The Balanced Scorecard

Question 1

What are the four measurements/perspectives of the balanced scorecard?

Answer 1

Financial perspective
Customer perspective
Internal business process perspective
Innovation and learning perspective

Question 2

How do you reinforce the elements of the perspectives?

Answer 2

By setting formal goals and measures

Question 3

What is an objective?

Answer 3

A specific result that can be measured

Question 4

What does the financial perspective look at?

Answer 4

Traditional financial performance: 
Sales
Costs
Gross profit margin
Earnings per share
Share price

Question 5

What are the criticisms of the balanced scorecard?

Answer 5

Potential information overload
Picking or inventing measures can be difficult
Difficulty and cost in obtaining the information needed
Conflict of interests
Too little attention to external factors

Question 6

What are the advantages of the balanced scorecard?

Answer 6

Helps to clarify how sustained, good financial performance can be achieved.
Highlight poor/good performance in any area.
All important aspects of a company’s existence are measured and monitored.
Targets are set for current & future performance.
Helps to balance long and short term objectives.