Balanced scorecard evaluation Essay Example | Topics and Well Written Essays - 2000 words

Balanced scorecard evaluation - Essay Example It should be able to in a good position to predict the future performance of the organization, and/or control and manage the organization’s strategic plan. A balanced scorecard is one of best management styles that capture this information in details. This paper gives an analysis of the purposes for non-financial performance measures. It also analyses the current performance measure adopted in Atlantic Tele-Network, Inc (ATN), the extend to which their performance measure captures the Kaplan and Norton’s balanced scorecard and its present strength and weaknesses. Purposes for non-financial performance measure Kaplan and Norton (1996) state that by analyzing the non-financial perspectives of an organization, managers are in a position to translate the strategy of an organization into actionable objectives. It also enables them to get an insight of how the strategic plan of the organization is being executed. According to Kaplan and Norton (1992), a balanced scorecard (BS C) maps the strategic objectives of an organization into performance metrics. This is done in four perspectives namely learning and growth, customers, financial and internal processes. The four perspectives of a balanced scorecard provide important feedback that explains how well the company’s strategic plan is being executed. From this feedback, managers are able to identify necessary adjustments that can be made to ensure that the company achieves its outlined goals and objectives. BSC is a financial and non-financial performance measurement tool. This means that apart from measuring the current performance of a company in terms of finances, a BSC as evaluates the efforts of a firm to make future improvements using customer, process and learning and growth metrics (Niven 2006). As noted in the above discussion, the three major perspectives that make up the non-financial performance measures/BSC of a company are learning and growth, customers and internal processes. Accordin g to Kaplan and Norton (2004), an analysis of the objectives of an organization’s internal processes helps the management of an organization to understand and choose type of process that are very important for satisfying its shareholders and most importantly, its customers. Basically, this performance measure outlines the main processes which an organization must focus its efforts for it to excel. An analysis of the learning and growth perspective of a BSC enables an organization to understand how it must learn, improve and innovate for it to achieve its objectives. A significant portion of this perspective is employee-centered. Some of the learning and growth measures will include manufacturing learning, time to market and product focus Douglas (2007). The customer perspective of a BSC enables an organization to understand how it is being viewed by its customers. It also enables it to know how well it is doing in terms of serving its target customers in an effort to meet its financial objectives. The main objectives here will be those that focus on new products, how to become a preferred supplier, becoming a responsive supplier and customer partnerships. Generally, a BSC enables a company to translate its vision into practical goals and adjust its strategy accordingly to the feedback and the learning received. The