Nov 07, 2007 using the balanced scorecard as a strategic management system. Balanced scorecard chartered institute of management. Despite the best intentions of those at the top, lofty. Robert kaplan and david norton created the balanced scorecard approach in the. This article, fi rst published in 1996, describes how the balanced scorecard can help senior managers systematically link current actions with tomorrows goals, focusing on that place where, in the words of the authors, the rubber meets the sky. Conceptual foundations of the balanced scorecard 3. Balanced scorecard basics balanced scorecard institute. In this article from 1996, the authors describe how the. Maintaining the focus that balanced scorecard was intended to support the management of strategic implementation, kaplan and norton further described the use of this development of the balanced scorecard as the central. Introduction to the balanced scorecard and performance measurement systems 5 as a result of continued research and innovations over the last 15 years, the bsc has gone through an evolutionary process of improvement, from performance measurement 1990 1996 to performance management 1996 2000, to becoming a globally. Balanced scorecard as a strategic management system. Kaplan rs, norton dp 1996 using the balanced scorecard as a strategic management system.
Using the balanced scorecard as a strategic management system in the libyan construction industry abdussalam shibani, nawal gherbal published pdf deposited in coventry university repository original citation. Introduction to the balanced scorecard and performance. Using the balanced scorecard as a strategic management. The book explains that we are now in the information age and the old accounting from the industrial age doesnt properly reflect or measure a company. First, there is a lot of evidence supporting an argument that a balanced scorecard translates a strategy into operational terms kaplan and norton, 1996. Developing a framework for entrepreneurs to transform their ideas into businesses. In this book, the authors apply their revolutionary balanced scorecard management. This article, first published in 1996, describes how the balanced scorecard can help senior managers systematically link current actions with tomorrows goals. The concept of balanced scorecard has evolved beyond the simple use of perspectives and it is now a holistic system for managing strategy.
Kaplan is a professor at harvard university and david p. The balanced scorecard addresses an everincreasing accounting problem, measuring current companies using old accounting techniques. This cited by count includes citations to the following articles in scholar. Using the balanced scorecard as astrategic management. Strategic goals can be monitored using a balanced score card as a strategic management tool as described in the publication of kaplan and norton kaplan and norton 2007. It is dedicated to the issue of potential implementation of balanced scorecard as a strategic management. The study provides some insights for firms in the process of implementing a supply chain management system. This paper describes its evolution, recognising three distinct generations of balanced scorecard design. Financial for guiding measures are information age must create future value inadequate organizations through. For the balanced scorecard to be used in this way, however, the measures must provide a clear representation of. The balanced scorecard was first introduced in the early 1990s through the work of robert kaplan and david norton of the harvard business school.
By translating their strategy into the logical architecture of a strategy map and balanced scorecard, organizations create a common understandable point of reference for all their units and employees. The fourth, and final, process is feedback and learning. The common point between the two lists is kaplan and nortons 1996 balanced scorecard. Balanced scorecard to evolve from an improved measurement system to a core management system kaplan and norton 1996. Pdf the development of the balanced scorecard as a. The development of the balanced scorecard as a strategic management tool. David norton and i introduced the balanced scorecard in a 1992 harvard business. More recently it has been proposed as the basis for a strategic management system.
The balanced scorecard as a performance management tool. The effect of balanced scorecard on strategy participation. Norton s everal years ago, we introduced the concept of a balanced scorecard for motivating and measuring business unit performance. Learn about the balanced scorecard, which can be used as a strategic management system, and how its used. In this article from 1996, the authors describe how the balanced scorecard can address a serious deficiency in traditional. Some companies went a step further, however, and discovered the scorecards value as the cornerstone of a new strategic management system. Feb 25, 2009 mba presentation explaining kaplan and nortons balanced scorecard approach.
By 2005, the board and management began to feel a need to build a new strategic plan from the ground up. Article pdf available in rangelands 292 january 2007 with 2,337 reads how we measure reads. Jan 17, 2015 the balanced scorecard is a framework, or what can be best characterized as a strategic management system that claims to incorporate all quantitative and abstract measures of true importance to the enterprise. Summary by steve barnier master of accountancy program university of south florida, summer 2001.
