Are you looking to find out what is a balanced scorecard? With a little research, you can easily find out how different definitions cover the notion of BSC. In this article, you`ll find some of the definitions describing how balanced scorecard works.
The trend of mission and vision integration in strategic management models continued to anchor the vision statement of the Balanced Scorecard concept. Kaplan and Norton placed the Balanced Scorecard in the center of vision and strategy development. For the relation between the BSC concept and the mission statement/vision to be facilitated, an approach of organizational purpose was born in practice.
The dynamic usage of mission and vision statements has changed over time, not including the practice of using their tool to facilitate connection with other concepts. Balanced Scorecard is an example included in this fact.
A unique feature of the Balanced Scorecard concept is its evolutionary nature, knowing a continuous transformation since its launch. Let us try to answer the question “What is a balanced scorecard?”. It`s a challenge, considering the fact that the way how the concept is defined varies from one author to another. The simplest way is to refer to BSC as a tool, viewed from several perspectives: a complex management tool or a strategic management tool.
The BSC concept represents more than a performance measurement technique, being considered fast enough by some authors as a management system. To contribute to confusion, some authors prefer to use both meanings simultaneously.
Other authors consider the Balanced Scorecard as a management philosophy and a performance management system as well.
Although it`s natural the existence of several definitions for the concepts of management, dedicated BSC literature goes further. The concept is defined not only as different meanings, but it is presented and perceived in different ways. There are entire articles that analyze and promote the use of Balanced Scorecard as a performance measurement tool, the system of performance management or strategic management and control system. Very interesting is the fact that these articles don`t follow a certain evolution in time and a certain pattern, like the article written by Kaplan and Norton, but these contents have been published in different times.
The following definitions of the Balanced Scorecard provide a comprehensive view of the concept, reflecting different perspectives:
Kaplan and Norton`s opinion admit that Balanced scorecard retains traditional financial indicators. But financial indicators reflect past events, an approach was suitable for industrial companies, where their investments in sustainable capabilities and customers relationship are crucial in obtaining success. However, these financial indicators are inadequate for guiding and evaluating the effort that companies from the informational age must make it to create future value through investment in customers, suppliers, employees, processes, technology and innovation.
Other authors admit the fact that the balanced scorecard means a tool that translates the organization`s mission and strategy into a set of understandable performance indicators that provides the framework for the strategic measurement and performance management.
If this information is still not enough, make a deeper research and you can be happy due to understanding what is a balanced scorecard.