1. The Balanced Scorecard Approach

2. Limitations of Financial Indicators
Financial indicators are very important in business evaluation. But they are not enough!
History oriented
Do not suggest strategies and methods for development
Do not timely reflect changes
Do not capture the intangible aspects of the firm (values, culture, etc.)

3. The Balanced Scorecard
Professors Kaplan and Norton, Harvard University, first published in 1992
The central idea is that business evaluation and development needs to base on different perspectives

4. The Balanced Scorecard
A management system that is based on indicators of different perspectives
Four perspectives:
Customer
Finance
Internal
Growth and development
A long-term development requires a balance between these perspectives

5. The Balanced Scorecard
Financial
Perspective
Customer
Perspective
Internal
Perspective
Learning
Perspective

6. Applying the Balanced Scorecard
From individual to team and organizational levels
For each perspective:
Goals
Measures

7. Example of a Balanced Scorecard
Choosing objectives
Identifying appropriate measures
Balancing different perspectives in setting objectives (indicators)

8. Special Notes
The four objectives and indicators of the perspectives should relate to and reinforce each other
Good combination of generic outcomes (e.g., customer satisfaction) and performance driver (e.g., short time delivery)
Ultimately, causal paths from all measures on a Scorecard should be linked to financial objectives
Balanced Scorecard only contains strategic measures (not diagnostic measures)

9. Samsung Case
Applying BSC to evaluate how well Samsung is doing, based on the article
Identify key objectives, measures, and indicators for Samsung in order to resolve the weaknesses