We began with the premise that an exclusive reliance on financial measures in a management system is insufficient. The balanced scorecard measures that drive performance. Definition and concept an approach to the provision of information to the management to assist with. Products should be as easy to use as browsing a web page or shopping online. Designing and using projects with real world application in a. Strategy mapping was developed by kaplan and norton as an extension to the balanced scorecard and to make implementations of the scorecard more successful.
This cited by count includes citations to the following articles in scholar. Kaplan has 71 books on goodreads with 35111 ratings. A new book by balanced scorecard creators robert s. Using the balanced scorecard as a strategic management system. Translating strategy into action by kaplan, robert s.
Balanced scorecard in higher education applied case study on. Using the balanced scorecard as a strategic management system by robert s. The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve internal and external communications, and. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Robert kaplan and david norton 1992 present the balanced scorecard bsc is widely used method to improve on an organizations performance both financial and non financial way. Norton in the early 90s of the twentieth century kaplan, norton 1992, p.
Kaplan and norton describe the innovation of the balanced scorecard as follows. Balanced scorecard case balanced scorecard an article by. Kaplan and norton s article wasnt the only paper on the topic published in early 1992 but the 1992 kaplan and norton paper was a popular success, and was quickly followed by a second in 1993. Norton included anonymous details of this balanced scorecard design in a 1992 article. The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton.
Using a balance scorecard approach to evaluate the value of. Translating strategy into action in 1996 and it became a business bestseller. It balances financial measures with performance measures and objectives related to all other parts of the organisation. It is based on four balanced perspectives, and links them together with the concept of cause and effect. This model has also been applied in the educational setting to evaluate educational institutions operations. Using the balanced scorecard as a strategic management.
Since its inception, the balanced scorecard has attracted. Norton improved balanced scorecard more and more with their studies and in in. Traditionally companies used only shortterm financial performance as the measure of success. A balanced scorecard is a model of business performance evaluation that balances measures of financial performance, internal operations, innovation and learning, and customer satisfaction hilton 2002. Norton is a founder and director of the palladium group and is coauthor of the balanced scorecard. Kaplan and norton 1992 introduced the balanced scorecard in the early 1990s to overcome the deficiencies of traditional financial performance measures in todays business environment. The objective was to overcome the inadequacies of the traditional financialbased performance measurement tools. In addition, it can help provide information on the chosen strategy more. At the head of the strategy map is the overriding objective of the organisation which describes how it. Kaplan is a professor at harvard university and david p. A practitioners guide to the balanced scorecard pdf 268kb. Balanced scorecard is a strategic management tool, used in both strategy formulation, organisational alignment and performance management brudan, 2010. Balanced refers to the balance between external and internal key figures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in longterm capabilities and customer relationships were not critical for success.
It is used to compare measured key figures with the vision and strategies of the enterprise. Management must take into account not only customers and. The balanced scorecardmeasures that drive performance robert s. Norton have had a major impact on how companies think about strategy and how they measure the performance of mangers. Financial measures, such as return on investment and return on sales. If the balanced scorecard is to be applied also in public management, then positive agency theory should be complemented with political economy to incorporate possible implementation and. Similarly, you do not need to implement every aspect mentioned in the strategyfocused organization or any other norton kaplan scorecard texts to get value from it. A critique of the balanced scorecard as a performance. Balanced scorecard is a management tool which is used by companies to gain complex information at a glance.
Balanced scorecard kaplan and norton 1992 developed the bsc to supplement traditional financial mea sures with operating measures oriented toward customers, internal processes, and learning and growth activities. Hbr 1992 the balanced scorecard measures that drive performance by robert s. Air force security assistance center foreign military sales center institutionalizes how it develops and executes international agreements by. Strategic performance measurement using balanced scorecard. A balanced approach to implementing the balanced scorecard. Commentary transforming the balanced scorecard from. Pdf the balanced scorecard in the public sector organization.
In the same way that you cant fly an airplane with just one instrument gauge, you cant manage a company with just one kind of performance measure. The balanced scorecard was originally developed by dr. The purpose of the research is to find an empirical evidence concerning the implementation of learning and growth perspective of balanced scorecard bsc in assalaam islamic modern boarding school. According to kaplan and norton 1992, balanced scorecard is a set of measures that gives top managers a fast but comprehensive view of the business. Hbr januaryfebruary 1992 and putting the balanced scorecard to. Figure 5 from transforming the balanced scorecard from. This entry describes the main principles that underlie the balanced scorecard bsc as presented by kaplan and norton in 1992. The article was based on a multicompany research project to study performance measurement in companies whose intangible assets played a central role in value creation nolan norton institute, 1991. Norton the balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork and global scale. Kaplan and norton are the coauthors of six hbr articles and four books on the balanced scorecard. Financial performance measures indicate whether a companys strategy, implementation, and execution are contributing to bottomline improvement. The balanced scorecard was introduced into business practice by the r.
