What are some of the arguments for and against adopting the balanced scorecard approach? Explain and then provide several examples of organizations that have adopted the balanced scorecard performance measurement system.
What will be an ideal response?
The balanced scorecard is a performance measurement system linking financial performance objectives to specific strategic objectives that derive from a company's business model. It maps out the key objectives of a company, with performance indicators, along four dimensions:
* Financial: listing financial objectives
* Customer: objectives relating to customers and the market
* Internal process: objectives relating to productivity and quality
* Organizational: objectives concerning human capital, culture, infrastructure, and innovation
Done well, a balanced scorecard may provide a company's employees with clear guidelines about how their jobs are linked to the overall objectives of the organization, so they can contribute most productively and collaboratively to the achievement of these goals.
Despite its popularity, the balanced scorecard is not without limitations. Importantly, it may not capture some of the most important priorities of a particular organization, such as resource acquisition or partnering with other organizations. Further, the value of the balanced scorecard approach, as with most strategy tools, is contingent on implementation and follow-through as much as on substance. As noted in Chapter 2, examples of organizations that have successfully adopted the balanced scorecard approach include 7-Eleven, Ann Taylor Stores, Allianz Italy, Wells Fargo Bank, Ford Motor Company, Verizon, ExxonMobil, Pfizer, DuPont, Royal Canadian Mounted Police, U.S. Army Medical Command, and over 30 colleges and universities.
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