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Nội dung chính Show- 5.1.2 Other Types of ScorecardsData Management Processes and Quality Management6.5.3 Balanced ScorecardNOVO NORDISK: THE TRIPLE BOTTOM LINE1The Balanced ScorecardDescriptions of Methods and TechniquesDescriptionImplementing the Balanced Scorecard as a Strategic Planning and Performance Management ToolProduction data collection and performance analysis10.5.5 Double-loop feedbackMixed Methods for Performance Measurement8.3 Balanced ScorecardsOrganizational and strategic alignment for academic librariesStrategic alignment in the academic environmentThe balanced scorecardConcept and backgroundDon't Blame the Tools1.1 Research ApproachWhat is the balanced scorecard framework?What is a balanced scorecard in accounting?What are the 4 perspectives of a balanced scorecard?Why does the balanced scorecard include financial performance measures?
Michela Arnaboldi, ... Marco Giorgino, in Performance Measurement and Management for Engineers, 2015
5.1.2 Other Types of Scorecards
In addition to the approaches illustrated in the previous section, several other types of scorecards have been proposed, including:
•Tableau de bord (TdB)
•Third-generation BSC
•Risk scorecard.
TdB (Epstein and Manzoni, 1998; Bourguignon et al., 2004) was first introduced during the 1950s in France, where it had considerable success. This scorecard is designed starting with the company objectives, which are then translated into CSF. Each CSF is then associated with one or more performance indicators. The TdB structure also dictates that the company goals be disaggregated the business-unit level and then across organizational units within business units. Both levels are hence assigned a TdB with a process similar to what was adopted for the company overall.
TdB is a less structured method compared to the BSC because both the visualization format and the process for selecting indicators are less stringent. However, the differences between the two methods are minor and more often are linked to the way in which the approaches are implemented rather than their original characteristics, as defined by proponents.
The label third-generation BSC was introduced by Lawrie et al. (2004) to distinguish their proposal from the original BSC (Figure 5.1) and the strategy map (Figure 5.3). The third-generation BSC attempts to overcome two problems:
1.The difficulty in linking each indicator to a specific target; in particular, a weakness may be defined in abstract terms and then only after trying to define the target for a specific period.
2.The difficulty in defining objectives starting with the company’s BSC to create a detailed BSC for organizational units; to do this, enterprise goals must be translated to be specific to certain departments. For example, it is not easy to understand what a single organizational unit must do to increase EVA overall.
To avoid these problems, two devices are introduced. First, the selection process starts with what are called destination statements, which are statements in which enterprises directly define the target values to be achieved. According to Lawrie and Cobbold (2004), this approach allows companies to more easily achieve consensus within the organization. Second, the BSC is divided into only two levels, which emphasize: (i) expected results, derived directly from the objectives in the destination statements; and (ii) the activities that will be carried out to achieve these objectives.
Given that activities are easily associated with specific organizational units, this conceptualization favors the identification of goals to be assigned to each organizational unit. The set of indicators identified and their target values is the scorecard available to management. Table 5.1 gives an example of destination statements.
Table 5.1. An Example of Destination Statements
Financial results •
Achieve an EVA of 100 million €
•Reduce time for collecting trade receivable to 20 days
Internal processes •Improve manufacturing productivity by 15%
•Reduce defective products by 10%
Innovation •Reduce time to market to 1 month
Clients •Reduce delivery time to 5 days
•Increase customer satisfaction
Although this method is called a BSC, similarities with the original BSC are negligible. Instead, the freedom in structuring indicators and the emphasis on the integration among objectives of different organizational levels show that this method has more in common with TdB. Compared with TdB, the third-generation BSC is more structured and more easily implemented.
Finally, there is a recent evolution of the BSC: the risk scorecard. Calandro and Lane (2006) introduced a separate scorecard based on the four areas of the traditional BSC, where different types of risks are identified and categorized. Figure 5.4 illustrates the risk scorecard.
Figure 5.4. Risk scorecard.
