Balanced Scorecardfour Perspectives To Implementing Success
In the business world, tangible success and prosperity are measured by dollars. Each quarter, a company generates reports, which determine financial status based on past performance: Are we “in the red,” or “in the black?” Entrepreneur Magazine lists “Find a need and fill it” as rule number one in successful business—and that’s exactly what Robert Kaplan and David Norton of the Harvard Business School set out to do in the mid-1990s. Kaplan and Norton were able to identify that one of the management problems of business up to that time was that it was based solely on financial measures. While this had been successful in the past, modern business requires more comprehensive measures: Though financial measures are obviously still necessary, they are limited in that they can only show what has happened in the past and cannot show where a business is headed in the future.
To provide a management system that was better at dealing with today's business pace and to provide business managers with the information they need to make better decisions, Kaplan and Norton developed the Balanced Scorecard—a management system that is a way to settle and achieve the goals and objectives for an organization. (Balanced Scorecard Institute, 2008.) The concept has quickly become recognized as an important managerial tool with the potential to increasingly improve organizational performance and has been adopted in some form by a wide variety of businesses and corporations worldwide. In an article for Ivey Business Journal, Hendricks, Menor and Wiedman state that over the past decade, the Balanced Scorecard has become a widely advocated management tool and has become largely synonymous with “best practices.” (2004.)
In simple terms, the Balanced Scorecard method is a management system that allows an organization to set, track and achieve its entire key strategies and objectives. After its business strategies are developed,...