Balanced Scorecard was developed by Robert S Kaplan & David Norton. It seeks to do away with undue emphasis on short term financial objectives & seeks to enhance organisational performance by focusing on measuring & managing a wide range of non financial, operational objectives

1. Balanced Scorecard ApproachBalanced Scorecard Approach
• Balanced Scorecard was developed by Robert SBalanced Scorecard was developed by Robert S
Kaplan & David Norton. It seeks to do away withKaplan & David Norton. It seeks to do away with
undue emphasis on short term financialundue emphasis on short term financial
objectives & seeks to enhance organisationalobjectives & seeks to enhance organisational
performance by focusing on measuring &performance by focusing on measuring &
managing a wide range of non financial,managing a wide range of non financial,
operational objectives. Later the system wasoperational objectives. Later the system was
enlarged & now the financial objectives are alsoenlarged & now the financial objectives are also
a part of it.a part of it.

2. Financial Perspective
Objectives Targets
Objectives Targets Objectives Targets
Objectives Targets
Customer Perspective Internal Process
Perspective
Learning/Innovation
Perspective
Vision & Strategy
Balanced Scorecard Model

3. • Financial Perspective – This perspectiveFinancial Perspective – This perspective
considers the financial measures arisingconsiders the financial measures arising
from the strategic intent of thefrom the strategic intent of the
organisation. Examples are revenues,organisation. Examples are revenues,
earnings, return on capital & cash flow. Toearnings, return on capital & cash flow. To
be more precise it is How do we look tobe more precise it is How do we look to
shareholders?shareholders?

4. • Internal Business Perspective – InternalInternal Business Perspective – Internal
business processes are the mechanismbusiness processes are the mechanism
through which performance expectationsthrough which performance expectations
are achieved. To meet the organisationalare achieved. To meet the organisational
objectives & customer expectations,objectives & customer expectations,
organisations must identify the keyorganisations must identify the key
business processes at which they mustbusiness processes at which they must
excel.excel.

5. • Customers’ Perspective – This perspectiveCustomers’ Perspective – This perspective
measures the ability of the organisation tomeasures the ability of the organisation to
provide quality goods & services, effectiveprovide quality goods & services, effective
delivery & overall customer satisfaction.delivery & overall customer satisfaction.
Examples are customer satisfactionExamples are customer satisfaction
measures & customer loyalty programs.measures & customer loyalty programs.

6. • Learning & Growth Perspective – ThisLearning & Growth Perspective – This
perspective focuses on the ability of theperspective focuses on the ability of the
organisation to manage its businesses &organisation to manage its businesses &
adapt to change. In view of the challengesadapt to change. In view of the challenges
of changes in the environment andof changes in the environment and
customer expectations, organisation takescustomer expectations, organisation takes
on new responsibilities that require itson new responsibilities that require its
employees to develop new skills &employees to develop new skills &
capabilities.capabilities.

7. • Learning & Growth Perspective – ThisLearning & Growth Perspective – This
perspective focuses on the ability of theperspective focuses on the ability of the
organisation to manage its businesses &organisation to manage its businesses &
adapt to change. In view of the challengesadapt to change. In view of the challenges
of changes in the environment andof changes in the environment and
customer expectations, organisation takescustomer expectations, organisation takes
on new responsibilities that require itson new responsibilities that require its
employees to develop new skills &employees to develop new skills &
capabilities.capabilities.