Balanced scorecard can be defined as the alternative way to analyze the various conventional financial indicators. It helps the management to identify the various points that should be analyzed to evaluate the effectiveness of the strategies. In both the private and the public sectors, balanced scorecard has its own significance to support the strategies and it focuses on operational, functional and financial strategies of the organization (Balanced Scorecard Basics, 2009).
The main concern of balanced scorecard is not only to analyze the financial metric; but also to categorize the various operations in the Governmental institutions. So, it can be said that this is an effective methodology to fulfill the requirements of Government to analyze the performance and result. In other words, balanced scorecard is a system to analyze the strategic planning and effectiveness of management system ,all over the world and it is comprehensively used by all the Governmental organizations, private sector and non-profit and profit organizations, etc.
There are mainly four kinds of elements that are associated with balance scorecard, which are customers, growth, financial prospective and internal business process and learning (What is the Balanced Scorecard, 2007). It also helps the management to improve the communications strategies both at the
Need essay sample on "Management consultant"? We will write a custom essay sample specifically for you for only $ 13.90/page
This methodology of balanced scorecard views the four strategic areas of performance that are performance of the employees, response of customers, financial performance of the company and various business processes to achieve the goals. By using this, Management develops a metrics and collects data against all these areas. Each perspective of the evaluation area is divided into four to six measures by the balanced scorecard that helps the Management to influence and motivate the employees to drive the overall strategic performance.
History Prior to developing a balance scorecard measurement system, the companies enforce various other sets of performance measuring tools in order to manage or control their corporate skillfulness. Like, at the time of industrial revolution in France, the concept of ‘tableau de bar’ was laid down, which furnished the control panel to assess the corporate efficiency. In the year 1950s, General Electric also made ‘dashboards of performance standards’ in order to chase the manufacturing process functioning (Davey, 2007).
In the year 1992, the balanced scorecard measurement system was originally initiated by the Robert S. Kaplan, Professor at the Harvard Business School and David P. Norton, Management consultant. In the innovative business environment of the 1990s, they mainly conceived balance scorecard as the management system, whereas in some areas, it is basically comprehended as a performance measurement tool that permits business owners to become straighter and strategy centered, so that it will be easy for the managers or executives to convert strategies into the activities (Balanced Scorecard Basics, 2009).