BALANCED SCORECARD 1
A balanced scorecard is strategic in measuring stakeholder valuecreation in business and organizations. In 1992, the concept wasintroduced by Drs Robert Kaplan and David Norton in a HarvardBusiness Review (HBR) article. In that regard, it was chosen as theleading idea in the article’s seventy five year history. A fewreasons can explain why a balanced scorecard is important inmeasuring stakeholder value creation in businesses andorganizations. (Lester & Tom,2012). Four reasons are identified below:
The BSC (Balance Scorecard) provides stakeholders with a comprehensive measure of the organization’s progression in the quest for realizing strategic goals. It strengthens the goals of the organization by measuring the inputs that are significant to achieving the set values. However, it does not only measure the just the inputs that are easy to evaluate (Using the as a Strategic Management System, 2014).
The scorecard converts the mission (s) and strategy (s) into goals and measures. It permits the businesses to inter-connect corporate strategies with the key performance indicators at the divisional, departmental, and employee level, and therefore, instilling a sense of hope in the stakeholder’s investment (Using the Balanced Scorecard as a Strategic Management System, 2014).
It is also a driving force towards the balancing of various stakeholders’ concerns so as to expand the business general performance. The BSC is a powerful resource founded on the basis that the leaders should incorporate a set of real-time and recognizable values that will ensure that the business is run efficiently (Using the as a Strategic Management System, 2014).
A balanced scorecard is dynamic, adaptable and flexible. This means that the stakeholder’s value creation is given an open opportunity to develop to advanced stages. Flexibility ensures that the strategies are met and changed to adopt and increase the chances of success (Using the as a Strategic Management System, 2014).
In my business, adaptability and flexibility would be a drivingfactor in alignment with stakeholders’ expectations. Flexiblestrategies and objectives would ensure that challenges and weaknessesare marked and thus, a makeover is created to adjust towardsachievements.
. Creating a balanced scorecard has various benefits and liabilities,as highlighted below:
It Provides a comprehensive review of the whole business or organization
It adds discipline and structure to the day-to-day organizational operations.
It is a driving factor in transformation of organizational behavior and performance (Williams & Kathy, 2012).
It captures the tangible and intangible values of businesses.
It creates focused work force that is aligned to the organization’s strategy.
It supports stakeholder value creation. (Williams & Kathy, 2012).
Creating a successful BSC involves the involvement of all stakeholders. However, it is a costly endeavor because it requires a lot of funds and resources to bring the objectives into fruition (Williams & Kathy, 2012).
The financial information included in a BSC is limited and not sufficient to full implementation of the objectives (Williams & Kathy, 2012).
The metrics used to identify balanced scoreboards, are only specific to a certain company. Many companies tend to use general metrics that are not applicable to their own needs (Williams & Kathy, 2012).
The concept of a balanced scorecard is basic but is outstandinglyresourceful if put into action. An organization will definitelyexperience advanced growth and performance as long as the BSC isgiven top priority.
Lester, Tom. (2012). "Measurefor Measure: The Remains a Widely Used ManagementTool, but Great Care Must Be Taken to Select Appropriate and RelevantMetrics." TheFinancial Times, 6October.
Using the as aStrategic Management System. (2014). "Harvard BusinessReview 74, no. 175.
Williams, Kathy. (2012). "WhatConstitutes a Successful ?" StrategicFinance 86, no. 5