After reading the article " The Balanced Scorecard: Measure that drives performance" , answer the following questions:
- Why do the companies need to measure their performances?
- Why was the balanced scorecard introduced to managers as a strategic tool to measure performances?
- Explain how the scorecard works?
- Explain the four core perspective by your own words according to your understanding?
- ( and give example on this )
By applying the balanced scorecard grid, create your personal balanced scorecard. Identify your own four perspectives in studying this semester, your learning outcomes or outcomes, measurement of those outcomes and strategic action plans to achieve the outcomes.
Companies need to measure their performance because it helps them improve performance. Companies need to measure their performance because it helps them understand if they have improved over the previous year, and if the steps taken by them have been effective. It is important to measure performance because it helps companies see the direction in which the company is moving. They want to spot the weak areas so that corrective action can be taken. Companies also want to spot the processes and competencies which are critical and track them over time. Companies also want to measure performance so that they can identify the areas in which the company must excel. They want to measure performance to improve performance. Companies want to measure performance in the areas of creating value for customers, in areas of creating new products and improving operating efficiencies, and how it has supported the interests of shareholders. Companies want to measure their performance to influence the behavior of employees and managers.
This solution explains the balanced scorecard and its key features. The sources used are also included in the solution.