Bus 475 Wk 4

Strategic Plan Part 3: Balanced Scorecard

University of Phoenix

The balanced scorecard, developed by Robert S. Kaplan and David P. Norton, is used as a strategic planning and management system. A balanced scorecard turns an organizations strategic plan into an operational plan to use on a daily basis. It provides performance measures while helping the manager identifies what should be done and measured. It helps executives execute their strategic plans. “The balanced scorecard is a set of measures that are directly linked to the company’s strategy” (Pearce & Robinson, 2009). The balanced scorecard combines four perspectives; financial, customers, internal processes, and learning and growth to link long term goals to the vision and strategy.

A balanced scorecard is framework, not a report, which is designed to help organizations clarify their strategies. The balanced scorecard will also help management communicate the plan and align employees throughout the company effectively. The balanced scorecard provides focus, alignment, accountability, and communication. The objectives on the scorecard include the company’s most crucial goals of the strategic plan. The measures determine whether or not the company is on track to achieve these goals.

The financial perspective focuses on how the company should look financially to shareholders. Timely and accurate financial data is needed to maintain funding. For Matt’s Custom Carpentry maintaining profitability ensures positive future outlooks for the firm and its partners, primarily creditors. Reducing operating costs increases profitability and reduces overall costs. This will improve the company’s financial position. Reducing debt by paying creditors more than what is borrowed improves the company’s profit to debt ratio. All of these objectives play a role in expanding the organizations financial placement in the future.

The customer prospective focuses on how the...