Balanced Scorecard


The term Balanced Scorecard  has multiple meanings. The initial meaning, when it was first popularized in early 90s, was of an approach for generating a performance report, by grouping performance measures by perspectives, the most commonly used being: Financial, Customer, Internal Processes and Innovation  & Learning.


The four perspectives offer a balance between short-term and long-term objectives, between outcomes desired and performance drivers of those outcomes, and between hard objective measures and softer, intangible measures.



Source: adapted from Kaplan and Norton, 1996


  • The financial perspective. In the private sector, these measures have typically focused on profit and market share. The key question that must be answered is, How do satisfy the financial expectations of our stakeholders?
  • The customer perspective. Every organization must know the degree of its customer satisfaction The key question that must be answered is: How do customers see us?
  •  The internal business perspective. The members of the organization need to focus on those critical internal operations that enable them to deliver their work program. The key question that must be answered is: What must we excel at?  
  • The innovation and learning perspective. An organization's ability to innovate, improve, and learn ties directly to its value as an organization. The key question that must be answered is: How can we continue to improve and create value for our services?  




BSC concept : Components


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