Factors Impacting The Successful Execution Of Balanced Scorecard Accounting Essay

Aim- The objective of this newspaper is to demonstrate the factors affecting the sucessful implementation of a Balance scorecard.

Introduction- A short idea about healthy scorecard, explanation & operation. Literature Review and and Analytical platform- Detailed Analytical review of the researchers, on the factors impacting sucessful implementation of BSC.

Conclusion - A listing of the above issue and advice.

BSC

INTRODUCTION

Balance scorecard is a strategic planning and management system that can be used extensively in business and industry, authorities, and non earnings company worldwide to align business activities to the perspective and strategy of the business, improve interior and external marketing communications, and monitor corporation performance against strategic goals.

The first balance scorecard was created by Artwork Schneiderman(an independent expert on the management of processes) in 1987 at analog devices, a middle sized semi conductor company Down the road it was restructured by Robert Kaplan and David P. Norton in the utilization of balance scorecard in their 1992 article on balanaced scorecard. (The balance scorcard)

The balance scorecard was made for the improvement in organizational performance and competitiveness. (Arthur M schneiderman)

Traditional performance steps are inadequate to measure performance and guide organizations in speedily changing, complex monetary environment. Organizations need to link performance way of measuring to strategy, and must evaluate performance in ways that both encourage positive future results and replicate past performance.

Robert S. Kaplan and David P. Norton, among the proponents of the strategic principles, give a better definition:

"Healthy scorecard provides managers with the instrumentation they need to find their way to future competitive success. Today, organizations are fighting in complex environments so that an accurate understanding of their goals and the methods for attaining those goals is essential. Balance scorecard translates an organization's mission and strategy into a comprehensive set of performance measures that delivers the construction for a strategic measurement and management system.

It retains an focus on achieving financial aim but also includes the performance drivers of these financial objectives, "

(The Balanced Rating Greeting card: Translating Strategy into Action, pp. 1-3)

The release undertaken discusses first of all how the BSC evaluated with the course of time the need for the same. Then in the literature review an intensive discussion and point of view of the authors of articles are taken into account accompanied by a criticism. In the final outcome a proper summation and what the study has produced will be discussed highlighting the value, need and factors affecting the successful implementation of BSC would be mentioned.

In the previous eleven years, balance scorecard has play an vital role for putting into action strategy and monitoring performance. Creating a technique focused corporation (the word coined by the founders of the Balanced Scorecard technique) is a significant, challenging culture change for most organizations. Success in reaching this change requires:

Regular professional support and involvement.

Education, communication, and awareness of the strategy and measurements of its efficiency throughout the organization.

To review the stragy so that constant responses is obtained.

Tools to enable non-technical users to understand the key individuals of the actions.

Translation of the technique to operational terms so that position to strategy and implementation of it happen at all levels of an organization.

Process of BSC

We have to see the organization from four perspectives to be able to relate technique to achieve organizational goals :

Financial perspective

Organisations objective will be to earn higher gains by applying all the resources. Kaplan and Norton respect traditional dependence on financial data.

Customer perspective

In any business, importance on customer concentrate is relevant for organizational development if the customers aren't satisfied the revenues will be decreased and as a result return on investment will decrese.

Internal business perspective

The internal process identifies quality production, timely delivery wich will wthhold the existing customers and will improve to find new customers

Learning and expansion perspective

Here worker is trained and determined, and improved learning skills are given To enhance the work process, that will improve the quality of the product and alsoTimely delivery.

The four perspectives is shown below in form of graph :

Literature Review:

Factors impacting successful implementation of Balanced Scorecard:

Strategy Execution and control: Here creator has stressed the value about formulation and execution. Once the strategy has been devised, major problem Is to use the BSC Scorecard. The most frequent problem include underestimating enough time needed for execution and uncontrollable factors in the exterior environment. ( Helen Atkinson pp. 1443, 1444)

Another author (Ulf johanson et. Al) also argued about idea of BSC implementation. The concept does not enable an open invitation to take part in learning and development process. Trying to force the objectives on another is dangerous.

Senior management style, is another factor creator has bought to the notice. Here he argues that without proper mature management support and delegation it is difficult to properly apply balanced scorecard.

Strategic control systems : Proper control system provides the short term focuses on that deliver permanent goals. Tactical control are required to provide a balance between long-term organizational goals and short term operational needs. (Helen Atkinson pp. 1446). Thus he views that there is a need to determine co-ordinated tactical and management control objectives. Furthere more, he factors that issues associated with employee and suppliers are not co-related to performance management. Translating vision into strategy, is difficult process as its time consuming & focuses on much wider change in the business. (Helen Atkinson pp. 1449)

Organizations that have successfully integrated the Balanced Scorecard have achieved remarkable transformations in their financial performance, in many cases vaulting to the very best rates in their industry teams.

