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Indicator
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The Balanced Scorecard –
Indicators/Measures/Controls
Balanced Scorecard measure the company’s
performance on following four grounds/aspects
SIMULTENEOUSLY
1. Innovation & Learning Aspect– Skill
Enhancement, Process
improvement
2. Internal Business Aspect– New Processes,
New Products, Cycle time
3. Customer Aspect – Customer Retention,
Customer satisfaction index.
4. Financial Aspect – Profit margins, ROA, Cash
Flow
BS incorporates all significant controls in one frame.
That’s why this control tool is called BALANCED.
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The Balanced Scorecard - Indicators
FINANCIAL
STRENGTH
Product Profitability,
EBIT
CUSTOMER SATISFACTION
Market Share, Survey Scores, Complaints
ORGANIZATIONAL LEARNING
Training Time, Turnover, Staff Satisfaction Score
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The Balanced Scorecard –
Measures/Indicators categorized as
New
Skill Processes
Enhanceme
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The Balanced Scorecard –
Why Called balanced?
Examples-
Customer
R& D New product retention Assured
Achieveme line (gets market share
nt hooked to
10/17/08 hmahesh45@yahoo.com; VIM Pune 11
the Co).
The Balanced Scorecard –
Essential Factors -
It should includes all critical factors of organization’s
strategy.
Show relationships among measures in cause- effect
manner.
Provide a broad base view of the Company.
It should address different stakeholders of the
Co.
Clearly specify Driver and Outcome measures and
relationship between them.
Give due consideration to balance of Internal and
External measures
BSC must be strategy specific i.e. organization
specific.
Measures must be linked from top to bottom and
must
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be tiedhmahesh45@yahoo.com;
to responsibility VIM Pune
center 12
Balanced Scorecard – to sum up……..
“ Balance Scorecard is
a management system
rather than mere
a measurement system
which enables organization
to clarify its vision and strategy
and translate it into action.”