HR Assignment report writing help analysis on: Importance of a Balance Scorecard
1. Executive Summary
This report would help in the better understanding of the meaning & the importance of a Balance Scorecard. This report highlights the four basic parameters of the balance scorecard as well as a design which could be used for formulating & implementing the Balance scorecard in a book store.
The various graphical representations would help in the better understanding of the topic & how the parameters could be linked with each other making it the most essential strategic tool being used by every organization in today’s scenario.
2. Balance Score Card:
A balance score card refers to a strategic management tool used b various organization, business houses in order to measure its performance.
Balance scorecard refers to a well managed report maintained by various research design methods as well as certain management tools which would help in keeping a track, track the various activities undertaken by the managers & the staff members in the organization (Papalexandris, Ioannou, Prastacos & Soderquist, 2005).
It is one of the best methods, techniques, framework which would help in the proper performance management. The balance scorecards helps in measuring the framework as well as formulates & implement the various strategies which would help in providing a better organizational plan & attract the various elements involved in framing the balance scorecard (Miller, 2008).
A balance scorecard not only helps in formulating a framework but also helps in planning, measuring as to what is to be done & how it should be done. The scorecard would help any organization as well as the staff members working in it to implement the various strategies (Miller, 2008).
A general framework of a Balance Scorecard is depicted as follows:
(Source: Kaplan & Norton, 1996)
As depicted above in the general framework of balance scorecard, it should be noticed that there are four perspectives in a scorecard.
3. Parameters of the Balance Score Card:
According to Kaplan & Norton 1996, a balance scorecard views the enterprise on the basis of four parameters, collects all the relevant data, summarises it & relates it to the basic parameters.
These parameters could be described as under:
- Financial Perspective
- Customer Perspective
- Learning & Growth Perspective
- Business Process Perspective
The Financial Perspective
According to Kaplan & Norton, the need for an accurate financing structure is one of the major requirements for any organization to grow & establish its operations in near future. The need of an optimum finance is one of the key, essential elements for a proper functioning of any organization (Miller, 2008).
Accurate funding is one of the major priorities for the managers working in the organization. Managers would be required to do anything & everything to maintain a minimum cash balance in the organization for further expenses (Core Paradigm, 2002).
Thus, the financial perspective of the balance score card is one of the most important elements which would include the cost benefit data as well as the assessment of risk.
The Customer Perspective
The customer perspective is another important element of the balance score card which needs to be taken into consideration while formulating the balance scorecard.
The various philosophies have shown that there has been an increase in the customer focus as well as the satisfaction of the customers. If the customers will not be happy they would find various other suppliers who would be able to meet their requirements as well as needs (Papalexandris, Ioannou, Prastacos & Soderquist, 2005).
Lack of presentation, thus, refers to one of the leading factors which might lead to a decline in the near future, even when the financial status of the organization is pretty good (positive).
The Learning & Growth Perspective
According to Kaplan & Norton, 1996 learning is more than ‘training’. Learning & Growth perspective refers to another area which would lead to an increase in the learning curve of the organization, any business house etc (Miller, 2008).
This perspective consists of the training of the staff members, culture related attitudes of the corporate & improvement of the individual. It should be seen that all the workers, staff members working in the organization should be ready to acknowledge & be open to continue mode of learning. Continuous learning is one of the key to success for any organization lays down a strong foundation for the same.
The Business Process Perspective
The last perspective of the balance scorecard refers to the business process perspectives or the internal factors. It accounts to the various internal business processes which take place in the working of the organization (Papalexandris, Ioannou, Prastacos & Soderquist, 2005).
This particular perspective takes into consideration how well the organization is running & what all aspects should be taken into consideration in order to maintain the same speed of the success while operating in a fair business environment (Core Paradigm, 2002).
All the variables used while formulating the process should take into consideration fair designing, it should confirm with the requirements of the customers. The design made by the organization should be unique in every sense & should not be copied by any of the outside consultants (Miller, 2008).
