What is the business purpose of the balanced scorecard, and how does it benefit an organization?

Answer 1

The purpose of the balanced scorecard is to link the perspectives of an organization's four basic stakeholder groups (financial [investors], learning and growth [employees], internal business processes, and customers) with the organization's mission and vision, performance measures, strategic plan, and resources. The balanced scorecard allows an organization to determine each of the stakeholders' objectives in order to translate them into performance measures that have specific, quantifiable performance targets. Thus, managers should be able to see how their actions contribute to the achievement of organizational goals and to understand how their compensation is related to their actions.