...A critical analysis of Balanced Scorecard as a performance measurement tool: an overview of its usage and sustainability A iti al a alysis of Bala ed “ o e a d as a pe fo TABLE OF CONTENTS a e easu e e t tool: a o e ie of its usage a d sustai a ility TOPICS PAGE i ii iii iv-v LETTER OF TRANSMITTAL DECLARATOIN ACKNOWLEDGEMENT ABSTRACT CHAPTER ONE INTRODUCTION 1.1 Background of the study 1.2 Objective of the study 1.3 Scope of the study 1.4 Methodology 1.5 Limitations of the study BALANCED SCORECARD 2.1 Overview of the Balanced Scorecard (BSC) 2.2 Objective 2.3 Design 2.4 Original design method 2.5 Improved design method 2.6 Popularity 2.7 Variants and alternatives CRITICAL ANALYSIS ON THE CONCEPT & USING OF BALANCED SCORECARD WHETHER IT IS THE UNIVERSAL SOLUTION FOR THE BUSINESS MANAGEMENT? 3.1 Crucial investigation of the concept and using of Balanced Scorecard 3.2 A comprehensive new approach for the measurement and management 3.3 Is the Balanced Scorecard a universal key to the business management? 3.4 Balanced Scorecard: a question of conjecture and application CHAPTER FOUR: THE SUSTAINABILITY OF THE BALANCED SCORECARD 4.1 The Balanced Scorecard: an instrument for sustainability management 4.2 Different possible approaches of integrating environmental and social aspects 4.3 The process of formulating a sustainability Balances Scorecard 4-7 5 5 5 6 7 8-15 9-11 12 12-13 13 14 14 14-15 16-25 CHAPTER TWO CHAPTER THREE 17-21 21-22 22-23 23-25...
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...Balanced scorecard From Wikipedia, the free encyclopedia Jump to: navigation, search Part of a series on Strategy | Strategy | | Major dimensions[hide] * Strategy • Strategic management * Military strategy • Strategic thinking * Strategic planning • Game theory | Thought leaders[hide] * Michael Porter • Henry Mintzberg * Bruce Henderson • Gary Hamel * Jim Collins • Liddell Hart * Carl Von Clausewitz • Sun Tzu | Concepts[hide] * Competitive advantage • Experience curve * Value chain • Portfolio theory * Core competency • Generic strategies | Frameworks & Tools[hide] * SWOT • Five Forces * Balanced scorecard • Strategy map * PEST analysis • Growth–share matrix | * v * t * e | The balanced scorecard (BSC) is a strategy performance management tool - a semi-standard structured report, supported by design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.[1] The critical characteristics that define a Balanced Scorecard are[2] * its focus on the strategic agenda of the organisation concerned * the selection of a small number of data items to monitor * a mix of financial and non-financial data items. Contents [hide] * 1 Use * 2 History * 3 Characteristics * 4 Design * 4.1 First Generation Balanced Scorecard * 4.2 Second Generation Balanced...
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...“Critically evaluate the use of the Balanced Scorecard as a performance measurement system within organisations”. The Balanced Scorecard is a “strategic planning and management system” that is used at length by all kinds of organisations, stretching from private and public firms, governmental organisations along with non-profit organisations and many others. Traditionally Management Accounting was mainly focused on financial performance measures such as profit and loss figures and balance sheet figures. Now though, more emphasis is been given to the use of non-financial measures and incorporating these into the formal reporting systems used by organisations. The BSC allows the overall mission, policies and strategy of the organisation to be translated into an ample set of performance measurements. The BSC does not only focus on achieving financial objectives but instead allows a firm to pay attention to other non-financial goals that it must accomplish in order to meet its original, financial targets. The use of the BSC can be seen as a way of monitoring and improving both operational and financial performance of an organisation while a t the same time being used as a tool in order to aid the formulation and implementation of the organisation’s strategy. The idea of the Balanced Scorecard was first introduced by Kaplan and Norton in the 1992 Harvard Business Review article entitled “The Balanced Scorecard: Measures that Drive Performance”, which was based on a “multi-company...
