Using the Balanced Score card as a Strategic

Management System

BY LAKSHAY MEHRA
ROLL NUMBER-876
The Balanced Score Card
Customers
 Internal business processes
Learning & Growth
Financial performance

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Implementing the Score card objectives,
measures, targets & Initiatives
 To achieve our vision, how should we appear to our
customers?
 To satisfy our shareholders and customers, what
business processes must we excel at?
 To achieve our vision, how will we sustain our
ability to change & improve?
 To succeed financially, how should we appear to
our shareholders?

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Achieving long term objectives through
short term actions
 Often the linkage between short term financial
measures and long term strategic objectives is weak
 Because of this weak linkage, strategy implementation
often is ineffective
 Using the balanced score card, companies can
strengthen the linkage between long term strategy and
short term tactics

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Four processes to link long term objectives with
short term actions

 Translating the vision

 Communicating and linking
 Business planning
 Feedback and learning

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Translating the vision
 Helps build a consensus around the company’s vision
and strategy

 Helps arrive at an integrated set of objectives and

measures that describe the long term drivers of
success

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Communicating the linkage
 Helps link strategy to departmental and individual
objectives
 This marks a change in approach from evaluating
departments by financial performance and tying
individual incentives to short term financial goals

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Business Planning
 Enables companies to integrate their business and
financial plans
 Helps in aligning diverse initiatives with strategic goals

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Feedback & Learning
 Builds capacity for strategic learning
 Short term results can be monitored closely
 Strategies can be modified to reflect real time learning

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Possible implementation sequence
 Clarify the vision, build consensus
 Communicate to middle managers

 Develop business unit score cards

 Eliminate non strategic investments

 Launch corporate change programs

 Review business unit score cards

 Refine the vision after re-examining cross business issues

 Communicate the balanced score card to the entire company

 Establish individual performance objectives

 Update long range plan and budget

 Conduct monthly and quarterly reviews

 Conduct annual strategy review

 Link everyone’s performance to the balanced scorecard
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Conclusion

 Balanced score card can be used to:

- clarify and update strategy
- communicate strategy throughout the
company
- align unit and individual goals with the
strategy
- link strategic objectives to long term targets
& annual budgets
- identify and align strategic initiatives
- conduct periodic performance reviews to learn
about and improve strategy
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