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Balanced Scorecard and Its Application to Not-For-Profit Organisations - Essay Example
Finance & Accounting
Pages 4 (1004 words)
Name: Course: Instructor: Date: Balance Scorecard and its application to not-for-profit organisations Introduction The Balanced Scorecard (BSC) is a strategic management technique that is used to communicate and evaluate the achievement of the mission and strategy of the organisation (Drury 2009)…
These measures form the framework for the implementation of the strategy. BSC obtained its name from the attempt to balance both financial and nonfinancial performance measures. While traditional approaches to strategy focused on the financial aspect of the business the balanced scorecard looks at both the financial and non-financial aspects of the organisation. Finkler (2010, p. 299) indicates that the balance scorecard approach monitors how well the organisation is achieving its goals based on four critical perspectives: financial perspective; customer perspective; internal business perspective; and learning and growth perspective. Olve and Sjostrand (2006, p. 1) indicates that a good scorecard documents a strategic logic which represents a cause and effect relationship between current activities and long-term performance. Critical Evaluation of the Balanced Scorecard and its Development The concept of a balanced scorecard can be traced to various sources including Peter Drucker’s “management by objectives” (Balanced Scorecard Review n.db). It has evolved from being a performance management tool in 1992 to being a strategic performance management system in 1996 (Balanced Scorecard Review n.da). ...
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