Week 7

Question 1

What is the Balanced Scorecard?

Answer 1

The Balanced Scorecard (BSC) is a strategic performance management tool that helps organizations track and manage their strategic objectives across four key perspectives: financial, customer, internal business process, and learning & growth

Question 2

What are the four perspectives of the Balanced Scorecard (BSC)?

Answer 2

The four perspectives are:
Financial - Measures the financial performance of the organization.
Customer - Focuses on customer satisfaction and retention.
Internal Business Process - Looks at the efficiency of internal operations.
Learning & Growth​ - Concerns the development of the workforce and innovation

Question 3

What are some key performance measures for each perspective of the BSC?

Answer 3

Financial: Return on Investment (ROI), Profit Margin, Revenue Growth.
Customer: Customer Satisfaction, Retention Rate, Market Share.
Internal Business Process: Process Efficiency, Cycle Time, Quality Control.
Learning & Growth: Employee Training Hours, Employee Turnover, Innovation Rate​

Question 4

Why is the Balanced Scorecard important for a company? What are its advantages?

Answer 4

The Balanced Scorecard is important because it provides a comprehensive view of business performance, balancing financial and non-financial measures.

Question 5

How is it linked to another perspective?

Answer 5

The perspectives in the BSC are linked through cause-and-effect relationships. For example, improvements in the Learning & Growth perspective (e.g., employee skills) lead to better Internal Business Processes, which enhance Customer satisfaction and ultimately improve Financial performance

Question 6

Why are the measurements in the Balanced Scorecard important, and how do they link to strategy?

Answer 6

The measurements in the BSC are important because they help align daily operations with the overall strategy of the company. They ensure that all areas, from financial outcomes to employee development, contribute to long-term objectives, improving decision-making and resource allocation

Question 7

Benefits of Using BSC

Answer 7

Provides a holistic view of organizational performance.
Translates strategic goals into measurable performance indicators.
Helps balance financial and non-financial objectives

Question 8

Criticisms of the BSC

Answer 8

Potentially ambiguous cause-effect links.
Limited perspectives; lacks broader measures like environmental impact.
Overreliance on quantitative data can overlook qualitative insights.