Powered by Leeds Metropolitan University
Business Studies Resources Popular resources on the {my channel} blog Resource tags for the blog RSS Feed for the blog Twitter feed for this blog Teacher Email Resource Newsletter Category listing for this blog Business Studies Blog Home Page

Balanced Scorecard - Perspectives

Author: Jim Riley  Last updated: Sunday 23 September, 2012

The four perspectives are:

  • Financial perspective - how does the firm look to shareholders?
  • Customer perspective - how do customers see the firm?
  • Internal perspective - how well does it manage its operational processes?
  • Innovation and learning perspective – can the firm continue to improve and create value? This perspective also examines how an organisation learns and grows.

For each of four perspectives it is necessary to identify indicators to measure the performance of the organisations.

More on the financial perspective
This is concerned with the shareholders view of performance.
Shareholders are concerned with many aspects of financial performance: Amongst the measures of success are:

  • Market share
  • Revenue growth
  • Profit ratio
  • Return on investment
  • Economic value added
  • Return on capital employed
  • Operating cost management
  • Operating ratios and loss ratios
  • Corporate goals
  • Survival
  • Profitability
  • Growth
  • Process cost savings
  • Increased return on assets
  • Profit growth
  • Measures
  • Cash flow
  • Net profitability ratio
  • Sales revenue
  • Growth in sales revenue
  • Cost reduction
  • ROCE
  • Share price
  • Return on shareholder funds

More on the customer perspective
How do customers perceive the firm?

This focuses on the analysis of different types of customers, their degree of satisfaction and the processes used to deliver products and services to customers.

Particular areas of focus would include:

  • Customer service
  • New products
  • New markets
  • Customer retention
  • Customer satisfaction
  • What does the organisation need to do to remain that customer’s valued supplier?

Potential goals for the customer perspective could include:

  • Customer satisfaction
  • New customer acquisition
  • Customer retention
  • Customer loyalty
  • Fast response
  • Responsiveness
  • Efficiency
  • Reliability
  • Image

The following metrics could be used to measure success in relation to the customer perspective:

  • Customer satisfaction index
  • Repeat purchases
  • Market share
  • On time deliveries
  • Number of complaints
  • Average time to process orders
  • Returned orders
  • Response time
  • Reliability
  • New customer acquisitions
  • Perceived value for money

More on the internal perspective

This seeks to identify:

  • How well the business is performing.
  • Whether the products and services offered meet customer expectations.
  • The critical processes for satisfying both customers and shareholders.
  • Activities in which the firm excels? 
  • And in what must it excel in the future?
  • The internal processes that the company must be improved if it is to achieve its objectives.

This perspective is concerned with assessing the quality of people and processes.

Potential goals for the internal perspective include:

  • Improve core competencies
  • Improvements in technology
  • Streamline processes
  • Manufacturing excellence
  • Quality performance
  • Inventory management
  • Quality
  • Motivated workforce

The following metrics could be used to measure success in relation to the internal perspective:

  • Efficiency improvements
  • Reduction in unit costs
  • Reduced waste
  • Improvements in morale
  • Increase in capacity utilisation
  • Increased productivity
  • % defective output
  • Amount of recycled waste
  • Amount of reworking

More on the innovation and learning perspective
This perspective is concerned with issues such as:        

  • Can we continue to improve and create value?
  • In which areas must the organisation improve?
  • How can the company continue to improve and create value in the future?
  • What should it be doing to make this happen?

Potential goals for the innovation and learning perspective include:

  • New product development
  • Continuous improvement
  • Technological leadership
  • HR development
  • Product diversification

The following metrics could be used to measure success in relation to the innovation and learning perspective:

  • Number of new products
  • % sales from new products
  • Amount of training
  • Number of strategic skills learned.
  • Value of new product in sales
  • R&D as % of sales
  • Number of employee suggestions.
  • Extent of employee empowerment 




Other Business Study Resources You Might Like on tutor2u


Revision quizzes for business students

Starting a Business

Sources of Finance for a Startup
Franchising
Cash Flow Forecasting for a Startup
Creating & Protecting Business Ideas
Startups and Understanding the Market
Market Research for a Startup
Locating the Startup Business
Choosing a Legal Structure for a Startup
Employing People in a Startup
Generating and Protecting a Business Idea
Using Breakeven in Decision-Making

Finance

Revenues
Breakeven Basics
Costs, Revenues and Profits
Business Costs
Using Budgets
Using Breakeven in Decision-Making
Investment Appraisal Basics
Financial Strategies
Measuring and Improving Profit
Improving Cash Flow
Working Capital
Balance Sheet
Income Statement
Financial Efficiency Ratios
Profitability Ratios and ROCE
Liquidity Ratios
Gearing

Marketing

Competition
Products & Brands
Place (Distribution)
Promotion
Pricing
Price Elasticity of Demand

Business Organisation

Basics of Business Growth
Business Activities
Legal Structure Basics
Franchising
Sole Traders and Partnerships
Limited Companies
Generating and Protecting a Business Idea
Organisational Structures

People

Working in Teams
Communication Basics
Communication Methods
Workforce Planning
Recruitment, Selection & Training
Employee Motivation
Organisational Structures

Operations

Operational Objectives
Critical Path Analysis
Scale and Resource Mix
Lean Production
Capacity Management
Customer Service Basics
Managing Quality
Operational Decision-making
Using Technology in Operations
Working with Suppliers

Economic Environment

Economic Sectors
Government Spending & Taxation
Inflation
Unemployment
Interest Rates & Monetary Policy

Business Strategy

Leadership styles
Business Culture
Change Management






Add your comments and share this study note:

blog comments powered by Disqus

 

Tutor2u support for students
Teaching support and resources
Search for resources on tutor2u

Law



Refine Search by Subject
A Level Economics
Business Studies
Geography Give It A Go!
History Law
IB Diploma Politics
Religious Studies Sociology

Order Search Results By


Follow tutor2u on Twitter
   
   

tutor2u Home Page | Online Store | About tutor2u | Copyright Info | Your Privacy | Terms of Use

tutor2u

Working with Our Partners

 Zondle - Games for LearningVue Cinemas | Moneypenny | Nexcess | Really Simple Systems 

Boston House | 214 High Street | Boston Spa | West Yorkshire | LS23 6AD | Tel +44 0844 800 0085 | Fax +44 01937 529236

Company Registration Number: 04489574 | VAT Reg No 816865400

tutor2u is proud to sponsor TABS Cricket Club and the Wetherby Cricket League as part of its commitment to invest in local junior sport