The Term Balanced Scorecard Became Part Of The Professional

The Termbalanced Scorecardbecame Part Of The Professional Accounting V

The term balanced scorecard became part of the professional accounting vernacular in the early 1990s. This nontraditional approach to measuring strategic performance was developed by Dr. Robert Kaplan and Dr. David Norton. As the name implies, the goal of the balanced scorecard is to provide stakeholders with a balanced view of the performance of an organization.

In this Discussion, you will refer to an example from your professional career to consider the role of balanced scorecards in an organization. To prepare for this Discussion: · Consider an example from your professional career of when the implementation of a balanced scorecard might have been beneficial to articulate the organizational goals and objectives to the department, area, or team in which you worked. Post an analysis of the role of balanced scorecards in an organization, to include the following: (Each bullet point should be 150 words or more) · Describe an example from your professional career, current or past, in which the use of a balanced scorecard might have had a positive impact on your understanding of how the performance of your department, area, or team contributed to the achievement of the organization’s overall goals and objectives. · As a manager, analyze how you could utilize a balanced scorecard to ensure your department, area, or team was meeting the organization’s goals and objectives. What measurement(s) might you consider and why? (Provide at least one example of a measurement from at least one of the four perspectives of the balanced scorecard: financial, internal operations, customer, and learning and growth.)

Paper For Above instruction

The balanced scorecard (BSC) is a strategic management framework that translating an organization's vision and strategy into a comprehensive set of performance measures that provides a balanced view of organizational performance. Its primary purpose is to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

Reflecting on my professional career, I recall a period when my team was responsible for a customer service department within a mid-sized manufacturing firm. Prior to implementing a balanced scorecard, our performance was primarily measured by traditional financial metrics such as sales volume and profit margins. While these metrics are important, they failed to highlight areas like customer satisfaction, internal processes, or employee development, which are critical for sustainable success. Applying the balanced scorecard could have provided a holistic view, combining financial and non-financial measures to better depict our department's contribution to the company's strategic objectives. For example, integrating customer satisfaction scores (customer perspective) would have allowed us to understand how well we were meeting client needs, influencing customer loyalty and repeat business.

From my perspective as an aspiring manager, utilizing the balanced scorecard could significantly enhance strategic alignment and performance management in my team. To achieve this, I would focus on measuring key indicators across the four perspectives: financial, internal processes, customer, and learning and growth. For instance, a financial metric like return on investment (ROI) would gauge economic contributions. Internal process measures such as cycle time or error rates would identify operational efficiencies. Customer satisfaction scores or Net Promoter Scores (NPS) could assess client perceptions and loyalty. Learning and growth metrics like employee training hours or turnover rates would indicate workforce development and organizational capacity. These diverse metrics ensure a balanced approach, allowing teams to address areas that influence long-term success and continuously improve performance across all facets.

Implementing a balanced scorecard within an organization facilitates strategic clarity and accountability. It enables management to clearly communicate organizational goals, align departmental objectives, and monitor performance in real-time. For example, by setting specific targets in customer satisfaction, internal process improvements, or employee training, managers can identify gaps and take corrective actions promptly. Moreover, the balanced scorecard promotes a culture of continuous improvement by linking performance measurement to strategic priorities and fostering shared accountability. It also assists in resource allocation by highlighting areas needing support or investment, ensuring efforts contribute to overarching strategic goals. Ultimately, adopting this framework supports sustainable growth, innovation, and competitive advantage by integrating financial and non-financial perspectives into decision-making processes.

References

• Kaplan, R. S., & Norton, D. P. (1992). The Balanced Scorecard—Measures That Drive Performance. Harvard Business Review.
• Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard: Translating Strategy into Action. Harvard Business School Press.
• Niven, P. R. (2006). Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results. John Wiley & Sons.
• Olve, N., Roy, J., & Wetter, M. (1999). Performance Drivers: A practical guide to using the balanced scorecard. Wiley.
• Fraser, L. M., & Simkins, B. J. (2010). Strategic Management: Text and Cases. McGraw-Hill Education.
• Anthony, R. N., & Govindarajan, V. (2007). Management Control Systems. McGraw-Hill/Irwin.
• Kaplan, R. S., & Norton, D. P. (2001). The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Harvard Business School Publishing.
• Chenhall, R. H. (2003). Management Control Systems and Strategy: A Revelation or Reinforcement of Strategic Position? Accounting, Organizations and Society, 28(2-3), 127-143.
• Ekholm, B., & Wallin, J. (2000). Linking Balanced Scorecard Measures to Theory: Observations and some Preliminary Results. Paper presented at the European Accounting Association Annual Congress.
• Ittner, C. D., & Larcker, D. F. (1998). Innovations in Performance Measurement: Trends and Research Implications. Journal of Management Accounting Research, 10, 205-238.