The balanced scorecard�s (BSC) four focus areas are financial, customer, process, and learning and
growth. The scorecard incorporates measures derived from an organisation�s strategy. Although
retaining financial measures of past performance, the balanced scorecard also introduces the drivers of
future financial performance.
Address the following issues/questions:
Critically evaluate the advantages of using the BSC approach to performance measurement and identify
critical areas in terms of implementation of the BSC. Should public sector or not-for-profit organisations
develop a BSC? Use examples to illustrate your points as well as suitable academic references.
And consider the following questions:
�What are the advantages of using the balanced scorecard?
�What are the critical areas that should be considered in its implementation?
�Should the balanced scorecard be used across different organisations?
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Advantages of using BSC approach to measure performance
The success of any business organization in any given sector entirely depends on how all
stakeholders and employees of the organization work together for the achievement of the
organization’s goals and objectives. The journey towards success starts by the formulation of the
mission, vision, and goals of the organization, which are the driving forces (Hill and Jones
2012). The purpose of an organization is achieved by implementing measures and actions that
will work towards the achievement of organizational goals, continuous assessment, and
improvement of the processes involved. The balanced score card (BSC) is the most efficient tool
which can be used by any given organization for strategic management, measure performance
and mitigate on areas that the organization needs to concentrate on to achieve success. The
strategic vision of any organization requires to be converted into actions that will ensure that the
goals are achieved. The balanced score card provides the lead towards the creation of strategic
actions and strategies to aid in the performance measurement of the actions deployed towards the
achievement of the strategic objectives of the organization (Biazzo and Garengo 2012).
The use of a Balanced Score Card draws huge benefits to any organization and helps the
organization to align its resources towards ensuring the objectives are achieved. The balanced
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score card takes into consideration several perspectives regarding the organization relating to the
financial aspect, targeted customers, processes involved and learning and growth of an
organization and measures how the actions adopted by the organization towards the achievement
of the strategic objectives of the organization (Niven 2010). A balanced score card is critical in
ensuring that performance measures are aligned with the organizational strategy that forms the
purpose of the organization. The balanced score card helps the management of the organization
by pointing out the business operations that need to be adopted and which areas to concentrate
efforts on. Through the strategies contained in the business scorecard communication within an
organization improves and ensures that all the stakeholders of the organization are aware of the
goals and objectives of the organization and clearly understand what they are needed to do.
A balanced score card ensures improved learning and growth in the organization since all
the stakeholders are working towards common goals. Assessment and measurement of
performance of business operations’ outcomes is easier using the balanced score card since it
clearly describes the actions to be adopted by organizations and the expected deliverables
(Biazzo and Garengo 2012). The deployment of a balanced score card in business operations
improves innovation and creativity of the team and guarantees improvement since feedback can
be achieved from the monitoring process and help in the improvement of business operations. A
Balanced score card helps in the achievement of competitive advantage, increased satisfaction
levels and financial growth for profit making organizations (Hill and Jones 2012).
The implementation of a balanced score card takes into consideration the area of
operation and the stakeholders of an organization. The flow of strategies differ in profit making
organizations where the financial perspective is above all the other perspectives since
organizations need to get a return from their investments. In other sectors such as public sector
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and not-for-profit organizations, the satisfaction of the stakeholders including the public and the
donors is the most important perspective (Redburn, et al. 2015). The availability of the required
resources is also critical when implementing the business scorecard. This approach of the
measurement of performance can be used across different organizations since any business
environment involves resources and customers and performance measurement is very critical
regardless of the type of organization (Redburn, et al. 2015).
Works Cited
Biazzo, Stefano, and Patrizia Garengo. Performance Measurement with the Balanced Scorecard:
A Practical Approach to Implementation within SMEs. New York: Springer Science &
Business Media, 2012.
Hill, Charles, and Gareth Jones. Strategic Management: An Integrated Approach. New York:
Cengage Learning, 2012.
Niven, Paul R. Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining
Results. London: John Wiley and Sons, 2010.
Redburn, F Stevens, Robert J. Shea, Terry F. Buss, and David M. Walker. Performance
Management and Budgeting: How Governments Can Learn from Experience. London:
Routledge, 2015.
