A Balance Scorecard
The approach of a balance scorecard in achieving strategic objectives in organisation.
Introduction:
In current upsurge in economic condition globally brought on by competition and uncertainty, all organisations are impacted with need for changes to remain viable in performance of duties. This trend have prompt companies in adopting suitable approach which are unique to its operation and thus being effective in achieving goals objectives and prospect for development. The development of the balance scorecard has become an approach adopted in an organisation operation. It originated as a performance measurement framework that added strategic non-financial performance measures to previous practices of using financial measures for supporting management in arriving at a balanced view of organization performance. It’s framework primarily focus on strategic planning in business, industry, government, and non-profit organisation worldwide by evaluating factors which are most important to improve internal and external communications with customers and align with their prospective goals. In this effort company would be able to increase revenue, cut internal cost and maximise full use of its resources. Generally, four frameworks are approach to which performance is derived for strategic planning in an organisation as mention.
♦ Financial Perspectives:
This coincides with performance measures such as earning per share, return on capital and return on interest which are used to evaluate the strategic approach by the company or organisation concern. This perspectives evaluates whether the strategic performance measures used by the company in other perspectives is contributing towards objectives of the company in term of maximizing shareholders value of increase revenue and growth in the company. For this justification to be made, management would assess the cost involve to the return on investment. For example, the types of response that might be taken in
Introduction:
In current upsurge in economic condition globally brought on by competition and uncertainty, all organisations are impacted with need for changes to remain viable in performance of duties. This trend have prompt companies in adopting suitable approach which are unique to its operation and thus being effective in achieving goals objectives and prospect for development. The development of the balance scorecard has become an approach adopted in an organisation operation. It originated as a performance measurement framework that added strategic non-financial performance measures to previous practices of using financial measures for supporting management in arriving at a balanced view of organization performance. It’s framework primarily focus on strategic planning in business, industry, government, and non-profit organisation worldwide by evaluating factors which are most important to improve internal and external communications with customers and align with their prospective goals. In this effort company would be able to increase revenue, cut internal cost and maximise full use of its resources. Generally, four frameworks are approach to which performance is derived for strategic planning in an organisation as mention.
♦ Financial Perspectives:
This coincides with performance measures such as earning per share, return on capital and return on interest which are used to evaluate the strategic approach by the company or organisation concern. This perspectives evaluates whether the strategic performance measures used by the company in other perspectives is contributing towards objectives of the company in term of maximizing shareholders value of increase revenue and growth in the company. For this justification to be made, management would assess the cost involve to the return on investment. For example, the types of response that might be taken in
References: (3) Hoque, Zahirul. (2003) Strategic Management Accounting: Concepts, Processes and Issues.2nd Edition.London (4) Horngren, T.C et al (2002) Management and Cost Accounting. 2nd Edition. Pearson Education Limited.Edinburgh Gate .Ft Prentice Hall (5) Horngren, T.C et al (2000) Cost Accounting. A Managerial Emphasis.10th Edition. New Jersey, U.S.A (6) Horngren, T.C et al (2005) Management and Cost Accounting Nonprofit Agencies. New Jersey. John Wiley and Sons (8) Grant,M.R.(2005) Contemporary Strategy Analysis: Concepts, Techniques and Application.4th Edition. United KindomTJ International Ltd (9) Jones,R.R and Hill, L.W.(2004) Strategy Management: An Integrated (10) Jones,R.R and Hill, L.W.(2001) Strategy Management: An Integrated Approach.5th Edition (11) Martin, F and Thompson, J.(2005) Strategy Management: Awareness and Change