Reference no: EM13910762 , Length: 1600 Words
Scorecard Directions
Build a Balanced Scorecard for the unit of the organization for which you work, or have worked. Focus on the unit with which you are most familiar rather than the organization as a whole. Identify the strategic objectives of the entire organization and the secondary objectives for the unit. Develop three specific objectives within each of the four perspectives for the unit. Each objective should have at least one quantified target metric associated with it.
It is essential to understand what metrics are. Be sure to study the next section of this Conference entitled "More Information on metrics" The specific information needed to calculate each metric should be discussed. For each metric discuss the appropriate target value and the actions that need to be taken to achieve the target. The paper should be no more than 7 pages, including the reference list, and be formatted in accordance with the APA guidelines as modified for the MBA program (https://info.umuc.edu/mba/public/MBA-apa.html). Metrics
Develop three specific objectives within each of the four perspectives for the unit. Each objective should have at least one quantified target metric associated with it. So your table should contain 4 perspectives, each with 3 specific objectives, and a target value of the metric for each objective.
If you would like to see a sample table of metrics, here is one example:
Perspective Objective Metric Target Value
Financial Revenue Growth
Operating Profit Growth
Short-term Solvency
Long-term Solvency Annual Rate of Growth
% EBIT/Sales
Current Ratio
Long-term Debt/Equity > 6%
> 7%
> 2.0
< 30%
Customer Increase Number of Customers
Maintaining Transaction Size
Improve Customer Satisfaction Annual rate of Customers Increase
Average Transaction Size
Median Score: Customer Survey > 5%
> $600
> 90%
Internal Product Improvement
Ratio of New to Old Products
Maintain Market Share % R&D Expense to Revenue
Ratio of New to Old Products
Market Share % > 4%
> 8%
> 24%
Learning Employee Training
Employee Turnover
Employee Compensation Annual Hours of Employee Training
Employee Turnover
Average Compensation > 30,000
< 3%
> $38,000
Sample Table of Metrics for an Example Business Unit
The Balanced Scorecard
Reading(Recommended but not required)
• Epstein, M.J., & Manzoni, J. (1997, August). The balanced scorecard and the tableau de bord; Translating strategy into action.Management Accounting, 79(2). (A)
• Kaplan, R.S., & Norton, D.P. (1996, January/February). Using the balanced scorecard as a strategic management system. Harvard Business Review, 74(1). (B)
• Kaplan, R.S., & Norton, D.P. (1996, Fall). Linking the balanced scorecard to strategy. CaliforniaManagement Review, 39(1). (A)
• Kaplan, R.S., & Norton, D.P. (1996, September/October). Strategic learning & the balanced scorecard. Strategy & Leadership, 24(5). (A)
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The Balanced Scorecard is the most widely used system of performance management, as evidenced by the following two studies.
1) Cranfield University, a well-know and well-respected U.K. institution of higher learning found that 75% of organizations with formal performance management systems use a system based on the Balanced Scorecard. Marr, B. (2004). Business performance management: current state of the art.Cranfield School of Management and Hyperion.
2) The Balanced Scorecard has become by far the the leading system for managing company performance, outdistancing systems based on quality management (such as six sigma) and financial management (such as Economic Value Added, known as EVA) according to Lawson, R. et al (2008). Scorecard Best Practices: Design, Implementation and Evaluation. Hoboken NJ: John Wiley & Sons, Inc. pp. 59-60.