Many aspects of Balanced Scorecard development and deployment depend on effective use of technology to be successful. Numerous software packages have been developed to help automate the Balanced Scorecard, but it is very difficult to deliver the needed features within a program. Therefore, the Microsoft Balanced Scorecard Platform has been developed to permit organizations to:

Develop and deploy a scorecard economically using an existing infrastructure.

Manage and display the data and knowledge essential to Balanced Scorecards.

Facilitate research of options so that fast corrective action can take place.

The framework provides a comprehensive, adaptable, cost-effective way to deploy the Balanced Scorecard and deliver superior profits on people, functions, customers, and technologies.

Management engagement and endorsement- Without the entire personal support and endorsement of the exec team the transformation would be impossible. Communication of Balanced scorecard needs to be concentrated as, it provides top management ideas, views on technique to lower level( Anthony A. Atkinson et al. )

Floor level employees will be the ones who'll achieve the goals, so they should be aware of the aims and focuses on provided to them. (Meena Chavan)

Scorecard is ready as one time event. In most cases, Top executive team spends a lot more time in designing and introducing the BSC, therefore there lacks some absent measures at the time of start of task and release time. Here BSC execution fails which lacks in considering the review of BSC. (Anthony A. Atkinson et al. )

Critical Analysis of the Books:

Referring to Helen Atkinson on strategy implementation and control it is backed up in the sense that without proper implementation of the project, objectives won't drive further. Once the vision is defined clear, proper strategy should be chalked out so that Goals will be performed without any hindrance.

As Atkinson said full participation of top management is vital in order to accomplish organizational goals by using balanced scorecard by implementing four perspectives.

Morever, inside process takes on a essential role in increasing return on assets if, it is properly backed up by worker training and development. Employees should be provided satisfactory training to get the job done. Many, consultants criticizes that it generally does not provide a final credit score or view with proper advice or suggestions. It really is a simply list of metrics. FOR INSTANCE employees cannot view their rating with respective with their objectives.

Most of the organisations employs the four perspectives and doesn't allow scope for exterior perspectives. They should consider external factors in line with the needs of the situation and change. Various research workers and authors have critically bought most significant issues that will influence the execution of BSC. We ought to take their thought as an assessment so that BSC will run effortlessly in attaining organisational objective

In balance between Goals and accountability- I agree with meena chavan, in the sense that all individuals should take responsibility of the goals they receive. Unless they take accountability and responsibility goals will not be achieved

There are certainly all elements which sorts the foundation for a good scorecard, however it is important to add some extra details to the perceptions. The quick awareness of the scorecard should lead to an extremely specific knowledge of the strategy of the organisation. Furthermore, it will not be over financial. Financials are usually, though not necessarily, the measure of success or failure.

The balanced scorecard is treated as a consultancy project. It is put in place as a consultancy project somewhat than management job. By dealing with it as a consultancy job, time is spent and also cost is increased. Furthermore, the mature management team will be overpassed, to whom their will be no idea about strategies, objectives of the organization.

BSC seen as short term task - No company likes to deviate from the aims and run the same for short period. They insists that whatever strategy they developed should help long term. That is baseless factors.

BSC should be developed as an instrument for change. To understand the value of intangible resources in the value creation process and mobilize the attention and action of middle management, BSC should be developed with its focus on management control and non-financial indicators.

Conclusion:

Balanced scorecard was designed to measure organizations performance against strategic goals. It use has been made by the majority of the fortune 500 companies. For designing of BSC four perspectives are essential. Various studies have indicated that BSC also needs to include others factors in the perspectives such as environment, Job security. Focusing on one dimension of business success can lead to hazardous.

In the Literature and catalogs that I have reviewed, while planning the major factors that are responsible for implementation are, formulating strategy, establishing of proper perspectives, formulation of team, communication of the Strategy and goals and poor report card designs.

Furtheremore, healthy scorecard methodology requires some major changes in culture within the organization. The balanced scorecard requires understanding commitment and support from the most notable professional level. Different organizations have different needs, market segments, products and services That healthy scorecard will are different. It has additionally to consider the many perspectives.

Properly designed Balanced scorecard, will dwelling address the key problems with strategy execution, the performance of the business, the communication, the role of middle management and existing control systems.

Balanced scorecards have been implemented in corporations, administration organizations, non revenue organizations and institutions.

In conclusion, balanced scorecard is a management system, which has overcome the traditional measurement system enables the business to illuminate their perspective and strategy and interpret into action. . It offers feedback interior business & external business process to be able to continually improve strategic performance and results.

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