Essays on On the Conceptual Basis of the Balanced Scorecard by Kaplan Article

Download full paperFile format: .doc, available for editing

The paper "On the Conceptual Basis of the Balanced Scorecard by Kaplan" is a delightful example of an article on management. This paper looks at evaluating the article titled “ Kaplan (2010) On the Conceptual Basis of the Balanced Scorecard” . The analysis of the article is divided into three parts where the first part looks at providing details about the article, the author's idea, and provides a concept that the article contains. The second part presents strength and weakness that the article has and the last part presents the implications which the article has for managers.

This will thereby help to critically evaluate the article and provide an opportunity to look at different dimensions that the article provides. The article highlighted the manner in which management needs to integrate intangible assets in their planning process so that better value creation can be achieved. It was seen previously that businesses just used financial parameters to identify the value creation that the business was achieving for its stakeholders (Kaplan, 2010). The nonfinancial aspect was ignored. Using the nonfinancial parameters helped to analyze the performance of the company in a better way and helped managers to make better decisions.

The article also showed the manner in balanced scorecard can be changed depending on the different needs of the organizations so that the desired results are achieved. The article highlighted the manner in which managers can move away from the traditional method of understanding their performance to one which is more accurate and includes different parameters. Including the nonfinancial parameters helps managers not only to understand their present performance but also helps to improve the future forecast as including the nonfinancial parameters in the planning process provides better results (Faupel, 2012).

The article highlighted that the balanced scorecard focuses on four processes that look at ensuring that the short term activities are translated into long term objectives. This thereby helps to create the required focus for the future and provides an opportunity through which future planning is improved. At the forefront, the balanced scorecard looks at translating the vision into measurable objectives. This is achieved by identifying the nonfinancial parameters based on which performance evaluation will take place. This thereby provides important metrics through which performance evaluation is carried out and provides better decisions.

This is supported by the fact that the balanced scorecard looks at communicating and linking the entire organization (Kaplan and Norton, 2002). The focus is towards passing information to all levels and having individual performance evaluation charts thereby directing the manner in which work needs to be carried out. This helps to improve planning as it provides a better forecast for the future and provides an opportunity through which resource planning is improved.

In the end, a balanced scorecard helps to provide useful feedback and improves the learning process as different directives and areas which need to be improved can be easily identified. The overall process thereby helps to improve performance metrics and provides useful information to managers through which better decisions can be taken (Zizlavsky, 2014). The article also brought forward the manner in which balance scorecard helps organizations to align the management process and focuses on implementing long term business strategy so that better results are achieved. Since the balanced scorecard is developed and used in such a manner it has a cause and effect linkage (Kaplan and Norton, 2004).

Making changes in certain areas brings about major ramifications in different areas. This thereby reinforces the changes and provides different results through which the overall business process is better developed and shaped. The article also highlighted the manner in which a balanced scorecard provides an opportunity to have consistency. Since it becomes difficult for businesses to ensure consistency when major changes in the strategies are undertaken, consistency achieved can be achieved through a balanced scorecard.

This helps to improve the manner in which business works and links the entire process towards achieving better results (Rillo, 2004). A balanced scorecard is thereby a tool that will help businesses to improve the manner in which different work is carried out and will help to gauge the performance of the business in a better way as using the different metrics better results can be achieved. The tool provides managers with better forecasting and provides an opportunity to gauge the real value creation that the business has been able to achieve through the different financial and non-financial parameters.

References

Bremser, W.G and Barsky N.P. 2014. Utilizing the balanced scorecard for R&D performance measurement. R&D Management. 34(3), 229-238

Bigliardi, B. and Bottani, E. 2012. Implementing the balanced scorecard in the mechanical industry: Evidence from a case study. International Journal of Management and Decision Making. 11(2), 140-162

Basuony, M. A. K. 2014. The Balanced Scorecard in large firms and SMEs: A critique of the nature, value and application. Accounting and Finance Research, 3 (2), 14-22.

Chow C.W, Haddad K.M and Williamson, J.E. 2013. Applying the balanced scorecard to small companies. Management Accounting. 79(2), 21-27

Faupel C. 2012. Value-based performance management. Advances in Management Accounting. 20, 187-208.

Giannopoulos, G., Holt, A., Khansalar, E., and Cleanthous, S. 2013. The use of the balanced scorecard in small companies. International Journal of Business and Management, 8 (14), 1-22.

Hoque, Z. 2014. 20 years of studies on the balanced scorecard: Trends, accomplishments, gaps and opportunities for future research. The British accounting review, 46(1), 33-59.

Kaplan, R. S. 2010. Conceptual foundations of the Balanced Scorecard. Harvard Business School, Working Paper 10-074.

Kaplan, R. S., and Norton, D. P. 2002. The strategy-focused organization: How Balanced Scorecard Companies thrive in the new business environment, Internal Auditor, 59 (1), 21-22.

Kaplan, R. S., and Norton, D. P. 2004. Strategy maps: Converting intangible assets into tangible outcomes. Boston: Harvard Business School Press.

Madsen, D. O., and Stenheim, T. 2014. Perceived benefits of balanced scorecard implementation: Some preliminary evidence. Problems and Perspectives in Management, 12 (3), 81-90.

Molleman, B. 2007. The challenge of implementing the Balanced Scorecard.The proceedings of the 6th Twentieth Student Conference on IT, Enschede, 2nd February 2007.

Niven P.R 2014. Balanced Scorecard Evolution: A Dynamic Approach to Strategy Execution. Hoboken: John Wiley & Sons. 368p

Rillo, M. 2004. Limitations of balanced scorecard. Proceedings of the 2nd Scientific and Educational Conference, Business Administration: Business in a Globalizing Economy, Parnu, 30-31 January 2004, 155-161.

Zizlavsky, O. 2014. The Balanced Scorecard: Innovative Performance Measurement and Management Control System. Journal of Technology, Management & Innovation. 9 (3), 1-12

Download full paperFile format: .doc, available for editing
Contact Us