THE BALANCED SCORECARD
The balanced scorecard translates an organization’s mission and strategy into a comprehensive set of performance measures that provides the framework for implementing its strategy (Kaplan and Norton, 1996a,b). The balanced scorecard does not focus solely on achieving financial objectives. It also highlights the non-financial objectives that an organization must achieve in order to meet its financial objectives. The balanced score-card measures an organization’s performance from four key perspectives: (1) financial, (2) customer, (3) internal business process, and (4) learning and growth. A company’s strategy influences the measures used in each of these perspectives.
The balanced scorecard gets its name from the attempt to balance financial and non-financial performance measures to evaluate both short-run and long-run performance in a single report. Consequently, the balanced scorecard reduces managers’ emphasis on short-run financial performance, such as quarterly earnings. Why? Because the non-financial and operational indicators measure fundamental changes that a company is making. The financial benefits of these changes may not be captured in short-run earnings, but strong improvements in non-financial measures signal the prospect of creating economic value in the future. For example, an increase in customer satisfaction signals higher sales and income in the future. By balancing the mix of financial and non-financial measures, the balanced scorecard focuses management’s attention on both short-run and long-run performance (Norreklit and Mitchell, 2007). The big question is how to implemented the balanced scorecard to the Non- Profit Organization easly ?? (PPAk)