Free Custom «Supporting the Balanced Scorecard» Essay Paper

Summary

Mark Sanger’s Supporting the Balanced Scorecard presents a crucial concept in the effective management of today’s organizations. Sanger (1998) asserts that the success and the adherence of the organization to its set objectives can be preferably assessed by pursuing a balanced and critical analysis of all the organization’s operations. Mark opines that taking a view across a range of performance measures without taking sides on the situation while balancing the conditions is the best way that managers can use in a bid to make good decisions. Further, the article highlights key features of the concept, which forms part of his main objectives in the article. The author explicates four main objectives as noted under this concept of balanced scorecard as far as assessing the overall performance of the organization is concerned. These objectives included the need to instill effectiveness in financial measurement in behavior and performance. The article informs managers that for a measurement to be effective, it needs to be able to predict the future trends and behaviors as well as performance rather than just centering its comment on the past.

 

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The second objective that poses significant challenges to the managerial practices with regard to financial and operational measurement is the effective presentation of results. Moreover, the author was trying to emphasize the need for simple and consistent presentation of relevant data that highlights important issues and always helps assess priorities for easy understandability by the users of the information. Thirdly, the article unveils the significance of the adopting the concept of balanced scorecard in a bid in order to ensure the success of the organization. He explains that the concept of balanced scorecard entails a superb way of enhancing the success through different perspectives such as innovation, financial, customers and internal view of the organization. Lastly, as noted to be one of his objectives is the need to incorporate the operational measures. Mark was trying to make a point about the important role that operational measurement plays in the general assessment of the business. Mark was generally trying to warn managers to shun over dependence on financial measurement as the only measurement technique that can be employed to assess the business.

Critical Analysis

In my opinion, I think this concept is a masterpiece and managers who have had the opportunity to go through Mark’s work should with no doubt embrace this concept for the best of their organizations. Personally, I like the vitality employed in the communication of this whole concept of supporting the balanced scorecard. The author vividly unveils the relevance of this concept as far as making critical decisions that affect the overall performance of an organization is concerned. The article, in favor of the concept of balanced scorecard criticizes the incompetence of performance and behavior measurement because of the incompleteness associated with these measures.

The fact that the other systems only measure the easily measurable situations while dodging from the reality of the whole situation and its causes. Gupta (2006) affirms that unlike other concepts in the assessment of the business, the balanced scorecard system dictates that as much as it is able to tell what really transpired, the data should be reliable to explain why it happened. Besides, the concept is able to give data about what is amiss within the organization as well as provide information about where and how things are perfectly doing well.

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The going concern of businesses dictates that businesses or organizations should have visions and missions. Consequently, the need to create various strategies that must be pursued to the latter becomes almost obvious to all the organizations. In a bid to realize the organization’s goals, businesses ought to have well designed strategies that in turn help to determine what is to be measured. In addition, key performance indicators will help in determining and measuring the overall progress of the business towards realizing its strategic goals. Business success indeed rely on the way the shareholders are involved in making critical decisions, improving customer relations which helps to create a good image to the public, adopting best internal processes as well as encouraging innovation within the organization. Kaplan & Norton (2006) reiterate that since goal setting has been traditionally based on past performance within the organization, the practice tends to ensure the perpetuation of sins of the past. This suggests that the balanced scorecard is practically applicable and as it depicts, businesses should not base their assessment of the overall performance and behavior on the past but should also consider the prediction of the future.

Application

The article articulates the facts behind the operation of the balanced scorecard and its flexibility within organizations. It also highlights the manner in which managers can easily manipulate the system in a way that best suits the goals of the organization hence helping in the achievement of these goals as fast as possible. The article has had an enormous impact on my perspective about effective measurement of performance as well as behavior within an organization. The relevance of the contents plays a significance role in the way I shall consider viewing different organizations within my reach. I am aware that basing our decision on past events does not help to ensure effective assessment of the business. Smith (2010) agrees that businesses all over the world can try it by embracing the concept of balanced scorecard, which suggests that businesses need to maintain a clear analysis of the situations in trying to understand the trends within the business. In order to ensure the success of the business, it is very imperative to view the business in a professional perspective. That is to say, as a manager, I should always continue to encourage imagination, innovation and creativity among the employees.

Creating an excellent image to the public is also a crucial step towards the creation and improvement of customer relation. Consequently, the business will be able to realize better sales and record a corresponding improvement in the profits. It will also be very vital for me to apply well-designed and planned internal processes and procedures that will as well put the organization in a better chance to grow in its operation. Ensuring that shareholders’ wealth maximization goal is also pursued will also spearhead the development of the organization and hence the success of the business. I would also consider implementing the concept within the organization through the support of the technology that is among the most effective ways of implementing it.

The flexibility and friendliness associated with its application in assessing the business’ performance through the available data is also a key component that will motivate me to consider its application. The application of the concept of balanced scorecard is very competitive in measuring the overall business performance as well as predicting about the future and hence, it will aid in making critical decisions concerning the business’ future operations in meeting its set objectives. Tonchia & Quagini (2010) affirm that this will require clear and concise interpretation of the results as well as the identifying of what is good, what is bad, moreover what exactly will need to be changed. Consequently, this will require diversifying the data, which is to be analyzed and presented in a variety of ways. Since scorecard automation systems gives the operators the opportunity to normally provide the ability to view a variety of standard graphical formats its effective implementation is a very vital step in improving the assessment of the business.