The balanced scorecard is a quick way for the top levels to get a comprehensive overview of
how the company is preforming. This measurement device includes financial measures to
illustrate actions the company has used and currently using while also giving a view of the
operational side. The operation side of the balance scorecards looks at customer satisfaction,
internal control processes, and areas the company is looking at improving. One of the key
features of the balance scorecard is it allows executives to look at the company from four
perspectives. These different perspectives are financial, internal business, innovation, and
customer. With these four perspectives managers can focus on critical measures which allows
them to pinpoint areas that need to be improved or areas that they are doing well. Using the
balanced scorecard eliminates the overflow of trying to analyze large amounts of data or having
to reviewing areas that are not needed. For example, if management is trying to improve
internal controls, they should not have to ask what the customer perspective might be on doing
so if the customer has no impact or has anything to do with this control. Mainly, the balance
scorecard lets managers review their processes to make sure that improvements or
advancements in areas do not harm or reduce productivity in another. This means that multiple
areas can be reviewed in one report which allows for a cohesive review.
Reference:
The balanced scorecard-measures that drive performance. Harvard Business Review.
(2021, November 22). Retrieved January 1, 2023, from https://hbr.org/1992/01/the-
balanced-scorecard-measures-that-drive-performance-2
