Accounting For Managers Essay Sample
The balanced scorecard is a System in the management used by organizations worldwide to help them translate their mission, vision and strategy into action. When fully integrated, the balanced scorecard changes the strategic plans from a simple exercise in an operational management system (Kaplan, Robert and David). The scorecard helps an organization if it is used in the day to day activities. In addition, the balanced scorecard will give a detailed report on how the organization is performing. This information gathered will help the organization to know the weaknesses and drawback in the activities of the organization. Hence, the weak points can be dealt with separately as the balanced scorecard continues to be implemented.
According to David and Fred, the balanced scorecard is used as a management tool to implement an organization strategy into action. The scorecard provides a framework and guideline on how to realize the company set policy and how the established strategies are performing after implementation. This further provided the organization with accurate information on whether the organization will accomplish their goals as stipulated (David and Fred, 2005). The scorecard measured are used for better decision-making based on the accomplishments and results. In addition,, the data collected can be used to evaluate how the firm is performing financially, operation efficiency, customer results, and the organization capacity expand into new regions. The information can provide detailed reports that are easy to understand and aid in the overall decision making of the company
The balanced scorecard uses four perspectives to view an organization's performance and to develop ways of collecting data and analyze in relation to the views. Most companies set different strategies with each using a unique way to achieve the objectives. Companies set deliverables on how to implement the scorecard, hence each has its unique way of collecting, handling and measuring performance. The managers set most of the strategies of any companies; hence, the scorecard implementation requires the authorization of the managers. For the strategies to be achieved through the scorecard, the management should involve everyone in the decision and implementation process.
A top to bottom approach is more advisable as those who execute the strategies are to be informed. For any strategy to succeed, all information regarding the policy and the critical objectives is to be made available to everyone. The scorecard will focus on the creation and communicating a comprehensive picture of the members (Nair and Mohan, 2004) Members will make use of the knowledge gained through experience, new technology and maintaining the required flexibility of the system to cope with the changing business environment. A balanced scorecard is used to achieve set strategies and goals of an organization. An organization first needs to identify key strategic plans for the firm to make the strategies. The organization needs to assess the mission and vision, challenges and values. In addition, prepare for any possibility of a change in the management plan and conducting a communication workshop for key components. The next step is creating strategies and objectives of the company based on customer values, strategic results, and the strategic action elements. Further, performance measures, initiatives and performance analysis are conducted through the provision of detailed reporting and knowledge sharing. After all the processes and reports are concluded and revised, the organization evaluates the results and provides a decision that will suit the firm (Nair & Mohan 2004).
The team will also review the strategies and the balanced scorecard for any future amendments. Most companies created their objectives based on financial target and short term goals that left them exposed to the ever-changing business environment. The balanced scorecard offers a long term approach to strategy development and implementation. For a company to successfully implement a balanced scorecard, proper arrangement should be made not to overlook any possibility of failure. A balanced scorecard should not only address the financial concerns of any company, but also look at the internal and external business processes, and learning and growth.
David, Fred R. Strategic Management: Concepts and Cases. 10th ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2005. Print.
Kaplan, Robert S., and David P. Norton. The Strategy-focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Boston, Mass.: Harvard Business School, 2001. Print.
Nair, Mohan. Essentials of Balanced Scorecard. Hoboken, N.J.: John Wiley & Sons, 2004. Print.