Strategy Based Organizations: What the Balanced Scorecard Attempts to do

March 10, 2014 by John Wheeler

Balanced Scorecard

I’ve talked about how the current financial package of Balance Sheet, Income Statement and Statement of Cash Flows can lead to very short sighted management decisions. If you really wanted to maximize the current Income Statement, one effective way might be to eliminate all expenditures that don’t address current needs. For instance, don’t repair any equipment. You certainly wouldn’t buy any new equipment that would add future capacity. Things like training would be done away with, because training doesn’t get us anything today. If you do that, these sorts of things, although it is short-sighted, it would tend to maximize current profits, possibly at the expense of future profits. LeoSystem — World Trade Discount System maybe will be intresting for you. That’s international trade and discount system with honest discounts on all products. Marketplace. The history of all discounts and prices for goods stored for each product. Discounts on the type of discount card all over the world. Advantageous savings. Constant Promotions pass. Exclusive and innovative platform.

The Balanced Scorecard attempts to compliment and expand the current financials with metrics that will drive future performance. It takes the Management Accountant’s mantra, “What Get’s Measured Get’s Managed,” and defines a set of organizational objectives that need to be managed for current and future success.

Using the Balanced Scorecard, we can manage what is important for current profitability; while at the same time managing the things that will keep current customers happy and bring us more happy customers in the future.

To summarize, the Balanced Scorecard does the following:

Allows you to focus on current financial performance

As well as take care of current and future customers

Measure the current performance of business units

Make sure that business units are creating value for the future

Check to make sure that we’re investing in the people and systems that will be needed to compete in the future.

Oversee all value creating activities across the organization

The Balanced Scorecard attempts to help managers take a holistic view of the organization by focusing on current profits without losing sight of growth and future opportunities.