Calandro and Lane (2006, p. 35).Read full chapter
URL: https://www.sciencedirect.com/science/article/pii/B9780128019023000050
Data Management Processes and Quality Management
Martijn Groot, in A Primer in Financial Data Management, 2022
6.5.3 Balanced Scorecard
Balanced scorecard (the term was originally introduced by Robert S. Kaplan and David P. Norton in the early 1990s) refers to qualitative metrics to measure the efficiency of the information supply chain. An example of a balanced scorecard in the area of information management could look, for instance, like that shown in Table 6.3.
Table 6.3. Balanced Scorecard
Financial aspects
•
Costs of inventory
•Ad hoc costs
•Savings/ROI
Internal aspects•
Department budget
•Planning/new content
Customer aspects•
Scoring on KPI metrics on supply chain management (SCM)
•Customer satisfaction
Training aspects•
Knowledge level of data management department
•Capability to take on new types of content, new products to process
KPI, Key Performance Indicator.
The balanced scorecard—as the name suggests—forces a much more comprehensive way of looking a business function, balancing costs and benefits. It offers a high-level perspective that can sometimes be very refreshing for data supply chain practitioners who can otherwise get bogged down in detail.
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NOVO NORDISK: THE TRIPLE BOTTOM LINE1
David L. Finegold, ... Peter A. Singer, in BioIndustry Ethics, 2005
The Balanced Scorecard
The BSC is a performance measurement system that can be used to monitor and measure individual employees, departments, and entire companies. The concept of the BSC is that it is meant to include financial as well as non-financial targets and goals.19 Traditionally, the BSC tool includes four areas for measurement: Financial, Customer, Internal Business Process, and Learning and Growth.
At Novo Nordisk, they are called: Finance, Customer & Society, Business Processes, and People & Organization (Exhibit 14.6). All employees have individual annual targets and development plans, which are linked to the corporate and departmental BSCs. In this way corporate and departmental targets, set in the BSC process, guide the setting of individual performance targets.
EXHIBIT 14.6
Company Balanced Scorecard 2004
Balanced Scorecard 2004
Bisgaard explains one example of a goal on his departmental BSC:
This year it was decided that the employees don't know enough about Novo Nordisk in the market place. This is when the Balance Scorecard comes into play – I have on mine that 80% of my employees should know more about Novo Nordisk in the market place. That will be measured and I will be held accountable for reaching that goal.
Another goal that appeared on the scorecards was that, by the end of the year, 90% of all employees should meet people with diabetes to discuss their condition and gain a better understanding of life with diabetes. To meet this, managers spent a day with a sales representative, meeting with pharmacists and physicians. Employees also had the opportunity to attend information sessions to learn from diabetes patients.
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Descriptions of Methods and Techniques
Jytte Brender, in Handbook of Evaluation Methods for Health Informatics, 2006
Description
Balanced Scorecard (BSC) is based on a principle of critical success factors in terms of a limited set of performance indices. These are continuously monitored and are balanced against each other in an attempt to create an appropriate relation between their results (Shulkin and Joshi 2000; Protti 2002). Normally the success factor relates to the strategic objective management level, hence the method is classified as being a strategic management tool. There is, however, nothing wrong in having the performance-related index focusing on other areas (Shulkin and Joshi 2000) – for instance, to obtain a better service profile toward service users or even taking it down to a personal level to assess performance.
The philosophy behind BSC is that of a constructive assessment, as the method can be used through group dynamics to create understanding and awareness of how certain aspects of the organization works externally and internally (Protti 1999 and 2002).
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Implementing the Balanced Scorecard as a Strategic Planning and Performance Management Tool
Kathryn Ball, Vivian Lewis, in Quality and the Academic Library, 2022
Background
The BSC is a well-recognised and long-standing strategic planning and performance management tool originally created by Robert Kaplan and David Norton for use in industry, and more recently adopted by government and nonprofit organisations (Kaplan & Norton, 1996). The BSC is premised on a four-quadrant framework. Organisations embarking on the Scorecard are challenged to shape their high-level strategic thinking, not just in terms of financial health (the natural tendency of for-profits), but also in terms of staff learning and growth, customers and internal processes.
The tool demands clear and precise linkages between the key planning elements. The organisation must identify its high-level strategic directions in terms of the four prescribed quadrants, and then determine key metrics that clearly measure its success in meeting those objectives. Precise targets are set for each measure. Finally, strategic initiatives or projects must be aligned directly with improving the organisation’s performance in closing the gap between set targets and current performance.