4. Importance of a Balance Score Card:
With the growing passage of time, the use of balance scorecard has been increased from year to year. All the organizations wish to have a balance scorecard which would help them in to maintain the strategies in a more realistic manner i.e. all the four perspectives would be seen as an essential factor in order to survive in the business (Papalexandris, Ioannou, Prastacos & Soderquist, 2005).
The major aim of maintaining a balance scorecard is to have a balance between proper business tactics; people, money, and open communication are some of reasons why the scorecard has been developed (Kaplan & Norton, 1992).
It must be noticed that with the help of the balance scorecard the employees become less stressful & are motivated to perform their tasks on time. They feel as if they are too much involved in the organization. At the same time, it must be noted that the organization should stick to this tool in order to have success in the long run (Papalexandris, Ioannou, Prastacos & Soderquist, 2005).
5. Design of BSC for Book Store:
Similar is the case with a Book shop. All the four perspectives should be taken into consideration while designing the balance scorecard. It must be noted that the execution of the balance scorecard should be done in the most appropriate manner which would help the book store to establish them as well as sustain in the long run.
While designing the scorecard for the bookshop, the underlining design of the balance scorecard should be taken into consideration which would help in order answer the various questions (Papalexandris, Ioannou, Prastacos & Soderquist, 2005).
In case of the bookstore, the scorecard would help the owner of the shop to keep a track of all the books which come into the book store & gets sold off. It must be noted that money is the most essential parameter for any business to survive in the competitive industry whether in case of small – medium enterprise (Kaplan & Norton, 2004). In case of the financial analysis in the book store it would help in maintaining a fair consciousness about the finance related variables i.e. how much amount is due to be paid, how much amount was paid in advance, etc. The scorecard would help in measuring the ability as well as the capability of the book store in the future (Kaplan & Norton, 1992).
The scorecard would help in performing a fair financial analysis which would help the bookstore in order to spend, gain money, as well as be in the business with the existing funds available in the book store. The balance scorecard should be designed in such a manner which would help the book store owner in order to seek new ways of earning the profits (Papalexandris, Ioannou, Prastacos, & Soderquist, 2005).
In case of the book store, balance scorecard would act as strategic tool which would help in deciding the objectives, mission, and vision of the book store (Core Paradigm, 2002).
It must be noted that all the four perspectives are inter related to one another. The first & the foremost criteria while designing the balance scorecard is to formulate, realistic vision which could be easily taken care off. It should be noted that the vision made by the bookstore should be achievable (Core Paradigm, 2002). A fair linkage is to be maintained between the strategies as well as the vision, mission of the book store. It must be seen that the vision of the organization should be translated, transmitted to the staff members of the sore which would help in the accomplishment of the same.
Once the objectives have been set by the book store, the next step in designing the scorecard would be to link it with the internal business processes. All the internal business process should be such that they should be aimed at providing the customers with the best possible value (Core Paradigm, 2002).
The book store should also take into consideration the customer’s perspective which means that, the store should see what all books are liked by the readers & should keep a variety of the books in order to attract more number of readers towards itself. The prices charged should also be kept in mind while preparing the scorecard. The prices charged should be at par as compared to the value, quality & the variety of goods being given to the readers (Papalexandris, Ioannou, Prastacos, & Soderquist, 2005).
The strategic map below would help the book store in order to see how all the basic parameters linked & important which would help in designing the various short term as well as long term strategies to help the store to sustain in such a competitive environment (Papalexandris, Ioannou, Prastacos, & Soderquist, 2005)
6. Conclusion
Thus, it could be concluded that the balance scorecard has been referred to a one of the most important strategic tool which helps in maintaining as well as measuring the performance of the organization. It is a tool which also helps in the formulation of the various strategies i.e. for short & long run so that the goals could be achieved (Core Paradigm, 2002).
This tool helps in the implementation of the various competencies within the business house in order to have a competitive edge & outperform over the other players in the environment.
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