Balanced scorecard is a strategy performance management tool a semistandard structured. The approach combines traditional financial measures with nonfinancial ones that drive business outcomes, so that organizations focus on the future and act in their longterm best interest. Commentary transforming the balanced scorecard from performance measurement to strategic management. The article was based on a multicompany research project to study performance measurement in companies whose intangible assets played a central role in value creation nolan norton institute, 1991. Norton and kaplans other book, strategy map deals with the development of one of. Kaplans most popular book is the balanced scorecard. The balanced scorecard bsc is an approach to performance measurement introduced by dr.
In the same way that you cant fly an airplane with just one instrument gauge, you cant manage a company with just one kind of performance measure. Marco giorgino, in performance measurement and management for engineers, 2015. The balanced scorecard measures that drive performance. Norton harvard business school publishing, 2000 industrial productivity 8 pages.
A similar approach is followed by kaplan and norton in designing the balanced scorecard in which four distinct perspectives of performance are. In 1990, kaplan and norton led a research study of a lot ofcompanies with the purpose of exploring the newmethods of performance measurement. Using the balanced scorecard as a strategic management system. The purpose of the article is to describe the balanced scorecard concept that the authors developed based on a research project involving 12 companies. The balanced scorecardmeasures that drive performance 1992. Use features like bookmarks, note taking and highlighting while reading the balanced scorecard. Integrating the balanced scorecard and promethee methods for seaports performance evaluation.
The balanced scorecard was originally developed by dr. I believe this was the first article on the balanced scorecard. The balanced scorecard was developed in the early 1990s by two guys at the harvard business school. Kaplan and nortons balanced scorecard approach encourages businesses to analyse and report performance based on four key perspectives financial, customers, internal processes and organisational. Kaplan has 46 books on goodreads with 35355 ratings. Norton is the president of renaissance solutions, inc. In this work, the focus is on creating alignment throughout the organization from the executive team, through operational and supporting units, and ultimately to the frontline employee. Balanced scorecard an overview sciencedirect topics. Robert samuel kaplan born 1940 is an american accounting academic, and emeritus professor of leadership development at the harvard business school, known as cocreator, together with david p.
The balanced scorecard revolutionized conventional thinking about performance metrics. However, since the concept of the bsc is not yet mature, differences in its interpretation and practice have emerged. The balanced scorecard was developed byrobert kaplan and david norton 1992. Alignment is a superb addition to the remarkable series written by professor robert s. Translating strategy into action kindle edition by kaplan, robert s. The methodology relied on kaplan and nortons 1992 bscs. Translating strategy into action hardcover september 1, 1996. Peter drucker introduced management by objectives in his classic 1954 book, the. However, the approach popularized by kaplan and norton, is fundamentally flawed and successful applications, like the unicorn, are rare.
Norton argue that the responsibility for this critical alignment lies with corporate headquarters. One study, that by kaplan and norton 1992, introduced the notion of the bsc system. Read oct 2011 the fourth book in the series by kaplan and norton building on their classic, the balanced scorecard. Harvard business school publishing, 2000 industrial productivity 8 pages.
Strategy execution and the balanced scorecard harvard. The book reflects the earliest incarnations of balanced scorecards. This cited by count includes citations to the following articles in scholar. Balanced scorecard other bibliographies cite this for me. Januaryfebru ra y 1992 the balanced scorecardmeasures that drive performance robert s. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Find all the books, read about the author, and more.
Summary by chris hourigan master of accountancy program university of south florida, fall 2002. Conceptual foundations of the balanced scorecard sciencedirect. In the 2001 book the strategyfocused organization, kaplan and norton transform their balanced scorecard. Financial objectives should be linked to the one corporate strategy with a strong emphasis on the cause and effect relationships that every change can have. Its objective is to translate an organizations mission and vision into actual operational actions strategic planning. Conceptual foundations of the balanced scorecard harvard. More strategic management and corporate finance models. Kaplan coauthored the strategyfocused organization and strategy maps book with his wellrenowned fellow. They realize that no single measure can protives understand that their organizations measure vide a clear performance target or focus attention on. Financial objectives should be linked to the one corporate strategy with a strong emphasis on the causeandeffect relationships that every change can have. Depending on interpretation and practice, many organizations have implemented the bsc to support a wide range of strategic organizational objectives. Although the previous book of kaplan and norton already spent 64 pages on strategy maps, you can find the best and most comprehensive treatment of them including lots of examples in the book on the right. Kaplan and norton recently published strategy maps, the third book.
