Meaning of balance score card

1. By: Saloni Misra

2. The Balanced scorecard is a
management system that
enables organizations to clarify
their vision and strategy and
translate them into action.

3. The critical characteristics that define
balanced scorecard are:
• Its focus on the strategic agenda of the
organization concerned.
• The selection of a small number of data
items to monitor.
• A mix of financial and non-fuinancial data
items.

5. Three elements of balance scorecard, namely,
• Measurement System,
• Strategic Management,
• Communication Tools

6. Balance Scorecard is also used as Measurement
system of a organization. It enables an
organization to translate its mission/strategies
into objectives and measured
organized into four perspective/dimensions:
1.Financial Perspective,
2. Customers Perspective,
3. Internal business process,
4.Learning and growth.

7.  Financial analysis, which includes measures
such as operating income, sales growth
and return on investment.
 Customer analysis, which looks at customer
satisfaction and retention.
 Internal analysis, which looks at how business
processes are linked to strategic goals.
 Learning and growth analysis, which assesses
employee satisfaction and retention, as well
as information system performance.

8.  • Strategy management is a performance
evaluation measure.
 It alleviates many of the issues associated
with effective strategy implementation,
namely:
1. Vision barrier,
2. People barrier,
3. Resource barrier,
4. Management barrier.

9.  Sharing scorecard results throughout the
organization gives the employees the
opportunity to discuss the assumptions
underlying the strategy.
 Understanding the strategy can unlock many
hidden capacities of the organization as
employees know how they can contribute in
the process.

10. It helps to communicate the strategy
of organization to all members.
It motivates managers to take
actions that results in improved
financial performance.