Description of the Balanced Scorecard
The Balanced Scorecard (BSC) is a popular strategic management tool that various organizations can use to determine and improve their internal processes and lead to better external outcomes. BSC consists of four domains, including learning and growth, business processes, customer perspectives, and financial data (Fatima & Elbanna, 2020). Each represents a specific area that can significantly impact the organization’s performance and revenue. That is why companies frequently use this instrument to achieve specific objectives.
Using the Balanced Scorecard to Communicate Business Goals
Firstly, the BSC helps establish and communicate specific and narrow goals. When managers look at each of the four domains, they can determine particular objectives to reach. Secondly, after the goals are set, the BSC can help identify what actions are needed to achieve them. In some cases, it is not necessary to allocate many financial and physical resources to reach a target. It can be sufficient to strategize daily procedures, and the BSC helps cope with it.
Prioritizing Efforts Through the Balanced Scorecard Framework
Thirdly, since the instrument simultaneously focuses on four areas, one should understand that it is a rarity if an organization has sufficient resources to bring improvement to all of them. That is why the BSC is additionally efficient; it allows for comparing the goals and prioritizing them. Finally, this instrument establishes specific and measurable targets, which denotes that it helps evaluate progress.
Example of Effective Balanced Scorecard Implementation
It is reasonable to look at a specific example to determine how the BSC can be implemented. The organization should begin by identifying what can or should be improved in the four domains. In this case, the most significant aspect is to create specific, understandable, and measurable goals. The next step is to determine what interventions can be taken to reach the stipulated objectives (Fatima & Elbanna, 2020). When these steps are performed, the organization should implement the actions and assess progress against the stipulated goals.
Reference
Fatima, T., & Elbanna, S. (2020). Balanced scorecard in the hospitality and tourism industry: Past, present, and future. International Journal of Hospitality Management, 91. Web.