Balanced scorecard is strategic planning

It provides a step-by-step methodology to build and implement the balanced scorecard framework. You will be able to practice developing a scorecard for a typical organisation, as well as examine your own organisation's requirements, costs and benefits in adopting a BSC system. It explores the challenges and opportunities within the scorecard methodology, scheduling and staffing and, how to organise a BSC effort within your own organisation. Topics covered in the course include:

Balanced scorecard is strategic planning

Delft University of Technology Summary The Balanced Scorecard translates Mission and Vision Statements into a comprehensive set of objectives and performance measures that can be quantified and appraised. These measures typically include several categories of performance such as financial performance Balanced scorecard is strategic planning as revenues, earnings and return on capital customer value performance such as market share and customer satisfaction measuresinternal business process performance such as productivity rates and quality measuresinnovation performance such as percent of revenue from new products and rate of improvement index and employee performance such as morale and best demonstrated practices Total Quality Management Many of the Total Quality Management tqm concepts originated with the work of Dr.

Edwards Deming, the American statistician. During World War II he taught American industries how to use statistical methods to improve the quality of military products. Deming, to Japan to help rebuild the country. Many Japanese manufacturing companies adopted Dr. Deming emphasises that management should encourage employee participation and should encourage the employees to use their understanding of the processes and how they can be improved Munro-Faure and Munro-Faure,pp Juran broadened quality from its original statistical origin.

He stressed the importance of systems thinking that begins with product designs, prototype testing, proper equipment operations, and accurate process feedback. This included company-wide activities and education in quality control, and promotion of quality management principles.

In Analog Devices, Inc. Schneiderman introduced goals for a series of quality measures that correspond to what he considered to be the critical success factors for ADI Anthony and Govindarajan, As part of the five-year strategic plan of ADI, Schneiderman also developed a one page report, called the Scorecard.

Balanced scorecard is strategic planning

This scorecard showed three categories of measures: The basic idea in creating this scorecard was to integrate financial and nonfinancial metrics into a single system in which they did not compete with one another for management airtime Schneiderman, During a second Nolan-Norton study the participants implemented scorecards within their organiations.

Eric Norton, who served as the project leader and facilitator, and Bob Kaplan wrote up the experiences of the participants with the scorecard and devised a "balanced scorecard" in This balanced scorecard supplemented traditional financial measures with criteria that measured performance from the perspective of customers, internal business processes and innovation and learning.

When using the balanced scorecard, companies articulate goals for each perspective and translate these goals into specific measures.

An example Kaplan and Norton, The Balanced Scorecard as a Strategic Management System In Kaplan and Norton argued that the balanced scorecard could be used as a strategic management system which supports four management processes Kaplan and Norton, Lofty statements such as "becoming the number one supplier" or "best in class" are difficult to translate into operational measures that have meaning to the people at the local level.

Creating a balanced scorecard however forces management to further clarify their vision until they are able to translate the vision into a set of objectives and operational measures on the balanced scorecard, which have meaning to the people who have to realize the vision.

These objectives and measures for the four perspectives, agreed upon by all executives, describe the long term drivers of succes. Implementing a strategy begins with communicating the strategy up and down the organization and educating those who have to execute it.

The strategy must also be translated into goals and performance measures on the balanced scorecard for operating units and individuals. Rewards might be linked to these performance measures.

Managers set targets for the long term objectives for all four scorecard perspectives. In order to achieve these long term objectives, managers identify the strategic initiatives required and allocate the necessary resources to those initiatives.

Finally, managers establish short term goals milestones for the measures that mark progress towards achieving the long term objectives.

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Managers formulate a strategy based on certain hypotheses about cause-and-effect relationships. When a company implements the strategy it might found out that certain cause-and-effect relationships are not found over time.

In that case a company should reconsider the theory underlying the unit's strategy and might even conclude that it needs a different strategy. This process of gathering feedback, testing the hypotheses on which strategy was based and making the necessary adjustments is called "strategic learning".

According to Kaplan and Norton, companies should use the balanced scorecard as the center for management processes, instead of budgets Kaplan and Norton, pp.

Porter's Five Forces Model

Govindarajan, "Management Control System, 9th Ed.Strategic Planning Kit For Dummies, 2nd Edition By Erica Olsen The Balanced Scorecard (BSC) is an excellent management tool that ensures you have a holistic and balanced strategic plan as well as a way to track performance over time to assess whether goals are being met.

A hands-on guidebook for making your strategy work with effective Balanced Scorecard design, deployment, and maintenance. Execution Excellence is the practitioner's guide to real-world implementation. Designed by a Balanced Scorecard (BSC) thought leader with 30 years of experience and over global implementations under his belt across a range of industry sectors, this guide .

SWOT Analysis. The SWOT analysis is a tool used in strategic planning to identify and, ultimately, prioritize the organization's strengths, weaknesses, opportunities and threats. A strategic plan is a document used to communicate to an organization the goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise.

Recently a client asked a very simple, and yet extremely complex, question: “What’s the difference between ‘strategic thinking’ and ‘strategic planning’?”. Browse balanced scorecard templates and examples you can make with SmartDraw.

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