BALANCED

SCORECARD

THIMCNBNG
Group 6:
Le Thi Lam Nga
Le Anh Quan
Dao Tan Linh
Pham Ngoc Thai
Nguyen Thi Bich

Outline
Origin & Definition
Challenges & Purpose
Users & Examples
Critics
Conclusion

Origin
It was originated by Drs.
Robert Kaplan (Harvard
Business School) and David
Norton as a performance
measurement
framework
that added strategic nonfinancial
performance
measures
to
traditional
financial metrics to give
managers and executives a
more 'balanced' view of
organizational

A Measurement
System?

A Management
System?

A Management
Philosophy?

What Is a Balanced
Scorecard?

The Balanced
Scorecard
What is it?
Definition:

a strategic planning and management

system that is used extensively in

business and industry, government, and
non profit organizations worldwide;

Improve internal and external

communications, and monitor

organization performance against
strategic goals.

Translating Vision and

Strategy: Four
Perspectives

Example

Challenges that BSC addresses

The Vision
Only 5% of the work force
understands the strategy
The People
Only 25% of managers have
incentives linked to strategy

The Management

9 of 10 companies
fail to execute
strategy

60% of organizations dont link

budgets to strategy
The Resource

85% of executive teams spend

less than one hour per month
discussing strategy

What is good for?

The Balanced Scorecard identifies the factors that create long-term

economic value in an organization, for example:

Customer Focus

Business Processes: deliver the value proposition to targeted

customers

Organizational Learning & Growth:

Customers

Processes

People

Balanced Scorecard
Adopters
Mobil

1993

#6 in
profitability

(USM&R)

1993

Stock Price = $59

Property & Casualty

Brown & Root Engineering

(Rockwater)

Retail Bank

$275M loss

1995

#1 in profitability

1996

#1 in profitability

1997

#1 in profitability

1994
1995
1996
1997

Profit

Stock

$15M
$60M
$80M
$98M

$74
$114
$146
$205

1993

Losing
money

1996

#1 in growth
and
profitability

1993

Profits = $x

1994
1995
1996

Profits = $8x
Profits = $13x
Profits = $19x

BSC Is Readily Adapted to Non-Profit and

Government Organizations
The Mission
"If we succeed, how
will we look to our
financial donors?

To achieve our vision,

how must we look to
our customers?

To satisfy our customers,

financial donors and mission,
what business processes
must we excel at?"
To achieve our vision, how
must our people learn,
communicate, and work
together?
The Mission, rather than the financial / shareholder objectives,
drives the organizations strategy

Critics
Does Not Provide Recommendations
Resistance from Employees
Not Fully Efficient
Time consuming
High Implementation Costs

Conclusion: the Ingredients of

Highly Successful Balanced
Scorecard Programs
4. Make Strategy a Continuous
Process

1. Leadership From the Top

Create the Climate for Change

Create a Common Focus for

Change Activities

Rationalize and Align the

Organization

2. Make Strategy Everyones Job

Formulate

Communicate

Comprehensive Communication to
Create Awareness
Align Goals and Incentives
Integrate Budgeting with Strategic
Planning
Align Resources and Initiatives

STRATEGY

Execute

Strategic Feedback That Encourages

Learning
Executive Teams Manage Strategic
Themes
Testing Hypotheses, Adapting, and
Learning

Navigate

3. Unlock and Focus Hidden Assets

Reengineer Work Processes

Create Knowledge Sharing Networks

Thank you for

listening
Q&A Time