Q.7. (A) Explain The Concept of "Balance Score Card". A N S - The Balance Score Card Is A Management System (Not Only A Measurement System) That
Q.7. (A) Explain The Concept of "Balance Score Card". A N S - The Balance Score Card Is A Management System (Not Only A Measurement System) That
Q.7. (A) Explain The Concept of "Balance Score Card". A N S - The Balance Score Card Is A Management System (Not Only A Measurement System) That
Ans - The balance score card is a management system (not only a measurement system) that
capable organization to clarity their vision and strategy and translate them into action. It
provides feedback around both the internal business processes and external outcomes in order
to continuously improve strategic performance and results. When fully deployed, the balance
scorecard transforms strategic planning from an academic exercise into the never center of an
enterprise.
Kaplan and Norton describe the innovation of the balanced scorecard: “The
balance scorecard retains traditional financial measures. But financial measures tell the story
of the past events; an adequate story for industrial age companies for which investments in
long-term capabilities and customer relationships were not critical for success. These
financial measures are inadequate, however, for guiding and evaluating the journey that
information age companies must make to create future value through investment in
customers, suppliers, employees, processes, technology, and innovation.”
The balanced scorecard fosters a balance among different strategic measures in an effort to
achieve goal congruence, thus encouraging employees to act in the organization’s best
interest. It is a tool that helps the company’s focus, improves communication, sets
organization objectives, and provides feedback on strategy.
Ans - The balance score card implement in an organization from four perspectives, and to
develop metrics, collected data and analyze it relative to each of these perspectives:
o The learning and growth perspective
o The Business process perspective
o The Customer perspective
o The Financial perspective
This perspective includes employee training and corporate culture attitudes related to
both individual and corporate self-improvement. In a knowledge-worker organization, people
—the only repository of knowledge—are the main resource. In the current climate of rapid
technological change, it is becoming necessary for knowledge worker to in a continuous
learning mode. Government agencies often
Find themselves unable to hire new technical workers and at the same time is showing a
decline in training of brain drain that must be reversed. Metrics can be put into place to guide
managers in focusing training where they can help the most.
In any case, learning and growth constitute essential foundation for success of any
Knowledge-worker organization.
This perspective refers to internal business process. Metrics based on this perspective
allow the managers know how well their business is running, whether its products and
services conform to customer requirements. These metrics have to be carefully designed by
those who know these processes most intimately; with our unique missions these are not
something that can be developed by outside consultants. In addition to the strategic
management process, two kinds of business processes may be identified: a) mission-oriented
processes, and b) support processes. Mission oriented processes are special functions
government offices, and many unique problems are encountered in these processes. The
support processes are more repetitive in nature.
Kaplan and Norton do not disregard the traditional need for financial data. Timely
and accurate funding data will always be priority, and manager will do whatever
necessary to provide it. In fact, often there is more than enough handing and processing of
financial data. With the implementation of a corporate database, it is hoped that more of
the processing can be centralized and automated. But the point is that the current emphasis
on financial needs to the”unbalanced” situation with regard to other perspectives.
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The balanced scorecard suggests that we view the organization from four perspectives and to
develop matrics collect data and analyze it relative to each of these perspective
The Learning and Growth Perspective
The Business Process Perspective
The Customer Perspective
The financial Perspective
This perspective includes employee training and corporate cultural attitudes related to both
individual and corporate self-improvement. In a knowledge-worker organization, people- the
only repository of knowledge- are the main resource. In the current climate of rapid
technological change, it is becoming necessary for knowledge workers to be in a continuous
learning mode. Government agencies often find themselves unable to hire new technical
worker and at the same time is showing a decline in a training of existing employees. This is
a leading indicato of brain drain that must be reversed. Metrics can be put into place to
guide managers in focusing training funds where they can help the most. In any case, learning
and growth constitute the essential foundation for success of any knowledge- worker
organization.
Kaplan and Norton emphasize that ‘learning’ is more than ‘training’, it also includes things
like ‘nentors and tutors within the organization, as well as that ease of communication among
workers that allows them to readily get help on a problem when it is needed. It also includes
technological tools; what the Baldrige criteria call “high performance work systems “ One of
these, the Intranet, will be examined in detail later in this document.
This perspective refers to internal business processes. Metrics based on this perspective
allow the managers to know how well their business is running and whether its products and
services conform to customer requirements (the mission). These metrics have tobe carefully
designed by those who know these processes most intimately, within our unique missions
these are not something that can be developed by outside customers.
In addition to the strategic management process, two kinds of business processes may be
identified a) mission-oriented processes, and b) support processes. Mission-oriented
processes are the special functions of government officers, and many unique problems are
encountered in these processes. This support processes are more repetitive in nature.
There is perhaps a need to include additional financial-related data, such as risk assessment
and cost-benefit data, in this category.