Application of the Balanced Scorecard Approach in an Organizational Situation Essay

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Balanced Scorecard approach in an organizational situation

The Application of the Balanced Scorecard Approach in an Organizational Situation

A balanced scorecard is used to help ensure that a company is on the correct path and moving forward in a way that benefits it and its customers, as well as anyone else who has an interest in it, such as stakeholders or shareholders (Rohm & Malinoski, 2010; Kaplan & Norton, 1992). While some scorecards are only focused on the end result when it comes to what the numbers say, other scorecards deal with the strategy behind the numbers (Norreklit, 2000). These are the scorecards that are much more significant when it comes to technology companies, because they offer information about the how and why instead of just providing final numbers that are not going to provide strategic information (Rohm & Malinoski, 2010). It is not just about what a company is doing right, but how they are doing it right (Norreklit, 2000). This paper will address the difference between traditional scorecards and the more strategic way of creating one that will provide more significant information for companies that are looking for the best strategy for their company.

Analysis

Not understanding the how of the issue is much more of a downfall for technology companies, because they then have no strategy from which they can build and work (Rohm & Malinoski, 2010). By focusing only on the numbers that are produced by the company, that company misses out on information that could help them find ways to change and enhance those numbers in the future (Norreklit, 2000). Companies that focus on the strategies instead of just the numbers will be much better at finding ways to enhance their bottom line and move forward with their plans (Rohm & Malinoski, 2010). This is the main difference between the two types of balanced scorecards available to technology companies, but not every company understands the value of one scorecard over another.

In general, companies are used to addressing the bottom line (Rohm & Malinoski, 2010). When they get the traditional scorecard, it gives them a snapshot of what the company has been doing (Norreklit, 2000). They can see the information about how the company has performed, and if they see that there are issues with a particular area, that is the area that they can focus on in the future to see improvement (Norreklit, 2000). There is a down side to that traditional type of scorecard, though, in that it only tells the company the area where there is a problem. It does not tell the company why there is a problem in that particular part of the company (Rohm & Malinoski, 2010). While some companies may not see why that matters, the issue is that a company cannot correct something when it does not understand why there is a problem in that area (Kaplan &…

Sources Used in Document:

References

Kaplan, R.S. & Norton, D.P. (1992) The balanced scorecard: Measures that drive performance, Harvard Business Review, Jan-Feb: 71 -- 80.

Norreklit, H. (2000). The balance on the balanced scorecard - a critical analysis of some of its assumptions. Management Accounting Research, 11: 65 -- 88.

Rohm, H. & Malinoski, M. (2010). Strategy-based balanced scorecards for technology. Balanced Scorecard Institute. Retrieved from: http://www.balancedscorecard.org/Portals/0/PDF / Technology%20Company%20Balanced%20Scorecard%20Systems_06222010_Final.pdf

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https://www.paperdue.com/essay/application-of-the-balanced-scorecard-approach-125725