balanced scorecard


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balanced scorecard

A document that translates an organisation’s mission and strategy into a comprehensive set of performance measures which provide the framework for a strategic measurement and management system. The balanced scorecard retains an emphasis on achieving financial objectives, but also includes the performance drivers of those financial objectives. The scorecard measures organisational performance across four balanced perspectives:
(1) Financial (i.e. cost efficiency)
(2) Customers
(3) Internal business processes
(4) Learning and growth (i.e. making changes and sustaining improvements).
References in periodicals archive ?
It turns out that the balanced scorecard system is agile enough to be beneficial in extremely simple implementations.
Once you can do that, the whole approach to strategy execution is pretty similar to using the Balanced Scorecard in private sector companies.
With the final process, "feedback and learning," management can monitor their progress by evaluating their performance in regard to the balanced scorecard perspectives.
McMahan calls the Balanced Scorecard a "living, breathing document that is constantly changing.
At Ricoh Corporation, we are faced with the challenge to grow our business while rising above the competition; therefore, Ricoh's leadership team implemented the Balanced Scorecard to measure the success of our strategies and operation plans to achieve these goals," said Sam Ichioka, chairman & CEO of Ricoh Corporation.
At their most effective, balanced scorecards can be powerful tools, providing concise, predictive and actionable information about how a company is performing and may perform in the future.
The cause-and-effect relationships in the balanced scorecard framework can help management to continuously evaluate and refine its strategy at various levels of this hierarchy.
Yet one of the key benefits of the Balanced Scorecard as defined by its inventors, Robert Kaplan and David Norton, is its ability to establish a communication system that bridges the gap between goals set by high-level executives and the frontline workers whose performance is ultimately responsible for reaching those goals.
How to tap the power of Balanced Scorecard for financial services organizations
The Balanced Scorecard is an aid to achieving strategy by showing how key measures inter-relate to track progress towards strategy.
These principles require that senior management provide a visible and credible commitment to the balanced scorecard and that the organization translate strategy into terms that enable all employees -- down to the front lines and back offices -- to think about how to do their jobs differently and better to achieve organizational objectives.
The balanced scorecard: measures that drive performance, Robert S Kaplan and David P Norton Harvard Business review, vol 70 no 1, Jan/Feb 1992, pp71-79 Linking the balanced scorecard to strategy, Robert S Kaplan and David P Norton California Management Review, vol 39 no 1, Fall 1996, pp53-79 Putting the balanced scorecard to work, Robert S Kaplan and David P Norton Harvard Business Review, vol 71 no 5, Sep/Oct 1993, pp134-147