What Is Balance ScoreCard

What is Balanced Score Cards?

Balanced Score Card (BSC) is a performance management and strategy development methodology that helps executives achieve the organization’s mission and overall business strategy. Traditionally, companies have judged their health by how much money they make. Financial measures are important, but they only give you part of the picture. They focus on the short-term, and in the long-term, something beyond the financial measures is relevant. The name “balanced scorecard” comes from the idea of looking at strategic measures in addition to traditional financial measures to get a more “balanced” view of performance.

The four perspectives of BSC are as under:-

-       FINANCIAL - This perspective is concerned with the profit of the enterprises. Under this perspective, the focus will be on financial measures like operating profit, ROI, residual income, economic value-added concept, revenue growth, cost reduction, asset utilization, etc. These financial measures will provide feedback on whether improved operational performance is being translated into improved financial performance.

-       CUSTOMER - This perspective captures the ability of the organization to provide quality goods and services, the effectiveness of their delivery, and overall customer service and satisfaction. The needs and desires of customers have to be attended properly because the customer pays for the organization’s costs and provides for its profits.

-       INTERNAL BUSINESS PROCESSES - This perspective focuses on the internal business results that lead to financial success and satisfied customers. Key processes are monitored to ensure that outcomes will be satisfactory. The principal internal business processes include the following:

a)     Innovation processes for exploring the needs of the customers.

b)     Operation processes to provide efficient, consistent, and timely delivery of product/ service.

c)     Post-service sales processes.

-       LEARNING AND GROWTH - This perspective looks at the ability of employees, the quality of information systems, and the effects of organizational alignment in supporting the accomplishment of organizational goals.

Balanced Score Card is an important topic of Strategic Performance Management & Business Valuation (SPM & BV). SPM & BV is a Subject of CMA Final. 

For details regarding CMA Course, Visit At - www.coceducation.com 

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