Usefulness of the Balanced Scorecard

2031 words 9 pages
The purpose of this report is to assess the usefulness of the balanced scorecard (BSC) model within a business and strategic management accounting. To acquire such information, the model will be applied to a company and then critiqued giving both the benefits and any practical implications regarding the use of the BSC. The BSC was introduced by Kaplan and Norton (1992) as a new approach to strategic management accounting. ‘The purpose of the balanced scorecard is to guide, control and challenge an entire organisation towards realising a shared conception of the future’ (Chavan, 2009, p398). It involves measurement over four perspectives each defined by Kaplan and Norton (1992, p72) as: ‘Financial – How should we appear to our
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This figure should be maintained or improved upon depending on product releases. A practical implication of the measure is if the figure is looked upon alone. For example if less training is given, does this mean that they are failing at the objectives? It could simply be due to the high skill level of current staff which are improving efficiency without the need for extra training.
The final measure ensures employees are sufficiently motivated and satisfied within their working environments by how attractive the business is as an employer among engineers/economists and also the amount saved from suggestions by employees. Remaining the highest within the automobile market (Universumglobal, 2012) be a goal for the company, to remain as industry leaders.
Benefits of the BSC
The BSC model overcomes limitations of traditional measurement systems that do not include operations taken by managers which increase shareholder value and only include their expenses (Kaplan, 1994). The financial perspective remains a key aspect of the BSC as financial performance measures indicate whether both the strategy and execution are contributing to the business’ monetary position (Kaplan and Norton, 1992). The Customer perspective shows how they are performing in areas such as customer retention. Business processes shows measures that most impact the customer (Kaplan and Norton, 1992), allowing the company to maintain a


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