Balance scorecard

Question 1

What is the balance score card?

Answer 1

A framework to incorporate non-financial measures.

MA used to focus primarily on financial performance measures, greater emphasis on non-financial now due to Kaplan and Norton BSC.

Question 2

What does the balance score card do?

Answer 2

Link performance measures to organisations strategy.

Is used to clarify, communicate and manage strategy.

Can either monitor and improve performance or aid in forming and implementing performance.

Question 3

What does the BSC look at?

Answer 3

Looks at 4 perspectives:
- Customer (How well it meets client needs)
- Internal business performance (Efficiency of internal operations creating value to customers)
- Learning and growth (Examines an organization’s human capital, information systems, and culture. It focuses on intangible assets that support long-term growth and improvement)
- Financial (a way to measure a company’s financial performance, helps companies ensure they’re generating profits and managing resources to grow, it helps companies understand how their financial goals impact their overall performance)

• all 4 perspectives should be translated into specific performance measures, targets and initiatives.

Question 4

What is an assumption of the BSC?

Answer 4

That performance measures are part of a cause - effect relationship.