Conceptual foundations of the balanced scorecard robert s. This article also contains a downloadable and editable balanced scorecard template what is a balanced scorecard. These are the sources and citations used to research balanced scorecard. Putting balance and validity into the balanced scorecard. But financial measures tell the story of past events, an. A practitioners guide to the balanced scorecard pdf 268kb. The purpose of this paper is to further research on the kaplan and norton 1996 balanced scorecard bsc model after having discerned that previous work has so far neglected to explore. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Putting the balanced scorecard to work harvard business. After reading you will understand the basics of this powerful strategy and performance management tool. Focusing your organization on strategywith the brilliant. How a company is performing from its should articulate goals for time, quality, and perforcustomers perspective has become, therefore, a pri mance and service and then translate these goals ority for top management.
This download includes a balanced scorecard template contained in an ms excel spreadsheet developed on the basis of the robert s. The idea in brief the core idea the idea in practice putting the idea to work article summary putting the balanced scorecard to work a list of related materials, with annotations to guide further. Strategic performance measurement using balanced scorecard. Putting the balanced scorecard to work free download as powerpoint presentation. A new challenge article pdf available in journal of management development 285. Using the balanced scorecard as a strategic management system by robert s. The idea in brief the core idea the idea in practice putting the idea to work 1 article summary 2 putting the balanced scorecard to work a list of related materials, with annotations to guide further. Selectdefine the strategybusiness unit to which to apply the scorecard. Conceptual foundations of the balanced scorecard 3.
In an earlier, groundbreaking article, balanced scorecard measures that drive. What do companies like rockwater, apple computer, and advanced micro devices have in commonl theyre using the scorecard to measure performance and set strategy. This broad view helps managers see what trade offs they are making among their key success factors. Using the balanced scorecard as a strategic management. The four perspectives of the balanced scorecard balanced. The balanced scorecard revolutionized conventional thinking about performance metrics. But they rarely think of measurement as an essential part of their strategy. Much more than a measurement exercise, the balanced scorecard is a management system that can motivate breakthrough improvements in such critical areas as. Perspectives are the performance dimensions, or lenses, that put strategy in context. Introduction to the balanced scorecard and performance. 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. The development of the balanced scorecard as a strategic. The balanced scorecard continuous improvement of safety, equip can serve as the focal point for the organiza ment reliability, responsiveness, and cost ef tion s efforts, defining and communicating pri fectiveness.
Kaplan and norton found that companies are using the bsc to. The common point between the two lists is kaplan and nortons 1996 balanced scorecard. Think in terms of the appropriateness of the four main perspectives defined above. Balanced scorecard topic gateway series essentially, the bsc is a management system that enables an organisation to identify and clarify its vision and strategy, and translate them into action.
The balanced scorecard facilitator either an outside consultant or the company executive who organizes the effort conducts interviews of approximately 90. Norton is a calltoaction book consisting of several quantitative performance measures. Now the authors show how several companies are putting the balanced scorecard to work. Both commercial and notforprofit organizations have successfully used the bsc framework. The idea in brief the core idea the idea in practice putting the idea to work 1 article summary 2 using the balanced scorecard as a strategic management system. Whether youve loved the book or not, if you give your honest and detailed thoughts then people will find new books that are right for them. It has the ability to show the connections between all four perspectives in a onepage picture. Putting the balanced scorecard to work article harvard business.
Pdf the balanced scorecard in the public sector organization. Putting the balanced scorecard to work by robert s. A balanced scorecard strategy map is a onepage visual depiction of an organizations scorecard. Pdf putting the balanced scorecard to work kam chap. This bibliography was generated on cite this for me on wednesday, october 25, 2017. Preparation for the exercise includes reading about the bsc or visiting various web sites such as the balanced scorecard collaborative at. Creating a balanced scorecard requires translating a companys strategy and mission statement into specific goals and measures. Managers then track those measures as they work toward their goals. Norton todays managers recognize the impact that measures have on performance.
Implementing the balanced scorecard in putting the balanced scorecard to work kaplan and norton identify eight steps towards building a scorecard. Several years ago, the balanced scorecard was introduced by kaplan and norton. A practitioners guide to the balanced scorecard cima. Its this focus on both highlevel strategy and lowlevel measures that sets the balanced scorecard apart from other performance management methodologies. Norton 1993 putting the balanced scorecard to work.
Putting the balanced scorecard to work article harvard. Balanced scorecard other bibliographies cite this for me. David norton and i introduced the balanced scorecard in a 1992 harvard. Explore and explain how the balanced scorecard is implemented into a strategy map. What do companies like putting the balanced scorecard to work.