McMaster University Library embarked on the Scorecard project with three other university libraries (University of Virginia, University of Washington and Johns Hopkins University) as part of an ARL pilot project. The four institutions shared an interest in adding more rigour, focus and discipline to their strategic planning processes (Kyrillidou, 2010).
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URL: https://www.sciencedirect.com/science/article/pii/B9780128021057000257
Production data collection and performance analysis
In Practical E-Manufacturing and Supply Chain Management, 2004
10.5.5 Double-loop feedback
The balanced scorecard methodology builds on some key concepts of management ideas such as total quality management (TQM), including customer-defined quality, continuous improvement, employee empowerment, and measurement-based management and feedback. Traditionally, ‘quality control’ and ‘zero defects’ were introduced to ensure that the customer received only good quality products, and aggressive efforts were focused on inspection and testing the end of the production line.
The problem with this approach is that the true causes of defects could never be identified, and there would always be inefficiencies due to the rejects and defects. Deming realized that variation is created every step in a production process, and the causes of variation need to be identified and fixed. If this is done, it would be possible to reduce the defects and improve product quality indefinitely.
To establish such a process, Deming emphasized that all business processes should be part of a system with feedback loops. The feedback data should be examined by managers to determine the causes of variation, identify the processes with significant problems and then focus their attention on fixing that subset of processes.
The balanced scorecard incorporates feedback around internal business process outputs, as in TQM, but also adds a feedback loop around the outcomes of business strategies. This creates a ‘double-loop feedback’ process in the balanced scorecard.
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Mixed Methods for Performance Measurement
Leo Appleton, in Libraries and Key Performance Indicators, 2022
8.3 Balanced Scorecards
The Balanced Scorecard (BCS) is a popular business management tool used by organisations which wish to evaluate the performance of different aspects of the business and report back holistically in order to demonstrate interdependencies. It is a widely used strategic performance management framework that allows organisation to identify, manage, and measure their strategic objectives (Marr, 2015a, 2015b, p. 46).
The Balanced Scorecard was developed in the early 1990s by Dr. Robert Kaplan and Dr. David Norton when they noticed that most companies measured their performance through exclusively financial measures. On the basis that financial performance only relates to how a company had performed in the past, they do not tell a business leader much about where the business is headed in the future. Kaplan and Norton suggested that in isolation, financial measures are not particularly ‘balanced’ or insightful with regard to setting strategy and that a more balanced method which takes into account nonfinancial objectives and activities, such as customer experience, internal processes, and staff motivation would be more desirable (Kaplan & Norton, 1996). The four perspectives of the original balanced Scorecard are as follows:
•Financial – focus on the performance with regard to the financial objectives of an organisation (e.g. how much profit, return on investment, etc.)
•Customer – focus on performance and quality from the point of view of the customer (e.g. customer satisfaction or experience)
•Internal processes – focus on internal operational goals and objectives and key processes required to deliver the customer objectives
•Learning and growth – focus on staff and employee performance with regard to staff skills, training, organisational culture, and leadership
Through focusing on these four perspectives the Balanced Scorecard considers both internal processes and external outcomes in order to look continuous improvement and positive results. David Parmenter (2010) champions the balanced scorecard as a holistic method of measuring performance but also suggests two further perspectives to be considered alongside those identified by Kaplan and Norton above. These are as follows:
•Environment/community – focus on where the institution sits within the community or region and the impact it has on its locality
•Employee satisfaction – focus retention of key staff, recognition and reward, staff motivation
By measuring performance against either the four or six perspectives of the balanced scorecard an organisation's leaders can measure, analyse, and improve all of them together, therefore making for a more stable and strategically sound performance measurement platform.
The balanced scorecard was initially considered to be an instrument for the private (for-profit) sector, but Kaplan himself suggested that its “potential to improve the management of public sector organisation is even greater” (Kaplan, 1999, p. 1). Several commentators went on to argue that it was not quite so easy to transfer the balanced scorecard approach into the public sector due to the multiplicity of customers and stakeholders in the public sector (Greatbanks & Tapp, 2001) and that the framework needed to be changed in order to capture their mission-driven nature, placing more emphasis in accountability and results in meeting user expectations for public services and products (Rohm, 2004).
