What is Balanced Scorecard

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Understanding the Balanced Scorecard A
Comprehensive Overview
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Introduction to Balanced Scorecard
The Balanced Scorecard is a strategic planning
and management tool that helps organizations
align business activities to the vision and
strategy. It improves internal and external
communications and monitors organizational
performance against strategic goals.
3
History and Development
Developed in the early 1990s by Robert S. Kaplan
and David P. Norton, the Balanced Scorecard
evolved from traditional performance metrics. It
introduced a more comprehensive framework that
includes ?nancial and non-?nancial measures for
better strategic alignment.
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Four Perspectives
The Balanced Scorecard comprises four
perspectives Financial, Customer, Internal
Processes, and Learning Growth. Each
perspective provides a unique view of the
organization, helping to create a balanced
approach to performance management.
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Financial Perspective
The Financial Perspective focuses on ?nancial
objectives and performance indicators. Key
metrics include revenue growth, pro?tability,
and return on investment. This perspective
helps organizations assess their ?nancial health
and strategic success.
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Customer Perspective
The Customer Perspective evaluates how well an
organization meets customer needs and
expectations. Metrics include customer
satisfaction, retention rates, and market
share. This perspective is crucial for
understanding customer value and loyalty.
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Internal Processes Perspective
The Internal Processes Perspective examines the
ef?ciency and effectiveness of internal
operations. It identi?es key processes that drive
organizational success and focuses on improving
them to enhance overall performance.
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Learning and Growth Perspective
The Learning and Growth Perspective emphasizes
the importance of organizational culture,
employee training, and innovation. It measures
the organization's ability to adapt and grow,
ensuring long-term sustainability and success.
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Conclusion
The Balanced Scorecard is a vital tool for
organizations aiming to achieve strategic
alignment and performance excellence. By
integrating multiple perspectives, it fosters a
comprehensive approach to management and helps
organizations navigate complex business
environments.
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