Translating strategy into action, harvard business school press. Conceptual foundations of the balanced scorecard 3. The balanced scorecard was originally developed by dr. Kaplan is a professor at harvard university and david p.
Developed by robert kaplan and david norton, the balanced scorecard method translates an organisations strategy into performance objectives, measures, targets and initiatives. A new challenge article pdf available in journal of management development 285. The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. 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. Linking the balanced scorecard to strategy robert s. Their combined citations are counted only for the first article. A practitioners guide to the balanced scorecard pdf 268kb. Many managers believe they are using a balanced scorecard when they supplement traditional financial measures with generic, nonfinancial measures about customers, processes, and employees. Its objective is to translate an organizations mission and vision into actual operational actions strategic planning. Balanced scorecard as a strategic management system.
However, the balanced scorecard literature provides little discussion of the scorecards role in compensation decisions, despite the fact that the majority of adopters use the scorecard for this purpose towers perrin, 1996. I have excerpted below their five futures expansions. A best practice perspective on managing poor performers. They realize that no single measure can protives understand that their organizations measure vide a. Summary by chris hourigan master of accountancy program university of south florida, fall 2002. The four perspectives of the scorecardfinancial measures, customer knowledge, internal business processes, and learning and growthoffer a balance between shortterm and longterm objectives, between outcomes desired and performance drivers of those. Kaplan y norton comienzan su labor investigadora en 1. The balanced scorecard focuses on factors that create longterm value traditional financial reports look backward reflect only the past. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. It is based on four balanced perspectives, and links them together with the concept of cause and effect.
Nortons concept of the balanced scorecard revolutionized conventional thinking about performance metrics. Air force security assistance center foreign military sales center institutionalizes how it develops and executes international agreements by. Balanced scorecard main page performance measures main page strategy main page. David norton as a framework for measuring organizational performance using a more balanced set of performance measures.
Linking the balanced scorecard to strategy show all authors. Kaplan accounting, harvard and norton, president of renaissance solutions inc. Norton s concept of the balanced scorecard revolutionized conventional thinking about performance metrics. The balanced scorecardmeasures that drive performance robert s. Traditionally companies used only shortterm financial performance as the measure of success. The development of the balanced scorecard method occurred because many business organizations realized that focus on a onedimensional measure of performance. Preparation for the exercise includes reading about the bsc or visiting various web sites such as the balanced scorecard collaborative at. Translating strategy into action kindle edition by kaplan, robert s. Norton, recently wrote an article, the future of the balanced scorecard.
The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve. Balanced business scorecard a strategic performance measurement system. The balanced scorecard was developed to measure both current operating performance and the drivers of future performance. Includes index measurement and management in the information age why does business need a balanced scorecard. Measuring business strategy financial perspective customer perspective internalbusinessprocess perspective learning and growth perspective linking balanced scorecard measures to your strategy structure and strategy. Using the balanced scorecard as a strategic management. The bsc technique was developed by kaplan and norton 1992, 1996 to combine financial control measures with nonfinancial control measures. Kaplan and nortons future vision of the balanced scorecard. Executive performance needs to be judged on success at meeting a mix of both financial and nonfinancial measures to effectively operate a business. 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.
Although kaplan and norton s work has largely been interpreted and used by practitioners in the area of performance measurement, their balanced scorecard framework, and the processes associated with its production are more fundamentally concerned with strategy articulation and communication. Balanced scorecard basics balanced scorecard institute. Commentary transforming the balanced scorecard from. The balanced scorecard measures that drive performance. The scorecard measures organizational performance across four linked perspectives. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation. The balanced scorecard as a communication protocol for. Use features like bookmarks, note taking and highlighting while reading the balanced scorecard. In addition, it can help provide information on the chosen strategy more. Using the balanced scorecard as a strategic management system by robert s. The balanced scorecard as a performance management tool. By 1996, user companies had further developed it as a strategic management system linking longterm strategy to shortterm targets. Using the balanced scorecard as a strategic management system. 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.