But often the efforts of individual units are not coordinated, resulting in conflicts, lost opportunities, and diminished performance robert s. The paper relates the empirically driven developments in balanced scorecard thinking with. New developments in a third hbr article using the balanced scorecard as a strategic management system 1996. Library wanted a holistic strategic management system using the balanced scorecard framework linked to the universitys balanced sc orecard. Executives of organizations need summary information to help them to make decisions. The balanced scorecard as a performance measurement book was firstly published back in 1996. Mba presentation explaining kaplan and nortons balanced scorecard approach.
Norton as companies around the world transform themselves for competition that is based on information, their ability to exploit intangible assets has become far more decisive than their ability to invest in and manage pbysical assets. Using the balanced scorecard on supply chain integration. Linking the balanced scorecard to strategy robert s. Free balanced scorecard lesson from the free management training website. Balanced scorecard is a management system that enables organizations to translate the vision and strategy into action. Kaplan and norton 1996 argued against this idea and believed that companies. Pdf using the balanced scorecard as a strategic management. Strategic performance measurement using balanced scorecard. Using shortterm milestones to evaluate the progress toward the strategic goal is what results from using the balanced scorecard. Using the balanced scorecard as a strategic management system by rohert s.
Mar 19, 20 balanced scorecard it is discovered as the cornerstone of a new strategic management system it addresses a serious deficiency in traditional management system. Because they do not take enough into consideration a balanced scorecard augments traditional financial measures with benchmarks for performance in. The name balanced scorecard comes from the idea of looking at strategic measures in addition to traditional financial measures to get a more balanced view of performance. It ensures that senior management takes a balanced view about. Measurement of performance in kenya has become continuous process. The role of balanced score card as a strategic management. The development of the balanced scorecard as a strategic. Commentary transforming the balanced scorecard from. Some of the balanced scorecard measures, while still important to the.
This system provides feedback on internal business processes and external outcomes to continually improve organizational performance and results. Innovative performance measurement and management control system ondrej zizlavsky1 abstract the paper presents an overview of studies that have described the emergence of innovative performance measurement systems. Balanced scorecard it is discovered as the cornerstone of a new strategic management system it addresses a serious deficiency in traditional management system. The balanced scorecard is a framework, or what can be best characterized as a strategic management system that claims to incorporate all quantitative and abstract measures of. Using the balanced scorecard as a strategic management system hbr bestseller. Norton as companies around the world transform themselves for competition that is based on information, their ability to exploit intangible assets has become far more decisive than their ability to invest in and manage pbysical. With the balanced scorecard in place managers can monitor feedback and relate this to the strategy. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Using the balanced scorecard as a strategic management system. Balanced scorecard financial measurement of organizational. Norton argue that the responsibility for this critical alignment lies with corporate headquarters. It represents a management classic writing that develops a common platform in the middle of conventional and, shortterm faced different management system approaches and a more stabilized attitude towards integrating new measurement types that are.
The paper uses the following structure for organizing the origin and subsequent development of the balanced scorecard. Commentary transforming the balanced scorecard from performance measurement to strategic management. Balanced scorecard bsc a strategic management tool mba. The balanced scorecard is a widely adopted performance management framework first described in the early 1990s. In this article from 1996, the authors describe how the balanced scorecard can address a serious deficiency in traditional management systems. The balanced scorecard as a strategic management system. Spekman r 2003 strategic supply and the management of inter and intraorganizational relationships.
The benefits of using balanced scorecard as a strategic management system are linked to the structure of a balanced scorecard process. Norton as companies around the world transform themselves for compe tition that is based on information, their ability to exploit intangible assets has become far more decisive than their ability to invest in and manage physical assets. Putting bsc to work1993 important management practice in 75 years using bsc as a strategic management system 1996 balanced scorecard. Using the balanced scorecard as a strategic management system by robert 8. Balanced scorecard bsc a strategic management tool. Using the balanced scorecard as astrategic management system. Despite the best intentions of those at the top, lofty statements about becoming best in class, the. Why do budgets often bear little direct relation to a companys longterm strategic objectives. A practitioners guide to the balanced scorecard pdf 268kb. Published pdf deposited in coventry university repository.
Many organizations especially in the private sector have adopted the balanced scorecard as a management and measurement. Balanced scorecard basics the balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. Balanced scorecard a strategic planning and management.