Balance Score Card (BSC)

The Balanced Scorecard (BSC) is the strategic management framework that companies often employ so as to monitor and guide success from different perspectives such as Learning and Growth, Customer Satisfaction and Internal Processes. It helps executing the organizational vision and strategy by converting them into assessable goals that staff can relate to. The BSC helps companies to align their actions with the long-term goals, allows for stakeholders to understand what their goals are, and to track their progress towards those goals. In the early 1990s, the Balanced Scorecard was created by Robert S. Kaplan and David P. Norton. Both public and private sector organizations are increasingly using the management of this approach.

Example Of Balance Score Card

Consider a store that wants to refine its operations in general and to develop in a manner that will stand out from the rest. The company has adopted the Balanced Scorecard system to serve as a strategic management platform. The business sees things from four main points of view: marketing, finance, operations, and learning and growth. In line to company's objectives, there are defined goals and measures for each view.

A financial perspective, the goals comprise increasing sales, earnings, and stockholdervalue. Things that can be used to measure performance are profit ratios, sales growth rate, and return on investment (ROI).

From the customer’s perspective, the aim is to ensure customers are happier, more loyal and more likely to stay with the company. Customer happiness scores, NPS, and the number of customers who stick with a business can be used to assess performance level.

Through periodical measurement and tracking of the performance across these four dimensions, the retail company can identify strong suits and opportunities for improvements. It enables them to opt for rational choices and correct strategies, which will result in long-term prosperity.