Balanced Scorecard


The balanced scorecard (BSC) is a strategic planning system that is used by management in businesses and organizations to relate business activities with the strategy of the business or organization. BSC improves internal and external communications and it also monitors the performance of the organization with the strategic goals that have been set. The BSC provides a framework that not only provides performance measurements, but shows planners what should be accomplished and measured. The BSC is composed of four perspectives which are learning & growth, internal, customer, and financial. Also a strategy map is used to show how the measures relate with one another to bring value to a business or an organization.


It was developed by Drs. Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial measures. This provided managers and executives a more “balanced” view of the organization or business. Balance scorecard was coined in the early 1990s which included the work done by GE’s performance measurement in the 1950’s  and French process engineers who created the Tableau de Bord which is essentially a dashboard of financial measures. Originally the BSC was made to find performance measurements, but later on was utilized as strategic management planning system.


Financial:  The financial perspective is suppose to look at the relevant financial measures like how to increase sales or how much profit we are making?

Customer: The customer perspective looks at on how customer view the organization or a business.

Internal:  Internal process perspective looks at what is relevant and relates to what the business should work on like shipping times or finished goods forecasting.

Learning & Growth:  The learning & growth perspective would focus on measures like training for employees.

Strategy Map
A strategy Map is a table that shows a visual representation of the strategy of an organization  and it shows how the organization plans on achieving its strategy by a linked chain of continuous improvements.
With the BSC the strategy map shows  the cause and effect relationships between the different strategic objective and their measures.