Having said this, many libraries have now adopted a balanced scorecard approach, and a recent review of this practice found that the key drivers for using such an approach was to improve library management, both strategically and operationally (De La Mano & Creaser, 2014). This research showed that considerable support was required in order to develop balanced scorecard frameworks for libraries and that one of the most challenging things was developing and selecting meaningful and appropriate performance indicators and key performance indicators. For library and information services the balanced scorecard allows the library to translate the organisation's strategic objectives (its mission and overall strategy) into a coherent set of measures that reflect its specific goals and targets. An effective and transparent scorecard will enable an observer to deduce the organisation's strategy, and how well it is performing against it, a glance (Corrall, 2000).
The balanced scorecard offers a robust ‘mixed method’ approach for libraries to measure performance and quality and as such the framework can make use of qualitative evidence as well as metrics, but key performance indicators play a crucial role in the effective execution of a balanced scorecard.
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URL: https://www.sciencedirect.com/science/article/pii/B978008100227800008X
Organizational and strategic alignment for academic libraries
Brinley Franklin, in Transforming Research Libraries for the Global Knowledge Society, 2010
Strategic alignment in the academic environment
There are a few notable examples of aligning strategies to performance in the academic environment. One is The University of Leeds, in the United Kingdom. It articulated a vision to become one of the top 50 universities in the world by 2015 based on their distinctive ability to integrate world-class research, scholarship, and education. Their strategy placed equal importance on research and education, with their differentiating factor being the integration of the two. Its vice chancellor stated that ‘the process of truly embedding the university’s strategic goals into the working lives of all our staff is our highest priority.’ In one year, their ranking improved by 41 places, to number 80, in the THES-QC world university rankings for 2007 (Kaplan and Norton, 2008).
Applying Balanced Scorecard techniques, Leeds developed a strategy map based on four strategic themes:
■enhancing its international performance and standards;
■achieving an influential world-leading research profile;
■inspiring students to develop their full potential; and
■enhancing enterprise and knowledge transfer.
Using ‘Inspiring students to develop their full potential’ as an example, four strategic objectives were then developed by various university stakeholders to address that theme:
■delivering excellent and inspirational learning and teaching;
■translating excellence in research and scholarship;
■providing an exceptional student experience; and
■introducing a comprehensive approach to recruit additional underrepresented and nontraditional students.
Measures, targets, and initiatives were also developed for the strategic objectives as shown in Table 6.1. Other universities have aligned their strategies to performance using the Balanced Scorecard, including the University of Edinburgh and the University of California, San Diego, which was inducted into the Balanced Scorecard Hall of Fame in 2003.
Table 6.1. Leeds University strategic plan
measurestargetsinitiatives ‘students really matter’Student satisfaction Top quartile of higher education sector Student satisfaction survey Student/staff ratio Reduce to 15-1 Learning and teaching process improvement program Level of demand for courses Increase to 8 applications per place Student partnership agreements Average A-level score of recruited students Increase to 420 Peer mentoring scheme Proportion of full-time undergraduate cohort from lower socioeconomic groups Increase to 24% Student portal
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The balanced scorecard
Viveca Nyström, Linnéa Sjögren, in An Evaluation of the Benefits and Value of Libraries, 2012
Concept and background
Besides having goals and strategies for the organisation, it is also necessary to have a strategy for how to work with those goals and strategies. This is why the balanced scorecard has become such a popular management tool.
The earlier chapters of this book have dealt primarily with evaluation methods, that is, how to conduct a comprehensive analysis of business and its impacts. During evaluation work you often need to get expert help from outside for such things as designing questionnaires, conducting cost-benefit analyses, leading focus groups and compiling the results in a user-friendly way. An evaluation can take place when the need arises and can have different purposes; one can evaluate a project or activities on an occasional basis or regular intervals, such as every few years.