Kaplan and norton s article wasnt the only paper on the topic published in early 1992 but the 1992 kaplan and norton paper was a popular success, and was quickly followed by a second in 1993. Kaplan accounting, harvard and norton, president of renaissance solutions inc. Kaplan is a professor at harvard university and david p. But often the efforts of individual units are not coordinated, resulting in conflicts, lost opportunities, and diminished performance. Kaplan and norton 1992 introduced the balanced scorecard in the early 1990s to from mba bus501 at yeditepe universitesi. Among the various methodologies proposed to build an indicator scorecard, the most widely used is the bsc kaplan and norton, 1992. Traditionally companies used only shortterm financial performance as the measure of success. Kaplan and norton 1992 introduced the balanced scorecard in. Kaplan and nortons article wasnt the only paper on the topic published in early 1992 but the 1992 kaplan and norton paper was a popular success, and was quickly followed by a second in 1993. Commentary transforming the balanced scorecard from. The key problem that kaplan and norton identified in the business of the day was that many companies tended to manage their businesses based solely on financial measures.
Kaplan is the arthur lowes dickinson professor of accounting at the harvard business school. Translating strategy into action by kaplan, robert s. Kaplan and norton 1992 introduced the balanced scorecard. Kaplan and norton introduced the balanced scorecard method in their 1992. Kaplan and norton describe the innovation of the balanced scorecard as follows. Human nature, of personal identity, section six, part iv, book i, pp. In 1990,kaplan and norton led a research study of a lot ofcompanies with the purpose of exploring the newmethods of performance measurement. Kaplan and norton begin by saying that what you measure is. Kaplan s most popular book is the balanced scorecard. Balanced scorecard basics balanced scorecard institute.
Conceptual foundations of the balanced scorecard 3. The balanced scorecardmeasures that drive performance. In this work, the focus is on creating alignment throughout the organization from the executive team, through operational and supporting units, and. Everyday low prices and free delivery on eligible orders.
Jun 04, 2016 kaplan and norton s balanced scorecard approach encourages businesses to analyse and report performance based on four key perspectives financial, customers, internal processes and organisational. Since then, kaplan and norton have produced several other articles, a series of books, and a consulting company, all committed to elaborating the themes laid down in the initial balanced scorecard article. Norton is the founder and director of the palladium group, the us based organizational strategy consultants. When kaplan and norton first introduced the concept, in 1992, companies were busy transforming themselves to.
If you have not yet read strategy maps, the balanced scorecard and the strategyfocused organization, you should begin with those books before reading this one. Norton born 1941 is an americanborn business theorist, author, senior executive, and a prominent management consultant he graduated from harvard university, meanwhile obtaining a doctorate of business administration. The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve. Linking strategy to operations for competitive advantage by kaplan, robert s. This is the most important perspective of the balanced scorecard since it is the measurement basis of all the others. In a previous paper kaplan and norton 2001b, we described the role for strategy maps and balanced scorecards to develop performance objectives and. The balanced scorecard retains traditional financial measures. For more than 25 years, the balanced scorecard has become widely discussed and applied.
In this book, the authors apply their revolutionary balanced scorecard. Kaplan and norton begin by saying that what you measure is what you get. In addition, it can help provide information on the chosen strategy more. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in longterm capabilities and customer relationships were not critical for. A similar approach is followed by kaplan and norton in designing the balanced scorecard in which four distinct perspectives of performance are brought together. The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. This is the most important boring book ive ever read. A critique of the balanced scorecard as a performance. Norton included anonymous details of this balanced scorecard design in a 1992 article. David norton as a framework for measuring organizational performance using a more balanced set of performance measures.