Balanced Scorecard
Balanced Scorecard
Until recently, most of the studies for performance management were done in the field of human resources performance assessment and improvement. Today’s practices however, focuses increasingly on management system and aims for developing monitoring and control systems on strategic fields which would improve organizational performance. Although several different methods have been developed, Balanced Scorecard, which has found an extensive field of application including many companies within Turkey, collects a number of methods under the same roof.
We Turn Strategy into Action!
In the early 90’s a new strategic management approach was brought forward by Robert Kaplan and David Norton. In contrast to the weakness and narrow scope of previous management approaches, balanced scorecard pointed out which other aspects should be considered in order to balance the financial results which is used by most of the organizations. Balanced scorecard, is not only a measurement system. It is rather a management system that enables organizations to define their vision and strategies clearly and turn these into actions at operational level. It provides information about business process and output of these processes constantly for continuous improvement of performance and results.
Kaplan and Norton defines balanced scorecard concept as follows in their academic research.
“Balanced scorecard takes financial performance indicators in consideration. But financial indicators are about past and adequate for industry age companies in which customer relations and long term capabilities are not important. Even though, these financial indicators can be guiding for information age companies, it is not adequate for these companies anymore which invests in and creates value by taking customers, suppliers, employees, business processes, technology and innovation into center of interest area.”
Balanced scorecard evaluates the organization in four main perspectives given below and suggests identification, data collection and analysis of metrics in these four perspectives by making cause-effect relation between each other.
- Continuous Learning and Development Perspective
- Internal Business Process Perspective
- Customer Perspective
- Financial Perspective