Balanced governanceThe balanced scorecard is a way of structuring day-to-day monitoring work. Monitoring takes the form of periodic analyses of how the organisation is developing, based on measurements taken scheduled intervals. The concept of the balanced scorecard assumes that goals are linked to metrics, but it makes no distinction between external and internal efficiency. This might be because, in industry, external efficiency is already assumed: the company is expected to operate a profit. The problem is that managers develop tunnel vision with regard to goals and they focus too much on financial results. A one-sided analysis of financial performance is often criticised for the following reasons:
■It lacks a long-term perspective.
■Quality aspects of the organisation are not identified and accounted for.
■Internal financial reporting and reporting to directors focuses on what has already happened, rather than looking forward.
■The structure and methods are inadequate for setting, monitoring and evaluating goals.
■It does not highlight the importance of employees’ having knowledge of, and being in agreement with, the goals, strategies and outcomes.
Therefore the impetus behind balanced governance is the need to focus on other aspects than just the financial ones. According to the authors Kaplan and Norton, the need has arisen because information-age companies achieve success through investment in and good management of their intangible assets.
Mass production and service delivery of standard products and services must be replaced by flexible, responsive, and high-quality delivery of innovative products and services that can be individualized to targeted customer segments. Innovation and improvement of products, services, and processes will be generated by reskilled employees, superior information technology and aligned organizational procedures. (From The BalancedScorecard: Translating Strategy into Action, 1996, p. 18)
This also holds true for the public sector.
The chain of cause-and-effect relationships in the original balanced scorecard model looked somewhat as shown in Figure 8.1.
Figure 8.1. Chain of cause and effect as a vertical vector
Source: Kaplan, R. The Balanced Scorecard: Translating Strategy into Action, 1996, p. 31)From this it is clear that the financial goal is the driver. Customers are a necessity for reaching the objective. In the public sector, citizens are the objective of the activity and finance is the means of achievement. Therefore, balanced governance in the public sector must be guided by impact goals that are in line with the mission. Otherwise, there is a risk of getting bogged down in activity and performance goals that do not indicate the right things.
The most common graphical representation of the principle of the balanced scorecard is a design that appeals because of its simplicity (Figure 8.2).
Figure 8.2. Graphic illustration of balanced scorecard
Source: Olve (1999), p. 22.The emphasis is on the balance between the different perspectives: financial, customer, internal processes and learning. Together, they are the cornerstones, that is, the four main pieces in terms of the organisation’s development. An organisation with skilled employees, satisfied customers, efficient internal processes and good finances is a well-functioning organisation. The metrics for these four perspectives should indicate how development is progressing, that is, what we are already good and how we need to improve.
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Don't Blame the Tools
Elizabeth DanielProf, ... Keith DixonDr, in Don't Blame the Tools, 2009
1.1 Research Approach
The well-established balanced scorecard (BSC) was selected as one idea or innovation to study. To provide a comparison, the relatively newer idea of a programme management office (PMO) was also selected. As organisations carry out more, and increasingly complex, projects, such offices are being established to coordinate and centrally manage these projects.
The exploratory nature of the study suggested a case study approach, and four in-depth case studies of organisations were undertaken. Three organisations adopted a BSC and one organisation had adopted a PMO. The three organisations that had decided to adopt the scorecard provided an in-depth range of experiences: one organisation was still in the process of implementing the scorecard, one had implemented it and was using it, whilst the third organisation had implemented the scorecard, used it for a number of years and had ceased using it and moved on to a new idea.
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What is the balanced scorecard framework?
The balanced scorecard is a strategic planning and performance management framework that tracks financial and non-financial measures to determine an organization's effectiveness and when corrective action is necessary.What is a balanced scorecard in accounting?
A balanced scorecard is a strategic management performance metric that helps companies identify and improve their internal operations to help their external outcomes. It measures past performance data and provides organizations with feedback on how to make better decisions in the future.What are the 4 perspectives of a balanced scorecard?
The balanced scorecard is anchored on four perspectives, which include financial, business process, customer, and organizational capacity.Why does the balanced scorecard include financial performance measures?
The measurement taken by a balanced scorecard helps the company to improve, innovate. The main reason to include financial performance is how efficient the process is working. Financial performance shows the condition of a company. Tải thêm tài liệu liên quan đến nội dung bài viết The balanced scorecard framework uses accounting-based measures of performance in the Balanced scorecard framework
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