Balanced Scorecard

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The balance scorecard first came to prominence in the early 1990's. Dr Robert Kaplan and Dr David Norton of the Harvard Business School developed this system of performance management measurement. It is an approach to performance measurement that combines traditional financial measures with non-financial measures. This approach provides managers with richer and more relevant information about the activities they are managing, increasing the likelihood of organizational objectives being achieved.

As opposed to Return on capital employed, the balanced scorecard didn't just focus on the financial perspective. The balanced scorecard aims to have a balance over the four areas rather than one area being much more focused upon "The BSC (Balanced Scorecard) divides the business environment into four key business areas" (Hepworth 1998) , e.g. a business putting most of their efforts into trying to gain short term profit.
One of the main advantages of the Balanced Scorecard is considered to be the opinion that it allows managers to view levels of performance all over an organization at the same time "Primarily, the "balanced scorecard" gives managers the ability to view performance in several areas simultaneously" (Kippenberger 1996).
The Balanced Scorecard tends to focus more on critical performance indicators and missing out what can be considered less important ...