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advantages and disadvantages of balanced score card?
Solution
Advantages:
1) It Helps facilitates better communication, coordination and understanding of goals and
strategies accross teams and hierarchy of the organization.
2) Balanced scorecard method enables the firm to focus on all four aspects of a company's
performance i.e.
instead of focusing only on financial health, which helps to get proper view of the company
performance.
3) Balanced Scorecards system allows all the stakeholders to determine not only short term, but
long term objectives as well.
4) With the help of balanced scorecard, the organization can be sure that any strategic plan
implemented is inline with the desired outcome.
5) It helps to integrate innovation and process improvement methods such as six sigma and lean
manufacturing to a organizational goal. It also makes sure that the voice of the customer is
equally very important.
Disadvantages:
1) Balanced Scorecard do not consider direct financial analysis of economic value or risk
management. Selection of goal under Balanced Scorecard may not consider opportunity cost.
2) Balanced Scorecard may lead to new type of reporting without improving performance, it may
lead to new set of non-value-added reporting. or, may lead to deviation from achieving actual
goals.
3) Performance of balanced scorecard system may not be quantifiable. As quality levels, it
cannot be quantified except by surveys or management opinion.

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advantages and disadvantages of balanced score cardSolution.pdf

  • 1. advantages and disadvantages of balanced score card? Solution Advantages: 1) It Helps facilitates better communication, coordination and understanding of goals and strategies accross teams and hierarchy of the organization. 2) Balanced scorecard method enables the firm to focus on all four aspects of a company's performance i.e. instead of focusing only on financial health, which helps to get proper view of the company performance. 3) Balanced Scorecards system allows all the stakeholders to determine not only short term, but long term objectives as well. 4) With the help of balanced scorecard, the organization can be sure that any strategic plan implemented is inline with the desired outcome. 5) It helps to integrate innovation and process improvement methods such as six sigma and lean manufacturing to a organizational goal. It also makes sure that the voice of the customer is equally very important. Disadvantages: 1) Balanced Scorecard do not consider direct financial analysis of economic value or risk management. Selection of goal under Balanced Scorecard may not consider opportunity cost. 2) Balanced Scorecard may lead to new type of reporting without improving performance, it may lead to new set of non-value-added reporting. or, may lead to deviation from achieving actual goals. 3) Performance of balanced scorecard system may not be quantifiable. As quality levels, it cannot be quantified except by surveys or management opinion.