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The balanced scorecard : measures that drive performance
17 Apr 2015-
TL;DR: A "balanced scorecard" is developed, a new performance measurement system that gives top managers a fast but comprehensive view of the business and complements those financial measures with three sets of operational measures having to do with customer satisfaction, internal processes, and the organization's ability to learn and improve.
Abstract: Frustrated by the inadequacies of traditional performance measurement systems, some managers have abandoned financial measures like return on equity and earnings per share. "Make operational improvements and the numbers will follow," the argument goes. But managers do not want to choose between financial and operational measures. Executives want a balanced presentation of measures that allow them to view the company from several perspectives simultaneously. During a year-long research project with 12 companies at the leading edge of performance measurement, the authors developed a "balanced scorecard," a new performance measurement system that gives top managers a fast but comprehensive view of the business. The balanced scorecard includes financial measures that tell the results of actions already taken. And it complements those financial measures with three sets of operational measures having to do with customer satisfaction, internal processes, and the organization's ability to learn and improve--the activities that drive future financial performance. Managers can create a balanced scorecard by translating their company's strategy and mission statements into specific goals and measures. To create the part of the scorecard that focuses on the customer perspective, for example, executives at Electronic Circuits Inc. established general goals for customer performance: get standard products to market sooner, improve customers' time-to-market, become customers' supplier of choice through partnerships, and develop innovative products tailored to customer needs. Managers translated these elements of strategy into four specific goals and identified a measure for each.
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TL;DR: It is concluded that knowledge of the relationship between MCS and strategy is limited, providing considerable scope for further research.
Abstract: This paper reviews research that studies the relationship between management control systems (MCS) and business strategy. Empirical research studies that use contingency approaches and case study applications are examined focusing on specific aspects of MCS and their relationship with strategy. These aspects include cost control orientation, performance evaluation and reward systems, the effect of resource sharing, the role of MCS in influencing strategic change and the choice of interactive and diagnostic controls. More contemporary approaches to the relationship between performance measurement systems and strategy are also considered. It is concluded that our knowledge of the relationship between MCS and strategy is limited, providing considerable scope for further research. A series of future research questions is presented.
1,313 citations
TL;DR: In this paper, the authors provide an overview of the various issues related to environmental (green) supply chain management performance measurement, and identify a number of issues that need to still be addressed.
Abstract: Purpose – To introduce and provide an overview of the various issues related to environmental (green) supply chain management performance measurement.Design/methodology/approach – The work relies on experiences, case studies and other literature related to performance measurement in environmental supply chains. It seeks to integrate works in supply chain management, environmental management, and performance management into one framework. A systems framework forms the discussion outline with a focus on controls/pressures, inputs, tools, and outputs as major categories for evaluation and review.Findings – Provides an integrative framework for study, design and evaluation of green supply chain management performance tools. The findings also identify a number of issues that need to still be addressed.Research limitations/implications – We have only one design of the issues in which numerous categorizations could be provided. There is limited research in this area and new and current models/developments can pr...
1,304 citations
Cites background from "The balanced scorecard : measures t..."
...It provides feedback on internal business processes and external outcomes in order to continuously improve strategic performance and results (Kaplan and Norton, 1992)....
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TL;DR: In this article, a tentative theory about how performance measures can be employed to foster improvement (which is the core purpose behind the other seven), public managers will be unable to decide what should be measured.
Abstract: Performance measurement is not an end in itself. So why should public managers measure performance? Because they may find such measures helpful in achieving eight specific managerial purposes. As part of their overall management strategy, public managers can use performance measures to evaluate, control, budget, motivate, promote, celebrate, learn, and improve. Unfortunately, no single performance measure is appropriate for all eight purposes. Consequently, public managers should not seek the one magic performance measure. Instead, they need to think seriously about the managerial purposes to which performance measurement might contribute and how they might deploy these measures. Only then can they select measures with the characteristics necessary to help achieve each purpose. Without at least a tentative theory about how performance measures can be employed to foster improvement (which is the core purpose behind the other seven), public managers will be unable to decide what should be measured. Everyone is measuring performance. 1 Public managers are measuring the performance of their organizations, their contractors, and the collaboratives in which they participate. Congress, state legislatures, and city councils are insisting that executive-branch agencies periodically report measures of performance. Stakeholder organizations want performance measures so they can hold government accountable. Journalists like nothing better than a front-page bar chart that compares performance measures for various jurisdictions—whether they are average test scores for the city’s schools or FBI uniform crime statistics for the state’s cities. Moreover, public agencies are taking the initiative to publish compilations of their own performance mea
1,277 citations
TL;DR: The change in hospital funding with diagnosis related groups (DRG), medical advances as well as demographic changes will call for new quantitative and qualitative standards imposed on German hospitals.
Abstract: The change in hospital funding with diagnosis related groups (DRG), medical advances as well as demographic changes will call for new quantitative and qualitative standards imposed on German hospitals. Increasing costs and competition in the health care sector requires new and innovative strategies for resource management. Today's policy is mainly defined by rationing and intensified workload. The introduction of DRGs will presumably further constrict management perspectives on pure financial aspects. However, to ensure future development, compassionate services and continued existence of hospitals, a balance of seemingly conflicting perspectives, such as finance, customer, process, learning and growth are of utmost importance. Herein doctors and nurses in leading positions should play a key role in changing management practice. For several years the balanced scorecard has been successfully used as a strategic management concept in non-profit organizations, even in the health care sector. This concept complies with the multidimensional purposes of hospitals and focuses on policy deployment. Finally it gives the opportunity to involve all employees in the original development, communication and execution of a balanced scorecard approach.
1,258 citations
TL;DR: In this paper, the authors trace the conceptual evolutionary path of theories on corporate social responsibility and reflect on the implications of the development of these theories, and suggest that future research needs to refocus on basic research in order to develop conceptual tools and theoretical mechanisms that explain changing organizational behavior from a broader societal perspective.
Abstract: This study aims to trace the conceptual evolutionary path of theories on corporate social responsibility (CSR) and to reflect on the implications of the development. The retrospection has revealed that the trend has been a progressive rationalization of the concept with a particular focus on tighter coupling with organizations’ financial goals. Rationalization involves two broad shifts in the conceptualization of CSR. First, in terms of the level of analysis, researchers have moved from the discussion of the macro-social effects of CSR to organizational-level analysis of CSR's effect on profit. Next, in terms of theoretical orientation, researchers have moved from explicitly normative and ethics-oriented arguments to implicitly normative and performance-oriented managerial studies. Based on the retrospection, the limitations of the current state of CSR research that places excessive emphasis on the business case for CSR are outlined, and it is suggested that future research needs to refocus on basic research in order to develop conceptual tools and theoretical mechanisms that explain changing organizational behavior from a broader societal perspective.
1,244 citations
Cites background from "The balanced scorecard : measures t..."
...Successful management of a large firm now requires paying closer attention to the various aspects of corporate performance and engaging its internal and external stakeholders strategically (Kaplan and Norton 1992; Porter and Kramer 2002)....
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