Management Strategy - Balanced Scorecard

Balanced scorecard, balanced reporting, management strategy and management reporting based on the use of so-called non-financial ratios. The method was developed at Harvard Business School in 1990.

Balanced scorecard is intended as a management strategy based on the formulation of a mission and a strategic vision on the basis of which is formulated a strategy using strategy maps, i.e.. graphical representations of a company's critical goals, the key linkages between them and the factors affecting company performance.

Balanced scorecard is also an embodiment of the strategy to goals, measurements, initiatives and objectives. It is characteristic of the metrics as balanced scorecard leads to the conclusion that they can be divided into four groups or perspectives:

Financial, customers, internal processes and learning / growth.

From the 4 angles or perspectives of the score card the company make 4 questions:

• To succeed financially, how should the company emerge to the company's owners

• To achieve the company vision, how should the company emerge to its customers?

• Which business processes, the company should master in order to satisfy its shareholders and customers?

• To achieve the company vision, how should the company maintain its ability to change and develop?

For each question the company will have to set:

• Objectives

• Measuring for showing on the objectives achieved

• Specific targets for each measuring

• The necessary actions required to achieve goals

Prospects are ordered hierarchically in sequence, as the development of a balanced scorecard usually starts with defining the objectives of the financial perspective, the established goals of customer prospects in light of how the company by its value to differentiate themselves.

The internal process perspective specify targets for the critical activities to be undertaken to achieve the objectives of customer perspectives, and learning / growth perspective, indicate the end goal of the core competencies, technologies and corporate culture, which must be present for the company to function as required by the other perspectives.