Balance Scorecard In The Workplace

Balance Scorecard

The balance scorecard has been created in 1992 by Robert Kaplan and David Norton to know the level of achievement both on a financial and non-financial basis. This leads to a more balanced perspective by directors and owners as it facilitates the monitoring of achievements towards the company’s objectives.

Since then, the balance scorecard is being utilized by all companies (Private, Public as well as Non-Governmental Organizations). It is a strategic planning and management system (http://balancedscorecard.org/Resources/About-the-Balanced-Scorecard) that enables firms to be in line with all the activities within the company. Furthermore, it helps to improve communications both internally and externally and to supervise the

Internal Business Process: An approach to ensure that clients and stakeholders are convinced based on several trade developments.

4. Learning and Innovation: An approach that build up an environment which helps expansion, modernization and development.

Developing Balance Scorecard in the Workplace

As defined above, the balance scorecard is a strategic planning and management system created to help managers to be in line with all the activities held in the company. In addition, it also provides an effective communication process and the monitoring of the organization’s performance and achievements.

Thus, a balance scorecard is indeed an important tool which any company or industry should consider.

For example, considering automobile company which is in the production sector, the balance scorecard will be effective in cases as described below.

 Financial

 Target Cost Achievement

Throughout the stage of construction, there can be an impact on the cost by 82%. Furthermore, throughout the assembling stage, only 23% of the expenses can be changed, creating a waste of resources. Thus, establishing a target cost while working together with suppliers to reach this target is an important financial part for an automobile

Thus, cost reduction should be done throughout the process of production and to make sure that all costs are identifiable.

 Outsourcing/ Supplier risk

While outsourcing incidental activities, it surely decreases cost but simultaneously increases uncertainty. If ever activities are outsourced to suppliers, and the latter is not completing his part of work as required, the company’s image will be tarnished and not the supplier. Thus, in the balance scorecard, risk management is vital.

 Learning and Innovation

 Intellectual Capital

When experienced labor leaves the company, it is viewed as a loss. Thus, companies should measure these experiences and use it to a maximum advantage before it moves out of the company.

 Innovation

To be able to earn higher revenue and face competitors, companies should improve production, delivery method, or even by creating new vehicle or improve the version of previous vehicle. Thus, it is essential to measure how rapidly innovation ideas can be converted into