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    The article discusses how the Balanced Scorecard was created to measure both current operating performance and future performance drivers. Many managers incorrectly think they are using a Balanced Scorecard by simply adding generic, non-financial measures to traditional financial metrics without linking objectives and measures to business strategy. The authors argue that a truly effective Balanced Scorecard contains outcome measures and linked performance drivers derived from the business unit's strategy in cause-and-effect relationships.

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    The article discusses how the Balanced Scorecard was created to measure both current operating performance and future performance drivers. Many managers incorrectly think they are using a Balanced Scorecard by simply adding generic, non-financial measures to traditional financial metrics without linking objectives and measures to business strategy. The authors argue that a truly effective Balanced Scorecard contains outcome measures and linked performance drivers derived from the business unit's strategy in cause-and-effect relationships.

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    10 views1 page

    Review 3

    Uploaded by

    nettynuraini
    The article discusses how the Balanced Scorecard was created to measure both current operating performance and future performance drivers. Many managers incorrectly think they are using a Balanced Scorecard by simply adding generic, non-financial measures to traditional financial metrics without linking objectives and measures to business strategy. The authors argue that a truly effective Balanced Scorecard contains outcome measures and linked performance drivers derived from the business unit's strategy in cause-and-effect relationships.

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    of 1

    ARTICLE

    Linking the Balanced Scorecard to Strategy


    by Robert S. Kaplan, David P. Norton
    Source: California Management Review 29 pages.
    Publication Date: Oct 01, 1996. Prod. #: CMR073-PDF-ENG

    The Balanced Scorecard was developed to measure both current operating


    performance and the drivers of future performance. Many managers believe they are
    using a Balanced Scorecard when they supplement traditional financial measures with
    generic, non-financial measures about customers, processes, and employees. But the
    best Balanced Scorecards are more than ad hoc collections of financial and nonfinancial measures. The objectives and measures on a Balanced Scorecard should be
    derived from the business unit's strategy. A scorecard should contain outcome
    measures and the
    performance drivers of those outcomes, linked together in cause-and-effect
    relationships.

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