Balanced Scorecard
The balanced scorecard is a strategic performance management framework that measures organizational success across four perspectives: financial, customer, internal processes, and learning and growth.
Explanation
Developed by Kaplan and Norton, the balanced scorecard translates strategy into measurable objectives across four perspectives. The financial perspective tracks traditional metrics like revenue growth and ROI. The customer perspective measures satisfaction, retention, and market share. Internal processes focus on operational efficiency, quality, and innovation. Learning and growth addresses employee capabilities, technology, and organizational culture. The four perspectives are linked through cause-and-effect relationships.
Key Points
- •Four perspectives: financial, customer, internal processes, learning and growth
- •Links strategy to measurable key performance indicators (KPIs)
- •Cause-and-effect: learning drives processes, processes drive customers, customers drive financials
Exam Tip
Learning and growth is the foundation — improvements there cascade upward through internal processes, customer outcomes, and ultimately financial results.
Frequently Asked Questions
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