Bergen and Benco).

Essentially, the Balanced Scorecard measures are used to translate vision and strategy into concrete directions for action by people ...