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Balanced Score Card - Strategic Management MBA

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Puneet Sachdeva
Puneet Sachdeva

Balanced Scorecard was developed by Robert S Kaplan & David Norton. It seeks to do away with undue emphasis on short term financial objectives & seeks to enhance organisational performance by focusing on measuring & managing a wide range of non financial, operational objectives

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Balanced Scorecard ApproachBalanced Scorecard Approach Balanced Scorecard was developed by Robert SBalanced Scorecard was developed by Robert S Kaplan & David Norton. It seeks to do away withKaplan & David Norton. It seeks to do away with undue emphasis on short term financialundue emphasis on short term financial objectives & seeks to enhance organisationalobjectives & seeks to enhance organisational performance by focusing on measuring &performance by focusing on measuring & managing a wide range of non financial,managing a wide range of non financial, operational objectives. Later the system wasoperational objectives. Later the system was enlarged & now the financial objectives are alsoenlarged & now the financial objectives are also a part of it.a part of it.
Financial Perspective Objectives Targets Objectives Targets Objectives Targets Objectives Targets Customer Perspective Internal Process Perspective Learning/Innovation Perspective Vision & Strategy Balanced Scorecard Model
Financial Perspective This perspectiveFinancial Perspective This perspective considers the financial measures arisingconsiders the financial measures arising from the strategic intent of thefrom the strategic intent of the organisation. Examples are revenues,organisation. Examples are revenues, earnings, return on capital & cash flow. Toearnings, return on capital & cash flow. To be more precise it is How do we look tobe more precise it is How do we look to shareholders?shareholders?
Internal Business Perspective InternalInternal Business Perspective Internal business processes are the mechanismbusiness processes are the mechanism through which performance expectationsthrough which performance expectations are achieved. To meet the organisationalare achieved. To meet the organisational objectives & customer expectations,objectives & customer expectations, organisations must identify the keyorganisations must identify the key business processes at which they mustbusiness processes at which they must excel.excel.
Customers Perspective This perspectiveCustomers Perspective This perspective measures the ability of the organisation tomeasures the ability of the organisation to provide quality goods & services, effectiveprovide quality goods & services, effective delivery & overall customer satisfaction.delivery & overall customer satisfaction. Examples are customer satisfactionExamples are customer satisfaction measures & customer loyalty programs.measures & customer loyalty programs.
Learning & Growth Perspective ThisLearning & Growth Perspective This perspective focuses on the ability of theperspective focuses on the ability of the organisation to manage its businesses &organisation to manage its businesses & adapt to change. In view of the challengesadapt to change. In view of the challenges of changes in the environment andof changes in the environment and customer expectations, organisation takescustomer expectations, organisation takes on new responsibilities that require itson new responsibilities that require its employees to develop new skills &employees to develop new skills & capabilities.capabilities.
Learning & Growth Perspective ThisLearning & Growth Perspective This perspective focuses on the ability of theperspective focuses on the ability of the organisation to manage its businesses &organisation to manage its businesses & adapt to change. In view of the challengesadapt to change. In view of the challenges of changes in the environment andof changes in the environment and customer expectations, organisation takescustomer expectations, organisation takes on new responsibilities that require itson new responsibilities that require its employees to develop new skills &employees to develop new skills & capabilities.capabilities.

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Balanced Score Card - Strategic Management MBA

  • 1. Balanced Scorecard ApproachBalanced Scorecard Approach Balanced Scorecard was developed by Robert SBalanced Scorecard was developed by Robert S Kaplan & David Norton. It seeks to do away withKaplan & David Norton. It seeks to do away with undue emphasis on short term financialundue emphasis on short term financial objectives & seeks to enhance organisationalobjectives & seeks to enhance organisational performance by focusing on measuring &performance by focusing on measuring & managing a wide range of non financial,managing a wide range of non financial, operational objectives. Later the system wasoperational objectives. Later the system was enlarged & now the financial objectives are alsoenlarged & now the financial objectives are also a part of it.a part of it.
  • 2. Financial Perspective Objectives Targets Objectives Targets Objectives Targets Objectives Targets Customer Perspective Internal Process Perspective Learning/Innovation Perspective Vision & Strategy Balanced Scorecard Model
  • 3. Financial Perspective This perspectiveFinancial Perspective This perspective considers the financial measures arisingconsiders the financial measures arising from the strategic intent of thefrom the strategic intent of the organisation. Examples are revenues,organisation. Examples are revenues, earnings, return on capital & cash flow. Toearnings, return on capital & cash flow. To be more precise it is How do we look tobe more precise it is How do we look to shareholders?shareholders?
  • 4. Internal Business Perspective InternalInternal Business Perspective Internal business processes are the mechanismbusiness processes are the mechanism through which performance expectationsthrough which performance expectations are achieved. To meet the organisationalare achieved. To meet the organisational objectives & customer expectations,objectives & customer expectations, organisations must identify the keyorganisations must identify the key business processes at which they mustbusiness processes at which they must excel.excel.
  • 5. Customers Perspective This perspectiveCustomers Perspective This perspective measures the ability of the organisation tomeasures the ability of the organisation to provide quality goods & services, effectiveprovide quality goods & services, effective delivery & overall customer satisfaction.delivery & overall customer satisfaction. Examples are customer satisfactionExamples are customer satisfaction measures & customer loyalty programs.measures & customer loyalty programs.
  • 6. Learning & Growth Perspective ThisLearning & Growth Perspective This perspective focuses on the ability of theperspective focuses on the ability of the organisation to manage its businesses &organisation to manage its businesses & adapt to change. In view of the challengesadapt to change. In view of the challenges of changes in the environment andof changes in the environment and customer expectations, organisation takescustomer expectations, organisation takes on new responsibilities that require itson new responsibilities that require its employees to develop new skills &employees to develop new skills & capabilities.capabilities.
  • 7. Learning & Growth Perspective ThisLearning & Growth Perspective This perspective focuses on the ability of theperspective focuses on the ability of the organisation to manage its businesses &organisation to manage its businesses & adapt to change. In view of the challengesadapt to change. In view of the challenges of changes in the environment andof changes in the environment and customer expectations, organisation takescustomer expectations, organisation takes on new responsibilities that require itson new responsibilities that require its employees to develop new skills &employees to develop new skills & capabilities.capabilities.