The scorecard is one tool managers that can provide information for decision-making
purposes. Romney et al. (2014) define a scorecard as a management report that measures
four dimensions of organizational performance: financial, internal operations, innovation
and learning, and customer perspectives.
• Financial – contains lagging indicators of past performance
• Internal operations, innovation and learning, and customer perspectives provide
leading indicators about factors likely to affect future financial performance.
The balanced scorecard is used to communicate what a company is trying to accomplish,
align the day-to-day work with strategy, prioritize projects, products, and services, and
measure and monitor progress toward strategic targets (Balanced Scorecard Institute, n.d.).
• Financial perspective: looks at the organization’s financial performance and the
use of financial resources.
• Customer perspective: looks at the organization’s performance from the
customer’s or stakeholder’s perspective.
• Innovation and learning perspective: looks at human capital, infrastructure,
technology, culture, and other capacities that are key to breakthrough performance
• Internal operations perspective: looks at the quality and efficiency of an
organization’s performance related to the product, services, or other key business
processes.
A balanced scorecard looks at strategic and financial measures to get a more
comprehensive view of the company’s performance. Different scorecards are required for
different market situations, product strategies, and competitive environments (Putting the
Balanced Scorecard to Work, 2015).
References
Balanced Scorecard Institute. (n.d.). Balanced Scorecard Basics. balancedscorecard.org.
Retrieved December 20, 2022, from https://balancedscorecard.org/bsc-basics-
overview/
Putting the Balanced Scorecard to Work. (2015, July 16). Harvard Business Review.
https://hbr.org/1993/09/putting-the-balanced-scorecard-to-work
Romney, M. B., Steinbart, P. J., Summers, S. L., & Wood, D. A. (2020). Accounting
Information
b b b Systems (15th ed.). Pearson Education (US).
https://mbsdirect.vitalsource.com/books
b b /9780135573082
