ADMIN 630: Financial Management
Essay: Topic #6 - The Balanced Scorecard
Mary Bee
November 30, 1999
Table of Content
Page
Financial Measures……………..………………………………….…4
Measurements…….……………………………………………….….5
New Management Processes…….…………………………………...6
The Sprint Balanced Scorecard…….…………………………...……8
Summary……………………….….……………………….…....…..11
References……………………….….……………………….…....…12
The "Balanced Scorecard" was developed by Kaplan and Norton several years ago as a means for motivating and measuring business unit performance. The Balanced Scorecard allows executives to view a company’s performance from several perspectives simultaneously. It provides a balanced picture of current operating performance as well as the drivers of future performance. The scorecard identifies four key perspectives:
Financial Perspective
Customer Perspective
Internal Business Perspective
Innovation and Learning Perspective.
The Gartner research group projects that at least 40% of Fortune 1000 firms will implement Balanced Scorecards by the year 2000. (BALANCED SCORECARDS- just another fad? By Robert Fabian). Every firm will focus on different Key Performance Indicators (KPI), but all organizations should measure their performance by paying attention to the four perspectives identified above. Many measures in the non-financial groups will depend on financial information, but the emphasis is different. Creating a balanced scorecard requires translating a company's strategy and mission statement into specific goals and measures. Managers then track those meas ...