The document discusses the balanced scorecard concept proposed by Robert Kaplan and David Norton in 1992 as an alternative to only measuring managerial control through financial metrics. The balanced scorecard model suggests organizations view their performance through four perspectives: financial, customer, internal business processes, and learning and growth. By developing metrics in each of these areas and analyzing performance, managers can gain a more well-rounded understanding of organizational success beyond just financial measures.

1. MADE BY
ASTHA MEHROTRA

2. So where is this concept
coming from?

3. 
 PLANNING
 ORGANISING
 LEADING
 CONTROLING:- Establishing standards of
performance; measuring performance and taking
corrective action
MANAGERIAL
FUNCTIONS

4. 
Not on how managers should engage
in this control function
But
What actually should they control
Our focus?

5. 
 Traditional function:-
Financial aspect:-
 Managers measure costs and profit because they are
easy to measure and important for the success of the
organisation
 But the problem to focus only on one measure is that
it fails to depict the reality
So, how to control?

6. EXAMPLE-
If costs are the yardstick by
which management may
measure success then
management may decide to
layoff people in order to save
costs

7. 
On surface this appears to
be a good decision as
costs are lower which will
probably help department
achieve it’s goals
but is there a long term
impact???

8. 
So, what should we do
instead??
Answer was given by –
Robert Kaplan and David
Norton in 1992

9. 

10. 
Vision
and
Strategy
Financial
Internal
business
Process
Learning
and
Growth
Customer

11. 
EXAMPLE

12. 
4 ORIGINAL BUSINESS
PERSPECTIVES
The balance scorecard model suggests
that view the organization from 4
perspectives.
Then develop metrics, collect data and
analyse it relative to each of these
perspectives

13. 
SO, LETS GET TO KNOW
A LITTLE BY VISUALS

14. 
video

15. 
 Was first published in 1992 by Kaplan and Norton, a
book followed in 1996.
 Traditional performance measurement that only
focus on external accounting data are obsolete.
 The approach is to provide ‘balance’ to the financial
perspective.
BALANCED SCORECARD
CONCEPT

16. 
 Improve organisational performance by measuring
what matters
 Increase focus on strategy and results
 Align organisational strategy with workers on a day
to day basis
 Focus on drivers key to future performance
 Improve communication of the organization’s Vision
and Strategy
 Prioritize Projects/ Initiatives.
WHY USE A BALANCED
SCORECARD?

17. 
 Lack of a well defined strategy
The balanced scorecard relies on well defined strategy
and understanding of linkages between strategic
objections and metrics. Without this foundation
implementation could fail.
 Too much focus on lagging measures
Focusing only on lagging measures may cause a lack of
priority or opportunity for the leading measures.
 Use of Generic Metrics
Don’t just copy metrics from another firm. Identify
measures that apply to your strategy and competitive
position.
SCORECARD POTENTIAL
PITFALLS & CRITICISM

18. 
 Help align key performance measures with strategy at all
levels of the organisation
 The methodology facilitates communication and
understanding of business goals and strategies at all
levels of an organisation
 Transforms an organisation’s mission statement and
strategic plan from a passive document into the
“marching orders” for the organisation on a daily basis.
 It enables executives to truly execute their strategies by
identifying what should be done and measured
 Strategic initiatives that follow “best practices”
methodologies that cascade through the entire
organisation.
BALANCED SCORECARD
BENEFIT RE-CAP

19. 
TRY YOUR OWN EXAMPLE