Looking merely at the financial aspects namely the final results will not be able to resolve the challenges faced by an organization.
The balanced scorecard looks at the following four fundamental performance areas of an organization and set major/crucial measures/matrix/key performance indicators for them:-
1. Financial performance
2. Customer satisfaction
3. Internal operations
4. Learning and innovation
By taking such integrated approach, the Balanced Scorecard is able to balance the vision and mission of the organization with everyday operations. In simple term, a strategic scorecard can help an organization identify the few core functions that translate its vision into reality.
Below explain each performance areas with its relevant measures and its purposes:-
FINANCIAL/MARKET MEASURES
- To inform an organization the results of actions already taken and whether those actions are contributing to its bottom line ( see examples of such measures)
CUSTOMER SATISFACTION MEASURES
- To inform an organization how it is performing in the eyes of the customer (see examples of such measures)
INTERNAL PROCESS/OPERATIONAL MEASURES
- To inform an organization about what it must do internally to meet customer and financial expectations. ( see examples of such measures)
LEARNING AND INNOVATION MEASURES
- Inform the organization on its capacity to continually innovate, improve, and sustain itself.(see examples of such measures)
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