Balance Scorecard

Balance Scorecard

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Balance Scorecard

A balance score is one of the most used measuring tool in many organizations. It is a strategic performance management framework that help firms to manage and monitor the delivery of their strategy by combining several measures and leading indicators into the following four interconnected perspectives:

Learning and growth perspective

It covers the intangible drivers of future success (Rao & Sreelakshmi, 2017). An organization should ensure that it has enough capital both organizational, informational and human. Human capital include training employees, equipping with enough skills and knowledge as well as promoting a good organizational culture.

Business internal process perspective

This perspective covers the main process of the company and the goals and objectives of the company. An organization should ensure that all the workers are efficient and that all products are supplied on good time. A company should also ensure that it caters for all customers’ objectives.

Customer perspective

A customer perspective is the viewpoint of a customer about an organization. An organization should ensure that all customers are satisfied with the products by supplying quality goods on time and the right amounts. It should also cover customer objective such as market share in target segments.

Financial perspective

It covers the financial objectives of a firm like income and return in equity to monitor financial performance and the value of the shareholders (Rao & Sreelakshmi, 2017). An organization should ensure that all funds are put into good use for the development of the firm.

Other strategies an organization can use

Benchmarking strategy would fit the company’s profile since it will enable it to improve its performance and thus gain a competitive advantage. Benchmarks are used to measure the success of the organization. An organization can conduct either internal or external benchmarks. Internal benchmarking is where a structure unit measures itself with other units in order to evaluate its performance. It facilitates flow of information and structures and thus an organization can adopt various strategies used by others to increase performance. It also motivates the different departments in the firm to perform effectively (Heizer & Barry, 2013). On the other hand, external benchmarking is where a firm measures its personnel performance, financial performance and quality performance against those of other firms. It enables a business to realize its potential and improve its overall performance. Moreover, an organization can use various performance measure and control techniques to improve the company’s profile. The performance measures include: personnel performance, financial performance and quality performance. Financial performance is based on sales and profits incurred. The profits of a local venture are affected by increase or decrease in currency value. If value of currency increases, the sales decrease since the prices of products will increase. Employee’s performance appraisal should be done regularly in order to motivate them to perform more effectively. Performance appraisal can be done by rewarding the employees, promoting them and training them more often so that they can adopt new market strategies and advancements in technologies. On the other hand, total quality management techniques should be applied in a firm. Quality products should reach the markets at the right time and in the right quantities.

More than on strategy will facilitate an organization to pursue a global expansion since the company will be able to evaluate the market as well as its competitors. The strategies will enable an organization to realize its full potential (Heizer & Barry, 2013). The strategies will enable an organization to analyze its strengths and weaknesses and those of the competitors. Through the SWOT analysis, it will realize the strengths it has that the competitors do not, thus maximizing them in order to gain a competitive advantage in the global markets.

In conclusion, for a company to compete globally, it should ensure that it has many strategies that will enable it position itself well in the global markets. An organization should also ensure that it has well laid out plans that will enable it to achieve its goals and objectives.

References

Heizer, R., & Barry, R. (2013). Operation Management Sustainability and Supply Chain Management (Vol. 11). Pearson, UK.

Rao, D. S., & Sreelakshmi, G. (2017). Balance Scorecard Strategy Mapping Tool: A Case Study.