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 The performance management system called balanced

score card, was developed by Robert Kaplan and David


Norton
 It emphasis on short term financial objectives and seeks to
improve the organizational performance by focusing
attention on measuring and managing wide range of
financial and strategic objectives.
 The balanced scorecard is a management system (not
only a measurement system) that enables organizations to
clarify their vision and strategy and translate them into
action.
 It provides feedback around both the internal business
processes and external outcomes in order to continuously
improve strategic performance and results.
 The objectives and measures of the
scorecard are derived from an
organizations vision and strategy and
these view organizational performance
from four perspectives:
 Financial
 Customer
 Internal business process and
 Learning and growth
1. Financial: How do we look to our Shareholders?
2. Customer: How do our Customers See Us?
3. Internal Business Process: What should we do that is
Excellent?
4. Employee and Organization Innovation and Learning:
Can we continue to Improve and Add Value?
Example of the Basic Building Blocks of the Strategy
and displaying the strategy’s cause-effect hypotheses
Financial Perspective 1. The economic model of
Return on
key levers driving
Investment financial performance
Revenue Productivity
Strategy Strategy

Sources of Growth Sources of Productivity

Customer Perspective 2. The value proposition of


Value Proposition
target customers
Relatio-
Price Quality Time Function Image
ship

Internal Process Perspective


3. The value chain of core
“Build the “Make the “Deliver the “Service
business processes
Brand” Sale” Product” Exceptionally”

Learning & Growth Perspective 4. The critical enablers of


Staff Climate for
performance improvement,
Technology
Competencies + Infrastructure + Action change and learning

Source: Presentation of Balanced Scorecard Collaborative


 Change: Formulate and current customers”
The Revenue Growth Strategy

“Improve stability by br oadeni ng the sour ces of revenue from

Increase
Broaden
Revenue
Mix
Improve
Returns
Improve
Operating
Efficiency
The Productivity Strategy

“Improve operating efficiency by s hifting c ustomers to more cost-


effective channels of distribution”

Increase
Financial
Perspective

communicate a new
Customer Customer Customer
Confidenc e in Satisfaction Perspective
Our Financial Through Superi or
Advice Execution

Internal
Perspective

Understand Develop Cross-Sel l Shift to Provide


Mini mize
Customer New the Product Appropriate Rapid
Problems
Segments Products Line Channel Response

Increase
Employee
Productivity Learning
Perspective

strategy for a more


Develop Access to Align
Strategic Strategic Personal
Skills Information Goals

competitive environment
 Growth: Increase revenues,
not just cut costs and
enhance productivity
 Implement: From the 10 to
the 10,000. Every employee
implements the new growth
strategy in their day-to-day
operations
 It is used to align the business activities to vision and strategy.
 It improves Internal & External communications.
 It is used to monitor organizations performance.
 It provides management with comprehensive picture of operations.
 It provides strategic feed back.
 It improves decisions & better solutions.
 It doesn’t provide Recommendations.
 It is not fully Efficient.
 It takes time.
 It is High Implementation of cost.
 It can show low profit.