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Implementation of the Balanced Scorecard

Implementation of the Balanced Scorecard

Implementation of the Balanced Scorecard�

The term balanced scorecard became part of professional accounting vernacular in the early 1990�s.
This nontraditional approach to measuring strategic performance was developed by Dr. Robert Kaplan
and Dr. David Norton. As the name implies, the goal of the balanced scorecard is to provide stakeholders
with a balanced view of the performance of an organization. To prepare for this Application, review Case
14-1 �Global Oil� in Chapter 14 of your course text. After reading and analyzing the information

presented, respond to the following:�

The Assignment:�

?Provide a critical analysis of M&R’s implementation of the balanced scorecard, including an identification

of the strengths and weaknesses of the program.�

?Prepare a response to the following: Was the adoption of the balanced scorecard at M&R responsible
for turning around the organization�s financial performance? Explain your answer

Implementation of the Balanced Scorecard 2

The balanced scorecard has been applied by many managers to spearhead performance
measurement tool in view of strategic management to enhance control and performance
improvement. The balanced scorecard (BC) tracks any changes that have been made and
provides a feedback to the management on the systems that have been introduced and their
performance ratings. The basis of the BC is that no single measure can provide clear
performance target but a series of balanced presentations of both financial and operational
measures can result in successful performance of any company. The major perspectives are
financial perspectives, internal business perspectives, customer perspectives and innovation and
learning perspectives (Kaplan & Norton, 1993).
The success of the company cannot be largely attributed to the implementation of the BSC alone.
Other factors like staff motivation and expansion strategies also contributed to the success of the
company. However, the introduction of the one stop center for gas and snacks has contributed
much more to the company than other strategy as its part of the customer perspectives and
innovation and learning perspectives (Kaplan & Norton, 1996).
The initial success of the M & R was largely due to the reorganization of the management’s
major operations and the expansions of the various departments of the organization but most of
the successes were registered when the BSC feedback systems provided a control system for its
performance and identified the weaknesses of the company. Lack of effective coordination and
accountability accounted for the poor performance of the company during its difficult periods.
To conclude, the success of the BSC also depends on other factors as it cannot be successful on

Implementation of the Balanced Scorecard 3
its own. The performance metrics applied in BSC measure the overall performance of a

Implementation of the Balanced Scorecard 4
Kaplan, R.S., Norton, P. (1993) Putting the Balanced Scorecard to Work, Harvard
Business Review, 71 (5), pp. 134–142.
Kaplan, R.S., Norton, P. (1996) Using the Balanced Scorecard as a Strategic Management
System, Harvard Business Review, 74 (1), pp. 75–85.

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