The balanced scorecard is strategic management technique for communicating and evaluating the achievement of the strategy and mission of an organization. It comprises an integrated framework of financial and non – financial performance measures that aim to clarify, communicate and manage strategy implementation.
The concept translates an organization strategy into objectives and performance measurements for the following four perspectives:
The financial perspective considers how the organization appears to shareholders. That is, the way the organization creates value for the shareholders. The balanced scorecards identify three core financial themes that will drive the business strategy, they are revenue growth and mix, cost reduction and asset utilization.
The customer perspective consider how the organization appears to the customer. The customer perspective should identify the customer and the market segment in which the business units will compete. There is a strong link between the customer perspective and the revenue objectives in the financial perspective.
The internal perspective requires a focus on the things the organization must excel at to achieve its financial and customer objectives. The value chain processes consist of those processes namely the innovation process, the operation process, and the post-sale process.
Learning and growth perspective
The learning and growth perspective requires the organization to ask itself whether it can continue to improve and create value. If an organization is to continue having loyal, satisfied customers and make good use of its resources, it must keep learning and developing.