Research Methods - Dissertation Proposal (Balanced Scorecards - Why to Essay - 1

Research Methods - Dissertation Proposal (Balanced Scorecards - Why to go for it, how to develop and implement, how effective are they ) - Essay Example Norton in 1992, in an article that appeared in the Harvard Business Review titled: â€Å"The Balanced Scorecard: Measures that drive performance.† This management strategy was devised in response to the fact that while most financial measures were able to track the past performance of a business, they were unable to effectively assess the intangible factors that contributed towards ensuring that the business retained a competitive advantage in the marketplace (Rutan 1996). The Balanced Scorecard is therefore a strategic measure of performance, not only from the financial point of view but from a more broad based perspective that also enables accurate projection of future goals and the degree of adherence of the business to those goals. The concept of performance measures was earlier developed by Peter Drucker as Management by Objectives (Birnbaum 2000:43-52). Employees in every department were to set out short-term objectives, which were to be achieved within a certain deadlin e. Companies such as General Motors and RCA Foods adopted this method of management, but it was found to be ineffective due to the failure to take into account the unpredictable human factor in actual practice. There are two underlying principles that drive the Balanced Scorecard. The first one is that adhering to strictly financial measures hinders a company’s ability to formulate long term value. The second principle is that what gets measured is what actually gets done. (www.tqe.com). Therefore, while the Balanced Scorecard retains traditional financial measures, it also includes such factors as customers, suppliers, technology, process, employees and innovation. Therefore, this strategy identifies four distinct areas that need to be analyzed: Kaplan and Norton advocate the design of a comprehensive set of develop a scorecard, to evaluate the status of the business and what needs to be done to improve or enhance the scorecard to make it balanced in all the four fronts