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Contents
3LITTERATURE REVIEW
Introduction 3
The Cause and Effect Relationship 3
LITTERATURE REVIEW 4
Criticism 4
Modified Balanced Scorecards 4
BOSTON LYRIC OPERA CASE STUDY 5
Limitations (first draft, only bullet points for the moment) 5
CRITICISM OF THE BALANCE SCORECARD 6
Top-down implementation 6
Managers responsibility in the implementation 6
The BSC fails to capture complexity 6
Adaptability 7
Time factor 7
Cost and efficiency 7
Conclusion 7
RECOMMENDATIONS 8
Extra Perspectives 8
Cause-and-Effect Relationship 8
Activity Based Costing, ABC-BSC 8
BIBLIOGRAPHY 9
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LITTERATURE REVIEW
Introduction
The Balanced Scorecard is a strategic management tool that combines four performance perspectives, acquiring a broad based picture of performance (Kaplan/Norton, 1992).
traditional financial metrics (return on investment)
customer-based metrics
internal-operations metrics
growth and learning metrics
The concept of Strategy Maps emerged to supplement the BSC (Kaplan/Norton, 2004), establishing strategies that are translated into quantifiable metrics in the BSC.
Balanced scorecard
Português: Indicadores do Balanced Scorecard
Figure 1The Cause and Effect Relationship
The BSC represents the 'cause-and-effect' relationship between an organisations long term strategic objectives and quantifiable KPI's (Key Performance Indicators) (Kaplan/Norton, 2006). It is often difficult to focus on many different measures, taken separately. Metrics drawn from a cohesive strategy however work in tandem. Companies should concentrate on the internal and learning & growth perspectives, these actions will translate into enhanced performance in customer and financial outcome measures due to the "cause-and-effect relationship" (Kaplan/Norton, 2004).
Figure 1 (Kaplan & Norton, 2006)
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LITTERATURE REVIEW
Criticism
The BSC is one of the most successful performance control mechanisms, in 1998 it was used by approximately 600 of the Fortune 1000 companies in the US and Europe (Linna/Seal, 2009). However its effectiveness and appropriateness is often questioned. Often employees see the implementation of BSC programmes as time-consuming and ineffective. The scorecard is often "unbalanced" giving to...