The Balanced Scorecard

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Questions and Answers

What is the purpose of a balanced scorecard?

A balanced scorecard is a measurement system, management system, and management philosophy that helps translate vision and strategy into actionable objectives and initiatives across four perspectives: financial, customer, internal business process, and learning and growth.

What does the financial perspective of a balanced scorecard focus on?

The financial perspective focuses on how the organization appears to its stockholders and sets objectives and measures related to financial performance.

What does the customer perspective of a balanced scorecard focus on?

The customer perspective focuses on how the organization appears to its customers and sets objectives and measures related to customer satisfaction, retention, and acquisition.

What does the internal business process perspective of a balanced scorecard focus on?

<p>The internal business process perspective focuses on identifying the internal processes in which the organization must excel and sets objectives and measures related to process effectiveness and efficiency.</p> Signup and view all the answers

What does the learning and growth perspective of a balanced scorecard focus on?

<p>The learning and growth perspective focuses on how the organization sustains its ability to change and grow and sets objectives and measures related to employee development, innovation, and knowledge management.</p> Signup and view all the answers

What are the four perspectives of the Balanced Scorecard?

<p>Financial, Customer, Internal Business Process, Learning and Growth</p> Signup and view all the answers

What does the Balanced Scorecard focus on?

<p>Factors that create long-term value</p> Signup and view all the answers

What do traditional financial reports reflect?

<p>Only the past: spending incurred, and revenues earned</p> Signup and view all the answers

What does the Balanced Scorecard measure?

<p>Creation or destruction of future economic value</p> Signup and view all the answers

What does the Customer Focus perspective of the Balanced Scorecard aim to do?

<p>Satisfy, retain, and acquire customers</p> Signup and view all the answers

Flashcards

Balanced Scorecard Purpose

A management system translating vision into actionable objectives across 4 perspectives (financial, customer, internal, learning).

Financial Perspective (BSC)

Measures how the company appears to investors, focusing on financial performance.

Customer Perspective (BSC)

Measures customer satisfaction, retention, and acquisition through customer-oriented objectives.

Internal Process Perspective (BSC)

Evaluates internal processes needed for success focusing on efficiency and effectiveness.

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Learning & Growth Perspective (BSC)

Focuses on the company's ability to adapt, grow, and innovate through employee development and knowledge.

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BSC Perspectives

4 interconnected areas of analysis (financial, customer, internal, learning).

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BSC Focus

Creates long-term value by looking at factors beyond past performance.

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Traditional Financial Reports

Only show past financial activities and spending, not the creation of future value.

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BSC Measurement

The creation or destruction of future economic value.

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Customer Focus (BSC)

Ensuring customer satisfaction, retention, and successful acquisition.

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