Balanced scorecards pay close attention on the marketing, financial, operational and process-oriented inputs that need to be evaluated for an effective strategy to be arrived at. It is one of the most effective means through which businesses harmonize both short-term and long term interests. Currently, this approach is being used to determine what businesses stand to gain or lose as a result of employing gas-emission reduction strategies.
This is how a balanced scorecard works: Every business needs to be keen on its financial standing. Financial outputs determine many business decisions. The market share of the business ought to be closely monitored. Any activity that reduces the market share of the business is destined for losses.
Any organization ought to do anything under the sun to bring about growth and therefore an increase in its financial standing. But the problem is that financial strength alone is not enough if there is no sustainability. This where the issue of balance comes in. every action that the business community engages in should not jeopardize its existence in the long run.
Since the introduction of the scorecard line of entrepreneurial thinking, many people have started theorizing on the matter through numerous economic journals. It has become a very strong force when it comes to evaluating the strategies used in implementing business decisions. Through balanced scorecard implementation frameworks, it is easier for unworkable objectives while it is not too late to do anything.
Since the introduction of this line of thinking, there has more emphasis on balanced scorecard implementation through design work. This is in contrast with what happened during the last decade, when most of what went on revolved around only branding. Many strides have therefore been made since the first article concerning balanced scorecard appeared in a journal.
There are four processes involved in scorecard implementation. The first one is translation of vision into goals that are ready to be taken through the operational process. The second process is communication of the vision and the process of linking to performance indices of individuals.
Thirdly, there is need for a business planning as well as setting up of an index initiative. Lastly, the feedback that is received is very useful. It is through feedback that the best paths are charted and incorrect ones abandoned.
Many books that revolve around balanced scorecards often bring about a very subtle confusion between the design elements and the elements of the scorecard itself. A strategy map is not the same thing as a scorecard. A model that links various strategies is not a scorecard either.
The scorecard aids in the formation of a sustainable strategy. It does not act as a process instruction manual for a certain business end. In fact, scorecards are always designed in a way that that they can co-exist with the existing business management strategies and tools of operation. For the sake of simplicity, scorecards that were being used initially were in the form of a table. Each section in the table came with various titles that formed the pillar of the balanced scorecard.
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