Discussion Week 4

Page 1 of 1 Accounting III

©2017 South University

Balanced Scorecard Balanced Scorecard. The balanced scorecard is an integrated set of performance measurements that ties together knowledge of strategy, processes, activities and operational and strategic performance measures. Balanced scorecard models offer great opportunities and challenges to improve value and performance through better communication, knowledge and incentives. These models translate companies' strategy into performance measures that employees can understand and influence. The balanced scorecard is comprised of four perspectives including financial performance, learning and growth, customers and internal processes. While the balanced scorecard is a beneficial tool, there are a number of pitfalls to be avoided in its implementation. First, the use of too many measures diffuses management's focus and too few measures provide an incomplete picture to implement such a tool. Senior management's full commitment is necessary, support from the top is required for success. Additionally, scorecard responsibilities must filter down to middle managers and lower level workers. Everyone in the organization needs to be onboard. Any attempt to develop the perfect scorecard is likely to end in failure. Instead it should be an evolutionary process. Finally, the balanced scorecard should not be treated as a systems' project. While information is an essential part of the scorecard process, mere automation of data recording and observations does not provide a sound basis for a scorecard.