Balanced scorecard basics balanced scorecard institute. When robert kaplan and david norton first introduced the concept. These companies lose sight of the essence of the scorecard. The overall pattern is familiar to anyone who has worked. Kaplan and nortons original work makes no specific observations concerning how the balanced scorecard might improve the performance of organisations.
Kaplan and norton describe the innovation of the balanced scorecard as follows. Nov 02, 2011 faculty cochair bob kaplan discusses the concept of the balanced scorecard and the driving corporate performance program. Todays managers recognize the impact that measures have on performance. The concept of balanced scorecard has evolved beyond the simple use of perspectives and it is now a holistic system for managing strategy. Conceptual foundations of the balanced scorecard working paper.
Effective measurement, the authors point out, must be an integral part of the management process. The measures on a balanced scorecard are being used by. Focusing your organization on strategywith the brilliantbut. The development of bsc as a strategic management tool page 2 of 9. The balanced scorecard combines an effective measurement system that helps solidify a companys strategic objectives with a management system that can help drive change in key areas such as product, process, customer, and market development. Kaplan and nortons balanced scorecard is a concept still widely used and. The purpose of out study is about how to develop a model from balanced scorecard. Balanced scorecard basics communicat business systems. What do companies like putting the balanced scorecard to. Norton created the balanced scorecard, a means of linking a companys current actions to its longterm goals. Norton your balanced scorecard provides a topdown description of your companys strategy and your assumptions about the corporate objectives and measures needed to implement that strategy. The development of the balanced scorecard as a strategic management tool. If you want some examples in your industry, download one of our free ebooks.
Measures and targets are set and the organization then puts in place action plans to meet the set targets. My experiences as a balanced scorecard practitioner with a large canadian company taught me that tremendous results are possible with the tool, but to attain. Kaplan is a professor born in 1940, new york united states he is renowned for his development of leadership at harvard business school as a professor, and as an executive of the balanced scorecard group. The financial perspective included three measures of importance to the shareholder. How to develop a balanced scorecard into a strategy map. Norton todays managers recognize the impact that a measurement exercise, the. The balanced scorecard bsc translates an organizations mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system. 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 balanced scorecard focuses on factors that create longterm value traditional financial reports look backward reflect only the past. Balanced scorecard approach an overview sciencedirect. The basic notion of the bsc is that organisational performance ought to be evaluated from more than simply a financial perspective. The balanced scorecard retains traditional financial measures.
Norton in the early 90s of the twentieth century kaplan, norton 1992, p. Implementing balance scorecard for performance measurement. The balanced scorecard facilitator either an outside consultant or the company executive who organizes the effort conducts interviews of approximately 90 minutes each with the senior managers to. Linking the balanced scorecard to strategy robert s. The balanced scorecard was introduced into business practice by the r. Balanced scorecard is a strategy performance management tool a semistandard structured report, 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 the phrase balanced scorecard primarily refers to a performance management report used by a management team. The measures of the balanced scorecard helps to focus a companys strategic vision, encourages thinking about current and future success, and helps provide a balance between external and internal measures. Theyre using the scorecard to measure performance and set strategy. Visualise the presentation full screen, download a. Organizations have adapted the bsc to their particular external and internal circumstances. Norton is founder and president of renaissance strategy group, a consulting firm located in lincoln, massachusetts. Other readers will always be interested in your opinion of the books youve read. The most valuable assets of a company are their people, customer.
One of the signature features of the balanced scorecard is that it looks at organizational performance from various perspectives. Mba presentation explaining kaplan and nortons balanced scorecard approach. Kaplan is the arthur lowes dickinson professor of accounting at the harvard business school. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising.
Putting the balanced scorecard to work strategic management. The bsc technique was developed by kaplan and norton 1992, 1996 to. Using the balanced scorecard as a strategic management system. The balanced scorecard measures that drive performance. Balanced scorecard is a strategy performance management tool a semistandard structured report, 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. Results and determinants matrix, the balanced scorecard, the consistent performance measurement system, and the integrated performance measurement system. Pdf putting the balanced scorecard to work kam chap chap. For example, executives may introduce new strategies and innovative operating processes intended to. Jun 01, 2003 implementing the balanced scorecard in putting the balanced scorecard to work kaplan and norton identify eight steps towards building a scorecard.
What follows, provides guidance and advice on the development and implementation of a balanced scorecard for those organisations considering the introduction of a. It takes several perspectivesusually fourto understand an organization as a system made up of elements that work together, like the gears in a clock or. Thus, as a contribution to our work, we build a strategy map for ericsson. The balanced scorecard as a performance management tool for. Faculty cochair bob kaplan discusses the concept of the balanced scorecard and the driving corporate performance program.