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KEY CONCEPT EXCERISE WEEK 8

Introduction
BSC is a management system and has emerged as a decision support
tool at the strategic management level (Martinsons, Davison and Tse,
1999). Nowadays, manages evaluate their organization performance
through linking the operational and non-financial corporate activities with
causal chains to the firms long-term strategy (Figge et al., 2002)

. The BSC is a tool which provides both hard and soft performance measures for
both non-profit and business organizations (Ahmad and Hasnu, 2013)
Implementation of BSC
A BSC starts with identifying strategies derived from organizations vision and
mission. Then, these themes are developed by evaluating the vision and mission
statement from four dimensions which is shown in the below diagram as below;

Adopted from Robert S. Kaplan and David P. Norton, Using the balanced scorecard as strategic
management Harvard Business Review (Kaplan and Norton, 1996)

From the above diagram, four perspectives are highlighted as below;

Financial; supports the strategy of business explanations, profitability and

the risk for the owner of shareholders and owners. This perspective can be
measured by considering measures; operating profit, revenue growth and
revenues from the new or modified products etc. (Martinsons, Davison
and Tse, 1999).

Customers; it trace customers satisfaction on the company performance

through what it delivers to them. This can be measured through the
market shares, customer retention percentage and time taken to meet
customers request.

Internal business process; it derives the operation or process needed to

meet customer satisfaction on delivering products or servicing

Learning and growth; concerns on how organization train its employees,

gain knowledge and maintain its competitive advantage taking in
consideration the dynamicity of the market environment (Ronchetti, 2006).

Accordingly, each perspective should be considered in regards to the following

factors.
In regards to define and evaluate the four perspectives, following factors are
considered

Objectives; it represents an organization objectives such as market growth

and profitability

Measures; in regards to the objectives, measures will be chosen to asses an

organizations progress to achieve its objectives

Targets; this can be defined as the targets have been placed in order to

achieve measures.
Initiative; Actions that should be taken to achieve the objectives

Advantages of BSC
The implementation of BSC has increased due its rational process and clarity .
Therefore it has become a management strategy, which can be used across
various sectors within an organization.
The BSC approach is a performance measure, which combines the
financial and nonfinancial measures to provide the managers with a
comprehensive report about the activities that they are managing.
Accordingly BSC approach adds a value to an organization due to the
followings;
1. It combines the financial and non-financial measures.
2. Concentrates on the process not metrics like most companies
hold most of their capital in intangible assets as training and
motivating the employees
3. It translates an organizations vision and mission in to
measurable goals through which it can measure the performance
against these goals

4. It helps in raising the consciousness, and knowledge about the

operation process in which it can help to tackle the bottleneck
process and improve it.
In conclusion, I do encourage for the implementation of BSC across
different organization due to its effectiveness in providing the full
picture of the current status of an organization and taking actions on
the lag activities where improvement should be done. Therefore,
implementing BSC in my organization will assist the management to
mainly concentrate on the four perspectives and narrow its strategy in
order

to

be

adjusted

to

BSC

perspectives.

Accordingly,

the

implementation of BSC will be effective based on how successful an

organization can relate its strategy to BSC perspective. The ability of
BSC to combine an organization financial and non-financial factors
enable an organization to achieve competitive advantage and to be
adapted to the dynamicity of todays business environment

Bibliography
Ahmad, S. T. and Hasnu, S. A. F. (2013) 'Balanced Scorecard
Implementation: Case Study of COMSATS Abbottabad, Pakistan',
google. Available from: http://www.sciencepub.net/researcher
Department of Management Sciences, COMSATS Institute of
Information Technology, Abbottabad, Pakistan.: (Accessed: 4 october
2015). pp.88-91.
Figge, F., Hahn, T., Schaltegger, S. and Wagner, M. (2002) 'The
sustainability balanced scorecardlinking sustainability management to

business strategy', Business strategy and the Environment, 11 (5),

(Accessed: 4 October 2015). pp.269-84.
Kaplan, R. S. and Norton, D. P. (1996) 'Using the Balanced Scorecard as
a Strategic Management System', Harv.Bus.Rev., 74 (1), (Accessed: 4
October 2015). pp.75-85.
Martinsons, M., Davison, R. and Tse, D. (1999) 'The balanced scorecard:
a foundation for the strategic management of information systems',
Decis.Support Syst., 25 (1), (Accessed: 4 October 2015). pp.71-88.
Ronchetti, J. L. (2006) 'An integrated Balanced Scorecard strategic
planning model for nonprofit organizations', Journal of practical
consulting, 1 (1), scholar google [Online]. (Accessed: 4 October 2015).
pp.25-35.