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...Bringing the Balanced Scorecard to Life: The Microsoft Balanced Scorecard Framework White Paper By: Charles Bloomfield Insightformation, Inc. Published: May 2002 For the latest information, please see http://www.microsoft.com/business/bi/ Abstract This paper describes the Microsoft® approach to developing and implementing a Balanced Scorecard for enterprise performance management. It presents basic information on the Balanced Scorecard performance management methodology, and identifies key business issues that must be addressed in developing and deploying a balanced scorecard. The paper then presents the Microsoft Balanced Scorecard Framework (BSCF)—a comprehensive set of techniques, tools, and best practices to speed scorecard implementation using toolsets with which organizations are familiar. An extensive body of research and literature describing the Balanced Scorecard exists. That body of knowledge is constantly being expanded by The Balanced Scorecard Collaborative, Balanced Scorecard Institute, various consulting organizations, software companies, and client organizations. This paper cannot comprehensively cover such a complex topic or reflect accurately many of the nuances of scorecard development and implementation. Instead, it presents a basic conceptual overview of the Balanced Scorecard. Interested readers are encouraged to use the bibliography presented at the end of this paper as a guide to more detailed information. ...
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...Government Performance Using the Balanced Scorecard to Plan and Manage Strategically Howard Rohm President and CEO, the Balanced Scorecard Institute Are programs, services, and staff aligned around a shared vision of the future? Do government leaders have a clear strategy for delivering cost-effective services for citizens and other stakeholders, and is that strategy communicated with clarity, both internally and externally? Do you have a disciplined way of choosing priorities among competing programs and services, under tighter and more stringent budgets? How are you keeping score and communicating progress toward the vision? If you need to make hard choices among competing programs and services for tight budget dollars, if you are looking to increase program and service effectiveness and improve operational efficiency and performance, and if you need to become a more strategy focused organization then a balanced scorecard may be the best planning and management framework for your organization. This article describes how to build a strategy-based balanced scorecard system, and shares some lessons learned from developing strategy-based scorecard systems in dozens of government and nonprofit organizations in 22 countries and from training over 5000 people from 150 organizations. “Balanced scorecard” means different things to different people. Balanced scorecards have evolved over the past decade from dashboard systems that simply measure financial and non-financial performance, to...
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...Management Accounting Delivers Long Term Focus - Indian Context 12/12/2011 Contents INTRODUCTION 2 The Balanced Scorecard 2 Balanced Scorecard in Indian Scenario 4 The Balanced Scorecard at Tata Motors 4 Customer Relationship Management 7 CRM implementation in Indian Scenario 7 CONCLUSION 9 INTRODUCTION A criticism of traditional accounting methods like focusing on profit and sales volumes is that they have a tendency to be historically biased as well as backward looking. Quite frequently, they could result in managers looking at results on a quarterly basis instead of promoting interest in concentrating on a longer term view of the business. The structural differences and ideas associated with the new open regime, have caused the traditional performance measures like ROI, Residual Income, Enterprise Value etc, which concentrate only on financial performance (ignoring the nonfinancial aspect), to be less effective. Since these traditional measures of performance have created problems, new innovative solutions have been developed such as the Balanced Scorecard and CRM tools. These incorporate a number of non- financial measures of performance such as customer satisfaction and allow a broader look at the strengths of the company by focusing on longer term performance. The Balanced Scorecard The Balanced Scorecard is a strategic management system that has been used widely by a number of organisations...
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...he balanced scorecard is a strategic performance measurement system developed by Robert S. Kaplan and David P. Norton to help organizations achieve breakthrough results by embedding strategy at the heart of the organization. Developed 12 years ago, the concept was significantly different from any existing performance measurement system and generated considerable excitement. A variety of applications and variations of the balanced scorecard have emerged since its inception. It was received and used so enthusiastically and effectively that the Harvard Business Review labeled it in 1997 as one of the 75 most influential ideas of the 20th Century. 1 Early on, a navigation metaphor was used to illustrate the need for additional performance measures. Over time, the navigation metaphor expanded to include the process of strategic mapping and decisions about where to lead your company. This article outlines the evolution of the balanced scorecard. BALANCEDSCORECARD: THEINCEPTION In 1990, the Nolan Norton Institute, the research arm of KPMG, sponsored a one-year, multi-company study on the future of performance measurement. David Norton, CEO of Nolan Norton, was the study leader, and Robert Kaplan served as an academic consultant. The 12 companies that formed the original study group believed that the exclusive reliance on financial performance metrics alone was causing their companies to do the wrong things. Many of the activities that create organizational value...
