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Business

Study Notes

Balanced Scorecard (Kaplan & Norton)

Level:
AS, A Level, IB
Board:
AQA, OCR, IB, Eduqas

Kaplan & Norton's Balanced Scorecard model was developed in the early 1990's as an attempt to help firms measure business performance using both financial and non-financial data.

The aim of the Balanced Scorecard was "to align business activities to the vision and strategy of the business, improve internal and external communications, and monitor business performance against strategic goals."

The balanced scorecard provides a relevant range of financial and non-financial information that supports effective business management.

Background to the Balanced Scorecard:

  • No single measures can give a broad picture of the organisation's health.
  • So instead of a single measure why not a use a composite scorecard involving a number of different measures.
  • Kaplan and Norton devised a framework based on four perspectives – financial, customer, internal and learning and growth.
  • The organisation should select critical measures for each of these perspectives.
The Four Perspectives of the Balanced Scorecard
The Balanced Scorecard - Explained

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