The role of balanced scorecard in creating an effective management system in an organization

Balanced Scorecard system brought in revolutionary changes in every aspect of management in an organization. It has contributed significantly in improving the identification of KRAs (Key Result Areas) and KPIs (Key Performance Indicators) so as to align them to the organizational objectives/goals. It has also brought in the recognition and importance of non-financial factors in assessing the organization's performance. Initially, organizations were only focusing their concentration on improvement of financial parameters like "Revenue", IFO and Net worth etc. But with the concept of Balanced Scorecard coming in, other perspectives like "Customer", "Learning and Growth" and "Business Processes" also began to be recognized as important. The business activities of the organization started getting aligned to the Vision and Strategy of the organization. Balance scorecard served as a very important tool in the hands of management for strategic planning and management system. It is also called a Performance Measurement and Performance Management tool that links the current actions of an organization to its long term goals.

In this paper, I have tried to give a snapshot of Balanced Scorecard and the way it helps organizations in creating an effective and more meaningful management system.