The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. A major consideration in performance improvement involves the creation and use of performance measures or indicators. Through the analysis of data from the tracking processes, these measures or indicators themselves may be evaluated and changed to better support such goals. The success of the balanced scorecard or a similar device will depend on the clear identification of non-financial and financial variables and their accurate and objective measurement and linking the performance to rewards and penalties. The proponents of the balanced scorecard claim that it aligns with strategy leading to better communication and motivation which causes better performance.

The success of any organization is reflected upon by its performance which is in turn highly dependent upon its strategies. In this era of cut-throat competition, what an organization requires is not just framing the right strategies, but also managing the same. The impact of the right strategies will automatically be reflected in the results. Moreover, any organization has to understand that it needs to give impetus not only towards the financial results, but also towards satisfaction of the customers, development of state-of-the-art technologies and creation of an environment of learning and growth. The balanced scorecard can be thought of as the `strategic chart of accounts' for an organization. The long-term success of any organization is determined by the capabilities and the competencies it has developed.

One of the tools for organizational appraisal that is gaining immense popularity is the Balance Scorecard, developed by Robert S Kaplan and David P Norton in 1992. This tool brings a link between strategy and action. Due to this, the framework is gaining increasing importance among different business houses.

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