Kaplan & Norton's Balance Scorecard

Question 1

Balance Scorecard

Answer 1

Vision and Strategy- Financial, Internal Processes, Learning & Growth, Customer

Question 2

Balance Scorecard- Example

Answer 2

Question- how do we create value for shareholders?
OBJECTIVE- increase profitability
MEASURES- ROCE, sales growth
TARGET- increase ROCE by 3%
INITIATIVE- promotional campaigns, increase efficiency of production

Question 3

Advantages

Answer 3

• helps business focus on what needs to be donw
• can be used for several functional areas
• helps break down corporate objectives for local managers
• overturns traditional idea of the organisation as a collection of isolated, independent functions and departments

Question 4

Disadvantages

Answer 4

• too many performance indicators
• balance between areas can be difficult
• needs to be regularly updated to be useful
• senior management may be too concerned with financial performance