Question

Balance Scorecard

A balanced scorecard is an integrated system of performance measures designed to support an organization’s strategy. The various measures in a balanced scorecard should be linked on a plausible cause-and-effect basis from the very lowest level up through the organization’s ultimate objectives. The balanced scorecard is essentially a theory about how specific actions taken by various people in the organization will further the organization’s objectives. The theory should be viewed as tentative and subject to change if the actions do not, in fact, result in improvements in the organization’s financial and other goals. If the theory changes, then the performance measures on the balanced scorecard should also change. The balanced scorecard is a dynamic measurement system that evolves as an organization learns more about what works and what doesn’t work and refines its strategy accordingly.

Why do the measures used in a balanced scorecard differ from company to company?

Why does the balanced scorecard include financial performance measures as well as measures of how well internal business processes are doing?

Write a brief statement that expresses your thoughts on performance analysis.

Answer 1

Why do the measures used in a balanced scorecard differ from company to company?

Ans: A Balance Scorecard differs from one company to another company because there the day to day operations of one company differs with another company. It is the management who implements the balance scorecard in the organisation/ company. The perception or ideology of one company is different when compared to another company's management.

Why does the balanced scorecard include financial performance measures as well as measures of how well internal business processes are doing?

Ans: The Balance Scorecard is a Organization's management system. The Balance scorecard corelates or links the company's strategic objectives to the performance measures like financial measures & internal business performance. The Company's balance scorecard is a performance measured which will be used in strategic management io identify and improve various internal business processes.

Write a brief statement that expresses your thoughts on performance analysis

Ans: Performance analysis is the process of identifying Organisation's strenghts & weakness by properly establishing the relationship between the financial transactions and business decisions. Performance analysis helps in short run forecasting and long run forecasting which hepls organisation to run in growth way. Performance analysis hepls the entity in business planning process by forecasting revenues, expenditures and net profits for the comming financial year. Generally the performance analysis is a combination of internal business processes, systems, ideology of management which was used by company to manage its resources in order to acheive the company's long term goals and short term goals. Performance analysis generally consist of planning, forecasting, budgeting e.t.c., Performance analysis helps in identifying the strengths and weakness of the organization.