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...Balanced scorecard From Wikipedia, the free encyclopedia Jump to: navigation, search The balanced scorecard (BSC) is a strategy performance management tool - a semi-standard structured report, supported by design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.[1] It is perhaps the best known of several such frameworks (it was the most widely adopted performance management framework reported in the 2010 annual survey of management tools undertaken by Bain & Company.[2]) Since its original incarnation in the early 1990s as a performance measurement tool, the BSC has evolved to become an effective strategy execution framework.[citation needed] The BSC concept as put forth by Drs. Robert S. Kaplan and David P. Norton is now seen as a critical foundation in a holistic strategy execution process that, besides helping organizations articulate strategy in actionable terms, provides a road map for strategy execution, for mobilizing and aligning executives and employees, and making strategy a continual process.[citation needed] Contents [hide] • 1 Characteristics • 2 History • 3 Design o 3.1 Original design method o 3.2 Improved design methods o 3.3 Popularity o 3.4 Variants, alternatives and criticisms • 4 Criticism o 4.1 Balanced Scorecard used for incentive based pay • 5 The...
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...Measuring Business Excellence Performance measurement tools: the Balanced Scorecard and the EFQM Excellence Model S. WongrassameeJ.E.L. SimmonsP.D. Gardiner Article information: To cite this document: S. WongrassameeJ.E.L. SimmonsP.D. Gardiner, (2003),"Performance measurement tools: the Balanced Scorecard and the EFQM Excellence Model", Measuring Business Excellence, Vol. 7 Iss 1 pp. 14 - 29 Permanent link to this document: http://dx.doi.org/10.1108/13683040310466690 Downloaded on: 14 April 2015, At: 10:28 (PT) References: this document contains references to 27 other documents. To copy this document: permissions@emeraldinsight.com The fulltext of this document has been downloaded 13506 times since 2006* Users who downloaded this article also downloaded: Joaquín Gómez Gómez, Micaela Martínez Costa, Ángel R. Martínez Lorente, (2011),"A critical evaluation of the EFQM model", International Journal of Quality & Reliability Management, Vol. 28 Iss 5 pp. 484-502 http://dx.doi.org/10.1108/02656711111132544 Downloaded by MIDDLESEX UNIVERSITY At 10:28 14 April 2015 (PT) Michael Trevor Hides, John Davies, Sue Jackson, (2004),"Implementation of EFQM excellence model self-assessment in the UK higher education sector – lessons learned from other sectors", The TQM Magazine, Vol. 16 Iss 3 pp. 194-201 http:// dx.doi.org/10.1108/09544780410532936 Andy Neely, Mike Gregory, Ken Platts, (1995),"Performance measurement system design: A literature review and research agenda", International...
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...www.hbrreprints.org BEST OF HBR Using the Balanced Scorecard as a Strategic Management System by Robert S. Kaplan and David P Norton . • Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 2 Using the Balanced Scorecard as a Strategic Management System 14 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications Reprint R0707M BEST OF HBR Using the Balanced Scorecard as a Strategic Management System The Idea in Brief The Idea in Practice Why do budgets often bear little direct relation to a company’s long-term strategic objectives? Because they don’t take enough into consideration. A balanced scorecard augments traditional financial measures with benchmarks for performance in three key nonfinancial areas: The balanced scorecard relies on four processes to bind short-term activities to long-term objectives: • a company’s relationship with its customers • its key internal processes • its learning and growth. COPYRIGHT © 2005 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. When performance measures for these areas are added to the financial metrics, the result is not only a broader perspective on the company’s health and activities, it’s also a powerful organizing framework. A sophisticated instrument panel for coordinating ...
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...Other Financial Management Techniques The President of EEC has decided to adopt the balanced scorecard. The balanced scorecard translates an organization’s mission and strategy into operational objectives and performance measures for four different perspectives. The President would like for the managerial accounting team to continue research and explain how to use a balanced scorecard to measure unethical behavior with EEC. First as the team is going to obtain research in how to transition to a balanced scorecard let us review the first part of the research, as well. Definition of a Balanced Scorecard The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance (Balance Scorecard Institute). Any measurement system should be developed by the mission, goals, and objectives of the organization, in this case we are analyzing EEC (MUSE, 2010). After defining a balanced scorecard it has an integrated...
