Monday, 1 October 2012

A discussion on "balance" in balance scorecard

In  my lecture, I explained that "a balanced scorecard  (BSC) is a scorecard which is balanced". Below is a study note on the notion of balance in balaneced scorecard, based on Soderberg et al. (2011):


  1. The three structural elements of BSC
    • its measures are derived from strategy
    • there is a balance among measures
    • the measures are causally linked
  2. Two "use" elements of BSC:
    • double-loop learning
    • tie-in to compensation
  3. BSC classification scheme based on point 1 and 2:


    4.  Expected benefits of using BSC
    • improve alignment of strategic objectives with strategy
    • foster stronger consideration of non-financial drivers of performance
    • develop a consistent system of objectives in the company
    • support shareholder value-based management system
    • improve company's long-term results





Reference
Soderberg, M., Kalagnanam, S., Sheehan, N.T. and Vaidyanathan, G. (2011) "When is a balanced scorecard a balanced scorecard? International Journal of Productivity and Performance Management Vol. 60(7), pp. 688-708.

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