The idea in brief the core idea the idea in practice putting the idea to work 1 article summary 2 using the balanced scorecard as a strategic management system. Norton in 1992 sparked the interest in the concept of the balanced scorecard. The balanced scorecard is defined as a set of measurements that give top managers a fast, but comprehensive view of the business including operational measures on customer satisfaction and the organizations innovation and improvement activities, as well as financial measurements. It links a vision to strategic objectives, measures, targets, and initiatives. The bsc is an instrument for the topmanagement presenting all needed information about the company at a glance in a so. It is based on a four dimensional framework, where each dimension represents a different set of. The balanced scorecard beginning in the early 90s kaplan and norton introduced a new performance measurement system called the balanced scorecard bsc. Norton introduced the balanced scorecard, a set of measures that allow for a holistic, integrated view of business performance. Strategy execution and the balanced scorecard harvard. The balanced scorecard as a performance management tool for. Translating strategy into action, robert s kaplan and david p norton, boston. What follows, provides guidance and advice on the development and implementation of a balanced scorecard for those organisations considering the introduction of a. The balanced scorecard, referred to as the bsc, is a framework to implement and manage strategy. The balanced scorecard was first introduced nearly 25 years ago by kaplan and norton 1992, 1993, 1996a, b as an integrated strategic performance management system to help organizations translate strategy into action.
Kaplan and norton s balanced scorecard carl lehmann. Companies often manage strategy in fits and starts, with strategy execution lost along the way. Within a decade, a majority of the fortune companies was implementing or had already implemented the bsc hendricks. The balanced scorecard measures that drive performance 1992. Norton i 1992, har metoden vundet indpas som ledelsessystem i mange virksomheder. The paper introduced the idea of focusing on human issues as well as financial ones, and measuring performance across a much wider spectrum than businesses had done before. Conceptual foundations of the balanced scorecard by robert s. Developed by robert kaplan and david norton, the balanced scorecard method translates an organisations strategy into performance objectives, measures, targets and initiatives. The development of the balanced scorecard ukessays. The phrase balanced scorecard primarily refers to a performance management. Balanced scorecard other bibliographies cite this for me.
They realize that no single measure can protives understand that their organizations measure vide a clear performance target or focus attention on. The approach combines traditional financial measures with nonfinancial ones that drive business outcomes, so that organizations focus on the future and act in their longterm best interest. The non participant observation pdf origins of balanced scorecard can be traced back to 1990 when. The scorecard was originally created to supplement traditional. Balanced scorecard an overview sciencedirect topics. A balanced scorecard is a strategic planning and management system that is used to align business activities to the vision and.
The balanced scorecard was developed by kaplan and norton 1992 as a performance measurement framework that added strategic nonfinancial performance measures to the traditional financial metrics to give managers and executives a more clear and holistic view of organizational performance. Conceptual foundations of the balanced scorecard robert s. Combining qualitative reasoning and balanced scorecard to. Figure 2 from transforming the balanced scorecard from. Kaplans most popular book is the balanced scorecard. They had conducted a yearlong study with 12 companies at the leading edge of performance measurement, and devised a balanced scorecardas a result of their research kaplan and norton, 1992, p.
The balanced scorecard retains traditional financial measures. Norton introduced the balanced scorecard to the private sector in 1992 as a methodology for measuring an organizations performance beyond. Balanced scorecard financial measurement of organizational. The bsc has attracted worldwide attention since it was introduced by kaplan and norton. Kaplan and norton developed the concept of the balanced scorecard bsc in 1992. Kaplan and norton 1992 introduced the balanced scorecard in the early 1990s to from mba bus501 at yeditepe universitesi. Kaplan and norton 1992 introduced the balanced scorecard in. Kaplan and norton published their ideas in full in the balanced scorecard.
Conceptual foundations of the balanced scorecard 3. More than providing information on whether or not business targets are achieved, balanced scorecard also clarifies the impact on corporate strategy. First 90 days, by michael watkins, a proven guide for leaders in career transition, offers strategies for getting up to speed quickly in your new role. Balanced scorecard basics balanced scorecard institute. Commentary transforming the balanced scorecard from performance measurement to strategic management. It was originally published by dr robert kaplan and dr david norton as a paper in 1992.
Balanced scorecard bsc is a management framework that was developed by robert s. A limited number of measures kaplan and norton, 1992, numbering between 1520 kaplan and norton, 1993 and 2025 kaplan and norton, 1996b. Integrating the balanced scorecard and promethee methods for seaports performance evaluation. Balanced scorecard is a strategy performance management tool a semistandard structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. Everyday low prices and free delivery on eligible orders. Januaryfebru ra y 1992 the balanced scorecardmeasures that drive performance robert s. Norton born 1941 is an american business theorist, business executive and management consultant, known as cocreator, together with robert s.
Financial measures are lag indicators that report on the outcomes from past actions. Balanced scorecard as one of the powerful model for strategic evaluation in all. The balanced scorecardmeasures that drive performance. A best practice perspective on managing poor performers. Norton is president and a cofounder of the balanced scorecard collaborative, a palladium company. Kaplan and norton 1992 introduced the balanced scorecard.
Norton published the article named putting the balanced scorecard to work in 1993. Kaplan and norton have also written a book on the balanced scorecard to be published in september 1996 by the harvard business school press. Several years ago we introduced the balanced scorecard kaplan and norton 1992. The balanced scorecard bsc is an approach to performance measurement introduced by dr. After working with several pioneering technology and manufacturing companies, robert kaplan, a harvard business school professor, and david norton, president of a management consulting firm, found that performance management was defined very narrowly, focusing almost exclusively on financial measures. A mixture of financial and nonfinancial measures kaplan and norton, 1992,1993, 1996a, b. Its objective is to translate an organizations mission and vision into actual operational actions strategic planning.
The bsc technique was developed by kaplan and norton 1992, 1996 to. David norton as a framework for measuring organizational performance using a more balanced set of performance measures. The idea of balanced scorecards spawned variations like the performance prism, resultsbased management and the thirdgeneration balanced scorecard. Their combined citations are counted only for the first article.
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