Advantages of Balanced Scorecard
I shall claim that the advantages that derive from the adoption of the Balanced Scorecard system are transparent and help an organization to focus on its strategic direction.
First, the components of an effective Balanced Scorecard are the organization’s mission, its core values, and its strategy. Subsequently, if the BSC is solid, then the short, medium and long-term visions of the company are managed in a continuous, cohesive manner (3).
Second, the Balanced Scorecard connotes the significance of the intangible assets, allowing organizations to benefit from their astronomical potential. Most significantly, the implementation of BSC gives greater insights to common questions raised in annual employee motivation surveys, such as "How does what I do every day fit into the bigger picture of the company?". As Gumbus and Lyons (2002) proclaim, the BSC enables employees to understand what they need to do on a daily basis to impact results (5).
Third, considering the four perspectives as a whole, BSC ensures that the senior management has a balanced view of the organization’s performance. In other words, the management’s attention is focused on measures crucial to the successful implementation of the company’s strategy. Following this, “The Nielson Report” (2003) claims that BSC avoids the tendency to engage in the “majoring in the minors” characteristic of many managers (6).
Fourth, Kaplan & Norton (1992) support that a well-designed BSC denotes that there is a direct, crucial relationship between the top-level strategy and the middle management level so that they are both dedicated towards the company’s objectives.
Fifth, for Niven (2006), the implementation of the Balanced Scorecard reporting system implies that a great amount of intelligence is harnessed by unearthing background material (see Figure 7). This is definitely going to assist an organization to remain competitive in the long term, develop competitive advantages...