Balanced Scorecard

Balanced scorecard is a management system that enables organizations to translate vision and strategy into action. This system provides feedback on internal business processes and external outcomes to continually improve organizational performance and results. Robert Kaplan and David Norton created the balanced scorecard approach in the early 1990s.

Most traditional management systems focus on the financial performance of an organization. According to those who support the balanced scorecard, the financial approach is unbalanced and has major limitations:

• Financial data typically reflect an organization’s past performance. Therefore, they may not accurately represent the current state of the organization or what is likely to happen to the organization in the future.
• It is not uncommon for the current market value of an organization to exceed the market value of its ...