Explain the balanced scorecard (BSC) approach to managing performance, providing examples where appropriate. What are the main benefits and limitations of the BSC?

 

Answer:

Explain the balanced scorecard (BSC) approach to managing performance.

Answer:

A balanced scorecard is a strategic management performance statistic that assists businesses in identifying and improving internal processes in order to improve their external outcomes. It analyzes historical performance data and gives businesses advice on how to make better decisions in the future. Balanced scorecards enable businesses to track their intellectual capital alongside financial data in order to identify achievements and failures in internal operations. Management may discover inefficiencies, make strategies for improvement, and convey goals and priorities to their staff and other stakeholders by consolidating data from previous performance in a single report. By combining information into a single report. Companies may save time, money, and resources by effectively training employees, communicating with stakeholders, and improving their market financial position.

Provide examples where appropriate.

Answer:

A case in point is in the case of financial institutions like banks. For example, banks frequently contact consumers and conduct surveys to assess how well they are performing in terms of customer service. These surveys feature questions on recent banking visits, such as wait times, contact with bank employees, and general satisfaction. Customers may also be asked to submit comments for improvement. Bank management may use this information to assist retrain personnel if there are service difficulties or to detect any concerns consumers have with goods, procedures, and services.

In other circumstances, businesses may hire other entities to create reports for them. One of the most common instances of a balanced scorecard is the survey companies. These companies delivers data, analytics, and advice services to assist businesses in identifying problems in their operations and making future changes. This is done through surveys. The results are collated and sent to the company that commissioned the survey.

What are the main benefits and limitations of the BSC?

Answer:

Benefits

• There are several advantages to adopting a balanced scorecard. The capacity to consolidate information into a single report, which may save time, money, and resources, is one of the most significant benefits. It also enables businesses to measure their success in terms of service and quality, in addition to financial data. Scorecards also enable businesses to identify and eliminate inefficiencies.
• A balanced scorecard is a logical, systematic method for assisting your firm's executives in ensuring that all aspects of the company are covered in an easy-to-understand manner. It keeps your goals at the forefront, employs precise measures to assess progress, and follows initiatives to track actions.
• When properly implemented, all divisions and departments should be aligned with a similar plan and the Balanced Scorecard aids in this process.
• It simplifies the communication of your plan.
• The BSC is built on assessing your plan on a frequent basis, which you can only accomplish if your plan is structured. 

Limitations

• It may be a daunting structure at first.
• You may be tempted to duplicate an example map, but remember that your plan is completely unique to you
• To be effective, significant leadership support is required.
• Transitioning to a Balanced Scorecard approach can often generate misunderstanding within a business. Rather than taking the effort to adjust, some leaders chose to leave the BSC and go back to their old methods.