Balance Scorecard Essay
Balanced Scorecard
a.g. barr’s balanced scorecard and report
balance scorecard
“The ‘Balanced Scorecard’ approach aims to provide information to management to assist in the formulation of strategy and measurement of its achievement. It emphasises the need to provide the users with a set of information that addresses all relevant areas of performance in an objective and unbiased fashion.” report To discuss the above statement, we must first understand what the Balanced Scorecard at its core. The Balanced Scorecard is a tool used by businesses to set up goals and then lay out objectives on how they would achieve these goals. It utilises both financial and non-financial measures of a business to give a whole, rounded improvement, and then requires measures to monitor how these improvements towards the goal are being met. This is because financial measures are usually historical costs and are not very good for forecasting future goals for the business and thus not particularly useful in Strategic Management.
Background information The Balanced Scorecard was first introduced tool in 1992 as an improvement to already circulating management tools which were unable to account for links to strategic aims and the day-to-day running of the business. “The criticism has been focussed on the historic nature, revealing a great deal about the past, but nothing about the future alertness” (Nørreklit, 2000).
Balanced Scorecards arose out of the necessity of an improvement in planning, control and performance measurements of management accounting (Davis & Albright, 2004). This suggests that there was not an efficient method of measurement or control before the introduction of the Balanced Scorecard when people were attempting to use management accounting. After the Balance Scorecard was originally introduced to the world in an article by Norton and Kaplan in 1992, for the Harvard Business Review, there was not much change in attitudes towards management accounting
a.g. barr’s balanced scorecard and report
balance scorecard
“The ‘Balanced Scorecard’ approach aims to provide information to management to assist in the formulation of strategy and measurement of its achievement. It emphasises the need to provide the users with a set of information that addresses all relevant areas of performance in an objective and unbiased fashion.” report To discuss the above statement, we must first understand what the Balanced Scorecard at its core. The Balanced Scorecard is a tool used by businesses to set up goals and then lay out objectives on how they would achieve these goals. It utilises both financial and non-financial measures of a business to give a whole, rounded improvement, and then requires measures to monitor how these improvements towards the goal are being met. This is because financial measures are usually historical costs and are not very good for forecasting future goals for the business and thus not particularly useful in Strategic Management.
Background information The Balanced Scorecard was first introduced tool in 1992 as an improvement to already circulating management tools which were unable to account for links to strategic aims and the day-to-day running of the business. “The criticism has been focussed on the historic nature, revealing a great deal about the past, but nothing about the future alertness” (Nørreklit, 2000).
Balanced Scorecards arose out of the necessity of an improvement in planning, control and performance measurements of management accounting (Davis & Albright, 2004). This suggests that there was not an efficient method of measurement or control before the introduction of the Balanced Scorecard when people were attempting to use management accounting. After the Balance Scorecard was originally introduced to the world in an article by Norton and Kaplan in 1992, for the Harvard Business Review, there was not much change in attitudes towards management accounting
References: Ahn. H., (2001). Applying the Balanced Scorecard Concept: An Experience Report. Long Range Planning. Elsevier Science Ltd. Budde, J., (2007). Performance Measure Congruity and the Balanced Scorecard. Journal of Accounting Research, 45(3), pp. 515-539. Davis, S., and Albright, T., (2004). An Investigation of the effect of Balanced Scorecard implementation on Financial Performance. Management Accounting Research, 15, pp. 135-153, Elsevier Ltd. Kaplan, R. S., & Norton, D. P., (1992). The balanced scorecard – measures that drive performance. Harvard Business Review, 70(1), pp. 71–79. Kaplan, R., (2008). Conceptual Foundations of the Balanced Scorecard. Handbook of Management Accounting Research, 3. Elsevier. Kaplan. R., Norton. (2001). Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part 1. American Accounting Association, 15(1), pp. 87-104. Mooraj, S., and Oyon, D., and Hostettler, D., (1999). THE BALANCED SCORECARD: A necessary good or an Unnecessary Evil?. European Management Journal, 17(5), pp. 481-491. Elsevier Science Ltd. Nørreklit, H., (2000). The balance on the balanced scorecard – a critical analysis of some of its assumptions. Management Accounting Research, Academic Press, 11 pp.65-88. Nørreklit, H., (2003). The Balanced Scorecard: What is the Score? A rhetorical analysis of the Balanced Scorecard. Accounting, Organizations and Society, 28, pp. 591-619. Elsevier Ltd.