Although the concept of a balanced scorecard has been known for a comparatively short time period, it has already proven to be one of the most groundbreaking concepts of the century.
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Because of the opportunity for embracing the key elements contributing to the organisation’s sustainability and the tools for evaluating it, which a balanced scorecard provides, the specified framework must be considered one of the key inventions in economics.
Owing to its focus on the creation of sustainable environment for business evolution, the balanced scorecard approach contributed to bolstering the progress of Kaplan & Norton.
The development of the concept of the BSC and the introduction of the personal element into its general framework can be viewed as the first step towards improving the original idea.
The specified stage of the concept evolution is also market by a significant reduction in the controversy, which the BSC approach used to be characterised by: “Balanced Scorecard (BSC) is a strategic performance measurement system devised after a yearlong multi-company research project” (Coe & Letza 2014, p. 63).
While at first, the emergence of the BSC was linked closely to only four perspectives, from which the performance of a company could be assessed, the further introduction of new factors allowed for a more adequate assessment and, therefore, a more precise location of the key problems that an organisation could face.
The incorporation of the personal scorecard element into the overall framework along with the tools for assessing the overall company’s performance was another essential addition to the existing approach.
There is no secret that a company’s success hinges on the motivation of the staff (Coe & Letza 2014); therefore, it is crucial that the factors contributing to the employees’ satisfaction should be included into the BSC framework.
Traditionally, the BSC history is split into three key stages, the first one being the creation of the concept and its further definition. Afterwards, the stage that included the search for the ultimate BSC approach and the attempt at distilling the ideal BSC formula should be mentioned.
The modernisation of the BSC principle has led to the discovery of one of the key details that made the existence of the BSC approach possible in the 21st century. To be more specific, the incorporation of the tools that allowed for a faster and more efficient information transfer facilitated the applicability of the BSC.
The Rexam BSC (Coe & Letza 2014) was designed at the third stage of the evolution of the BSC notion.
Promoting the recognition of each and every stakeholder involved in the process of BSC application, the specified framework can be viewed as the “transition away from a simple stand-alone performance measurement tool to a rallying framework for core managerial processes” (Coe & Letza 2014, p. 69).
Consequently, the specified notion allowed for putting an even stronger emphasis on the significance of progress and the need for an organisation to evolve. The continuous development, which the transition from the BSC to the RSC is marked by, is clearly the landmark of a new era in the BSC evolution.
The ability to age well can be considered one of the strongest advantages of the Balanced Scorecard approach (BSC). A recent case study has shown that the incorporation of the BSC framework into the company’s operations allows for an increase in the organisation’s productivity (Coe & Letza 2014).
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Moreover, the further development of the BSC concept has allowed for “objectives previously set out in the strategic linkage model” (Coe & Letza 2014, p. 71) to be attained successfully.
In other words, the premises for further evolution of the company, which the latest innovations introduced to the BSC model allow for, suggest that the BSC approach can be adopted to the global environment as well as to the local ones.
Since the BSC framework sets the conditions for further organisational development and puts progress at the top of a company’s priority list, it is only logical to assume that the BSC approach itself is prone to frequent updates and a consistent change.
Indeed, the case study outlines that the phenomenon of the balanced scorecard requires that the latest innovations, including information technology, should be incorporated into the framework. As a result, the key processes are carried out in a much more efficient and expeditious manner.
Though the concept of the Balanced Scorecard has been created comparatively recently, it has already managed to grow into a fully developed framework for evaluating the company’s progress.
More impressively, the BSC strategy helps address both the industrial processes within a company and the organisational ones, specifically, the relationships between the managers and the staff, the rates of staff satisfaction, etc.
One of the greatest inventions that have recently occurred in the field of business and economics, the BSC approach must be credited for its contribution to the design of corporate sustainability principles, which are crucial for an organisation to survive, develop and prosper in the realm of global economy.
Coe, N & Letza, S 2014, ‘Two decades of the balanced scorecard: A review of developments,’ Poznań University of Economics Review, vol. 14, no. 1, pp. 63–75.