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...Bringing the Balanced Scorecard to Life: The Microsoft Balanced Scorecard Framework White Paper By: Charles Bloomfield Insightformation, Inc. Published: May 2002 For the latest information, please see http://www.microsoft.com/business/bi/ Abstract This paper describes the Microsoft® approach to developing and implementing a Balanced Scorecard for enterprise performance management. It presents basic information on the Balanced Scorecard performance management methodology, and identifies key business issues that must be addressed in developing and deploying a balanced scorecard. The paper then presents the Microsoft Balanced Scorecard Framework (BSCF)—a comprehensive set of techniques, tools, and best practices to speed scorecard implementation using toolsets with which organizations are familiar. An extensive body of research and literature describing the Balanced Scorecard exists. That body of knowledge is constantly being expanded by The Balanced Scorecard Collaborative, Balanced Scorecard Institute, various consulting organizations, software companies, and client organizations. This paper cannot comprehensively cover such a complex topic or reflect accurately many of the nuances of scorecard development and implementation. Instead, it presents a basic conceptual overview of the Balanced Scorecard. Interested readers are encouraged to use the bibliography presented at the end of this paper as a guide to more detailed information. ...
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...Balanced Scorecard Introduction How can a balanced scorecard be utilized for optimum organizational performance in my organization – Cleveland Clinic? Within today’s complex environments many organization have pinpointed that an accurate understanding of their particular goals and the methods that they implement in order to achieve these goals is vital, this is also true with healthcare organizations. Organizations have come to the conclusion that no simple one measure can provide a clear performance target or focus attention on the critical areas of the business. Managers, today, want a balanced presentation of both financial and operational measures. Therefore, while they still require the financial measures, associated with the traditional approach, in order to assess the overall health of the organization, they also require measures that will allow them to concentrate more directly on their strategic performance and long term vision. The concept of the balanced scorecard was developed in order to provide managers with such a tool. The balanced scorecard can be described as a comprehensive framework that translates an organization mission and strategy into a comprehensive set of performance measures that provides the structure for creating a strategic measurement and management system. As a result the objectives and measures of the balanced scorecard are more than a collection of financial and non financial performance measures; they are derived from a...
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...DIVISION TOPIC: EVALUATION OF A NEW EXPANSION PLAN AND DIVISIONAL PERFORMANCE EVALUATION DATE: 12TH NOVEMBER 2012 INTRODUCTION: The purpose of this report is to critically address the expansion plan of Santa division management focused on the anticipated plant replacement. This action is aimed at improvement of the Santa division manufacturing capacity which is required for meeting demands of a new customer offering an attractive five years contract. In spite of the considered plan of expansion is perceived as a low-risk venture, the report will review the impact of accepting the contract using the given information and basing on financial (Return on capital employed (ROCE), Residual Income (RI)) and non financial performance measurement techniques, specifically the balanced scorecard approach. The following data is available for Santa division: Net profit before tax (PBIT) £ 3 mln per annum Net capital employed £ 10 million Required rate of return 20 % before tax The Following data is available on the anticipated contract: Contract duration 5 years Sales provided £ 2 mln per annum Operating costs on the contract £ 1,35 mln per annum, excluding depreciation The following data is available on the plant required: Plant replacement = annual depreciation per year Required capital outlay £ 2 mln (£ 1,5 mln of new fixed assets + £ 0,5 mln) Plant life 5 years FINANCIAL PERFORMANCE MEASURES (ROCE, RI): ROCE (also referred to as return on investment...
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...The Balanced Scorecard (BSC) Framework, Implementation Methodology and Recommended Application - Executive Brief (April 2012) - Introduction Balanced Scorecard is an integrated, organization-wide management system that drives, in an aligned manner, the transformation, improvement and modernization efforts of all hierarchical levels towards the accomplishment of organization’s Strategy. For this reason, Balanced Scorecard is also known as a Strategy Execution system. More precisely, Balanced Scorecard represents a framework for aligned Strategic Planning and for the consistent management of the organizational and individual performance in the execution of the Strategic Plan. Furthermore, Balanced Scorecard is a communication tool that helps each employee better understand where the Strategy drives the organization, what the plan is for reaching that destination and what their departmental and individual measured contribution is to that convergent effort. With such understanding, the employees – whether directly involved in the planned Strategy Execution, or not – can also change and improve the way they perform their daily jobs through micro-decisions that are both convergent and complementary to the execution of organization’s Strategic Plan. BSC History Balanced Scorecard has been launched twenty years ago as a first set of principles for balanced strategic Objectives and Measures/KPIs setting and measurement. The “parents” of Balanced Scorecard are Dr. Robert S. Kaplan...
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