The Balanced Scorecard In Practice Essay Example | Topics and Well Written Essays - 1500 words

The Balanced Scorecard In Practice - Essay Example It becomes critically important for the managements of the business and service organizations to implement systems which enable them to have a first hand knowledge of the relative strengths and weaknesses of the organisation. For this purpose the management needs to develop frameworks that transform their visions and goals to tangible and measurable objectives. The purpose of these frameworks is to enable the members of the organizations to identify and understand the broad objectives of the organisation, the relationship among them, and the means of achieving them effectively. By adopting this practice the management is able to engage the available resources of the organisation in a most efficient way to maximize the earnings and revenue of the organisation. They are also able to arrive at realistic business plans. Over the years several research studies have been conducted in this field of the management science, and models like Balanced Scorecard has been developed which are basic ally designed for helping the organizations in their drive towards being more competitive in achieving their goals... â€Å"The Balanced Scorecard method of Kaplan and Norton is a strategic approach and performance management system that enables the organizations to translate a company’s vision and strategy into implementation working from four perspectives.† (12 Manage) The balanced scorecard approach can be represented in the following diagram. 1. Financial perspective encompasses the implementation of a corporate database for processing the information in a centralized and automated way. Under this perspective the management should strive to understand how the shareholders view the firm and decide on the financial goals which are desired from the perspective of the shareholders. For instance the revenue growth, profitability, and cost leadership are some of the objectives that may find favor with the organizations as financial perspective objectives. 2. Customer