What can be learnt from the Balanced Scorecard

What can be learnt from the Balanced Scorecard?

The Balanced Scorecard as an issue taught in the field of Industrial Engineering and have attempted to identify the overall satisfaction gained by the adoption of BSC in  several areas. In doing so, it has first identified BSC based on its implementation from the beginning. BSC is a tool introduced by Kaplan and Norton back in 1992. The paper has first identified the BSC on different generations based on its focus and performance. Accordingly, in the first generation BSC mainly focused on the 4 perspectives mentioned earlier in this paper, in the second generation BSC has been used as a management system focusing on strategic objectives, in the third generation it has focused on a new element called ‘Destination Statement” which is more similar to a vision statement of a company and in the fourth generation it has focused on  the business environment in making decisions in risk and uncertain environments, social  and environmental impact, etc..

 The study has revealed that it has been used increasingly in several fields such as supply chain management, research and development, e-business, e-commerce, project management, Enterprise Resource Planning Systems(ERPS), etc… Not only the usage it has also revealed satisfying results in terms of revenue growth, increased profitability, cost cutting, productivity improvement, increased market share and the like.One of the most important findings from the paper are more organizations than ever before are successfully using their BSC as a strategic management tool and there is a steady shift towards the use of modern'3rd Generation' designs.

Based on the findings of the paper it has been revealed that BSC model is considered as a more appropriate research model for the evaluation of performance and translating an organization’s strategic objectives into a set of performance indicators. Further it is revealed that the BSC is intended not only as a strategic measurement system but also as a strategic control system which can align departmental and personal goals to overall strategy. Therefore by these findings we can learn that BSC is a tool which can be used increasingly as a model for evaluating performance, e.g by the use of financial perspective financial performance can be measured in terms of criteria such as the quarterly revenue, growth, operating income by division, increase in market share, increase in Return on Equity (ROI) and the like. These measures will ensure the success of the organization and survival of the business while enabling to attain the personal goals as well. In the same way measures that can be considered under the customer perspective are percentage sales from new products, on time delivery, ranking by key accounts, etc.. These can be used to attain the customer oriented goals. Measures to be considered under the internal business perspective are cycle time, unit cost, yield, engineering efficiency, etc.. They will ensure attaining the goals of technological capability, manufacturing excellence and design productivity. Under the learning and growth perspective time to develop next generation, process time to maturity and percentage of products equaling 80% of sales can be considered as measures and they can be used in achieving goals such as technology leadership, manufacturing learning and product focus. Likewise, BSC can be used as a strategic measurement system but also as a strategic control system which can align departmental and personal goals to overall strategy.