The Balanced Scorecard is a measure of the key
elements of a company’s strategy, ranging from
continuous improvement and partnerships, to
team work and global scale.
Organisations design their unique balanced
scorecard based upon their unique constraints. A
company’s performance depends on how it
measures its performance.
Managers cannot afford to rely on either financial
or operational measures exclusively.
No single measure provides a clear performance
target focusing on the critical areas of a business.
Thus there is a need for balanced representation
of both financial and operational measures.
Kaplan and Norton have devised a balanced
scorecard- a set of measures that give top
managers a quick but comprehensive view of the
business.The balanced scorecard consists of –
a)financial measures that measure the actions
b)The scorecard also contains operational
measures such as customer satisfaction, internal
processes and the organisation’s innovation and
The balanced scorecard can be compared with
dials and indicators in an airline cockpit.
Pilots need detailed information of many aspects
of flight for navigating and flying an airplane.
These information is necessary to get an idea of
the current and predicted environment..
Relying on an single measure can be fatal.
Just like a pilot, a manager should be able to view
performance in several areas at the same time.
Using a balanced scorecard, managers can look at the business in
terms of four dimensions. The balanced scorecard answers four
basic questions1. HOW DO CUSTOMERS SEE US?
2.WHAT MUST WE EXCEL AT?
3.CAN WE IMPROVE AND CREATE VALUE?
4.HOW DO WE LOOK TO SHAREHOLDERS?
WHAT MUST WE EXCEL AT?
Manufacturing geometry vs.
Manufacturing excellence Cycle time/ unit cost/yield
New product introduction
Actual introduction schedule
CAN WE IMPROVE AND
Time to develop next generation
Process time to maturity
Percent of products that equals 80%
Time to market
New product introduction vs.
HOW DO WE LOOK TO
growth and operating
income by division
share and ROI
Many firms use balanced scorecard as a strategy tool
It brings many elements of a company’s strategy in a
The balanced scorecard is appropriate for
organisations of today to be on track and move
confidently into the future. The scorecard keeps
strategy and vision at the center