Introduction

The Balanced Scorecard refers to a strategic performance management tool typified by

automation tools, verified design methods and semi-standard structured report that can be

utilized by managers to monitor the implementation of organizational activities by organizational

members under their control and monitor any following consequences associated with the

execution of these actions. The Balanced Scorecard is the most prevalent and adopted of the

several strategic performance tools since the early 1990s. In addition, the derivatives of the

Balanced Scorecard such as Performance Prism and Results Based Management have also

gained prominence in the field of strategic performance management and improvement. The

Balanced Scorecard is one of the strategic planning and performance management systems used

extensively by the business world, non-profit organizations and governments with the goal of

aligning business operations with the strategy and vision of organizations, improving

communications at both internal and external levels, and monitoring the performance of

organizations against the established strategic goals. The Balanced Scorecard commenced as a

performance management tool that incorporated strategic non-financial performance measures to

the conventional financial indicators in order to provide managers and company executives with

a somewhat “balanced” view of the aspect of organizational performance.

Definition- Balance 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. While the phrase balanced scorecard was coined in the early 1990s, the roots of the

this type of approach are deep, and include the pioneering work of General Electric on

performance measurement reporting in the 1950’s and the work of French process engineers

(who created the Tableau de Bord – literally, a "dashboard" of performance measures) in the

early part of the 20th century.

The balanced scorecard has evolved from its early use as a simple performance measurement

framework to a full strategic planning and management system. The “new” balanced scorecard

transforms an organization’s strategic plan from an attractive but passive document into the

"marching orders" for the organization on a daily basis. It provides a framework that not only

provides performance measurements, but helps planners identify what should be done and

measured. It enables executives to truly execute their strategies.

In simple word, The Balanced Scorecard is a set of measures that are directly linked to the

company’s strategy. It directs a company to link its own long-term strategy with tangible goals

and actions.

The Four Perspectives in a Balanced Scorecard

The BSC retains financial metrics as the ultimate outcome measures for company success, but

supplements these with metrics from three additional perspectives – customer, internal process,

and learning and growth – that we proposed as the drivers for creating long-term shareholder

value.

Financial performance

Customer knowledge

Internal business processes

Learning and growth

SWOT Analysis

This is an example of a SWOT analysis in deciding whether to introduce a new service into their portfolio.

Strengths:

Reputation for innovation Good internal communications Excellent sales staff with strong knowledge of existing services Successful marketing strategies Good relationship with customers Excellent footfall

Weaknesses:

Currently struggling to meet deadlines - too much work? High rental costs Market research data may be out of date Cash flow problems Holding too much stock Poor record keeping

Opportunities:

Similar services on the market are not as reliable or are more expensive Loyal customers Service could be on the market for ideal time Customer demand - have asked sales staff for similar services

Threats:

Competitors have a similar service Competitors have launched a new advertising campaign Competitor opening service center nearby Downturn in economy may mean people are spending less