Balanced Scorecard

A balanced scorecard is a performance measurement system that provides organizations with a comprehensive view of their business. It allows them to track progress, identify areas for improvement, and make informed decisions about where to allocate resources.

The balanced scorecard approach was developed in the early 1990s by Drs. Robert Kaplan and David Norton. Their goal was to create a system that would help organizations achieve their strategic objectives. The balanced scorecard has four main components: financial measures, customer measures, internal business process measures, and learning and growth measures.

Each of these components is important in understanding how well an organization is performing. Financial measures focus on the bottom line and provide insights into whether an organization is making or losing money. Customer measures give insight into whether customers are satisfied with the products or services they receive. Internal business process measures show how well an organization is functioning and whether it is improving or declining over time. Learning and growth measures highlight an organization’s ability to innovate and adapt to changes in the marketplace.

The balanced scorecard approach provides organizations with a comprehensive view of their business and helps them track progress toward their strategic objectives. It is a useful tool for decision-making, resource allocation, and identifying areas for improvement.