Is Balanced Scorecard easy to do?
August 21, 2011 3 Comments
Balanced Scorecard (BSC) is a management tool to measure the organizational implementation of the vision and strategy against the business and operating Key Performance Indicators (Carpenter & Sanders, 2009). BSC transform the strategy into tangible and intangible performance measures that make the strategy a dynamic process (Carpenter & Sanders, 2009). BSC is an innovative method to dissect and direct the strategy into four principles. The principles or categories that each strategy should have are finance, external relations, internal business process, and learning and growth. The vision and strategy can be mapped through the BSC information to give a clear representation of the strategy to the stakeholders and shareholders.
Some organizations think that BSC is a complete waste of resources and takes time to set up the required measures (Linna & Seal, 2009). The measure maybe is outdated and need change within a few months. Success in the internal processes or human resources is sometimes not rewarded (Linna & Seal, 2009); however, the rewards are usually linked to the financial measures only. BSC may be a good performance dashboard if the tangible measures are updated frequently, however BSC will not be dynamic enough when most of the measures are intangible and cannot be updated frequently.
Carpenter, M. A., & Sanders, W. G. (2009). Strategic management. Upper Saddle River, NJ: Pearson Prentice Hall.
Linna, Y., & Seal, W. (2009). The balanced scorecard. Financial Management (14719185), 27-28.