A Balanced Scorecard

The Balanced Scorecard

The balanced scorecard enables organizations to track progress in building and maintaining the capacities necessary for development and profitability while keeping track of financial results (Niven, 2014). This tool is meant to supplement the financial measurements that an organisation has chosen to use. Most entities use this tool to balance the different competing wants they must contend with. The internal processes are one of the four viewpoints included in the balanced scorecard. This viewpoint demonstrates how an entity's internal procedures can effectively produce value for its consumers while also raising shareholder value. This is done so as to appeal and maintain targeted customers in different segments through delivering value as well as to effectively meet the expectations of the shareholders through handsome financial returns (Niven, 2014). As such, it becomes a necessity for an entity to take charge of its processes in order to produce products and services that are reliable and consistent.

Undertaking the Correct Processes

An entity outlines the goals of internal business processes and procedures as well as the steps an entity has to efficiently and effectively undertake internally so as to exert improved performance. Undertaking the correct processes and procedures in an efficient way will lead to consistent levels of quality products and services (Niven, 2013). However, measuring and setting the standards suitable to performance levels of each of the process measures requires formulation and arrangement of the right process variables which is usually an enormous task. Thus, to achieve this, management of an entity must initiate activities which are aimed at finding the right variables. Some of the key performance indicators and measures that can be used to evaluate the performance are capacity utilization, process and operational measures, quality optimization and process improvement (Niven, 2013). Therefore, an organization will be able effectively and efficiently produce high-quality products which will sufficiently meet the needs of the customers and consequently enhance the shareholders' value.

Learning and Growth Perspective

Another perspective is learning and growth which illustrate an entity's capacity to enhance innovation and creativity resulting in its long-term growth. This perspective emphasizes on the capacities of people in an organization (Zizlavsky, 2014). Employees' capabilities are developed by managers. Hence, it is the responsibility of the management to ensure that it attracts and maintains a pool of highly talented and motivated employees who are able to achieve the objective of an organization. Learning and growth perspective also focuses on the technology infrastructure and the organizational culture. The ability of a business firm to keep up with the trends of technology enables to remain competitive through the production of viable products and services as well as ensuring its information systems, databases and networks are up-to-date. Organizational culture enables an entity to identify with certain workplace norms, values, and beliefs (Zizlavsky, 2014). It influences the way in which employees relate at the workplace and their actions.

Workforce Satisfaction

The balanced scorecard recognizes that workforce provides invaluable non-financial asset and develop organization-specific intellectual capital to an entity and it must strive to ensure its workforce is satisfied (Braam, 2012). If an employee is satisfied, it will impact on their work morale which will influence quality, responsiveness to situations, and their productivity. The ability of an entity to retain highly satisfied workforce through a good and competitive incentive system will guard the organization against high employee turnover, attract potential talented employees and create a good image for the business entity.

References

Braam, G. J. (2012). Balanced Scorecard's Interpretative Variability and Organizational Change. In Business Dynamics in the 21st Century. InTech.

Niven, P. R. (2013) Integrating Change Management Techniques to Drive Balanced Scorecard Success. Balanced Scorecard Evolution: A Dynamic Approach to Strategy Execution, 327-339.

Niven, P. R. (2014). Balanced Scorecard Evolution: A Dynamic Approach to Strategy Execution. John Wiley & Sons.

Zizlavsky, O. (2014). The balanced scorecard: Innovative performance measurement and management control system. Journal of technology management & innovation, 9(3), 210-222