Balanced scorecard

Question 1

What are the issues with implementing the balanced scorecard?

Answer 1

Board commitment

Conflicting measures - i.e. profit in financial, but employee training in innovation and learning

Qualitative data can be hard to interpret

Question 2

What is the board commitment issue?

Answer 2

Commitment of the board is essential
Without this other managers are unlikely to work hard to implement and use the approach

May be abandoned if the board already find it difficult to use - wasted time and money

Question 3

What is the collecting and interpreting data issue?

Answer 3

Qualitative data such as customer satisfaction is hard to interpret

A lack of expertise in interpreting this data may lead to wrong decisions being made

Collection of data will take time and resources
May be staff resistance to change - training can help overcome this

The costs of implementing the balanced scorecard should be weighed up with the benefits of doing so

Question 4

What is the main issue with selecting measures?

Answer 4

Financial measures are backward-looking and measure the results of actions taken in the past

Non-financial factors are the drivers of future performance, and will allow them to achieve their strategic objectives

Question 5

What are the 4 key issues with implementing the balanced scorecard?

Answer 5

Selecting measures
Conflicting measures
Board commitment
Collecting and interpreting data