Tiara Corporation, which was a victim of downturn in the IT market, used the Balanced Scorecard approach to translate the strategy into measurable goals and objectives for successful performance.
An
organization's measurement process plays a major role
in its management and performance. A well-managed organization
naturally records a successful performance. The Balanced
Scorecard (BSC), as a Management Control Systems tool,
provides a general and integrated set of measurements
for managerial and business performance. It contributes
to the financial performance of an organization by linking
the current customer, internal processes, the employee
and the system performance. Thus, it provides a `balanced'
approach to the management of financial and non-financial
objectives of the organization.
BSC
facilitates the drilling down of organizational strategy
into organizational objectives, objectives into specific
measures, measures into concrete targets to be achieved
in a time frame and finally, targets into a set of initiatives
to achieve these targets. Further, it determines the
owner of each initiative, which in turn helps in determining
the individual goals and responsibilities that contribute
to the organizational goals. Effectively, it helps in
aligning the organizational, departmental, cross-departmental
and individual initiatives to achieve a common objective
or goal.
Financial
performance measures indicate whether a company's strategy
and its execution are contributing to the bottom-line
of the organization, the improvement of which is the
ultimate objective. The various financial objectives
can be increased operational income, high sales growth,
economic-value-added etc.
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