The Balanced Scorecard Essay Example | Topics and Well Written Essays - 1000 words

The Balanced Scorecard - Essay Example The Balanced Scorecard Though the balanced scorecard system was originally developed by Kaplan and Norton to be implemented as a technique for performance management and evaluation, the technique is now used extensively by the organizations as a framework for implementation of new strategies in the business by the identification and deployment of the value drivers in the business with an aim to create strategic advantage. The Balanced Scorecard is a management framework comprising of the performance measurement system as well the process of meeting the key strategic objectives for the business. But there are several deficiencies associated with the original Balanced Scorecard framework as designed by Kaplan and Norton. These may be recognized as: The framework does not have a sufficiently codified mechanism to enable the organization to take decision regarding the inclusion and sustainability considerations in the design of the scorecard. Also, the balanced scorecard framework seems to lack the appropriate processes to evaluate risks that are beyond the client related risks. Other drawbacks of the balanced scorecard technique include the dependence of the scorecard on the performance and control features that do not originate from within the organization, the lack of rationality in the original framework of the scorecard model and the validity of the identified objectives based on which the cause and effect mappings are formed. (Banker and Chang, 2004). Also, the balanced scorecard technique does not take into account the effects of external competitive forces and the new technological necessities which are critical in deciding the performance of the organization and play a major role in deciding the risks and future strategies associated with the business. These shortcomings of the balanced scorecard framework can be addressed by including a wider array of people like social and environmental managers effectively in every critical step of the design and implementation of the balance d scorecard and considering the explicit social and environmental risk factors in the different perspectives involved in the building of the scorecard framework (Hoque, 2012). To effectively address the strategic issues created by both the external and internal factors affecting the performance of the organization, a number of techniques should be included in the balanced scorecard building and implementation processes (Merl, 2007). These may include encouraging the collaboration levels between the operations management unit, financial controllers, marketing management and the social or environmental management within the business, integrating a number of innovative strategic indicators into the balanced scorecard which are related to the social and environmental concerns and result in more value creation by the use of these activities and lastly, the identification of the critical strategic concerns related to the operations of the environmental and social wings of the organization . These strategies can be implemented by the use of mapping models and cause and effect diagrams (Kaplan and Norton, 2008). The balanced scorecard is often unsuccessful in meeting its objectives when there