Session 10 Flashcards
What is a Balanced Scorecard?
It is a performance measurement system/tool
What are some of the key aspects of Kaplan and Norton’s Balanced Scorecard?
What you measure is what you get!
What gets measured gets done: the things that companies measure indicate the things they do/strive for within the company (measure profitability: become profitable, measure environmental impact: become aware of the company’s pollution and attempt to combat that, etc)
“No single measure can provide a clear performance
target or focus attention on the critical areas of the
business.” The “bottom line” is not enough.
The bottom line is not enough because it can be easily influenced as a consequence of how it is recorded. We need multiple ways to measure a company’s performance in order to gain a full picture of how the company is doing
The traditional financial performance measures worked well for the industrial era.
The way in which we measure company’s must change with the times. We have now entered a knowledge-based economy, meaning that the resourced-based measurements no longer work as well as they once did.
What are the four perspectives for a Balanced Scorecard?
Customer perspective
Internal business perspective
Innovation and learning perspective
Financial perspective
What does Customer perspective ask?
What matters most to customers?
Understanding the customers desires and needs in order to gain a consumer audience: Time, quality, satisfaction, status,
What does Internal business perspective ask?
How can we meet customer expectations?
All the factors that go into serving the customer their desires and needs by way of influencing their expectations and performing to their customer’s standards (or the standards they gain as a consequence of company influence)
What does Innovation and learning perspective ask?
How can we make continual improvements?
Learning new techniques and innovating will lead to improvements that will allow the company to perform more efficiently in terms of both production and customer satisfaction
What does Financial perspective ask?
How can we ensure profitability for shareholders?
Analyzing financial at certain periods within the fiscal year/running the company properly will ensure that the company will be able to deliver to and keep shareholders, giving the company the money they need to perform well on the first three parts of the scoreboard
