Despite of having three generations of Balanced Scorecards in use Cobbold and

Despite of having three generations of balanced

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Despite of having three generations of Balanced Scorecards in use (Cobbold and Lawrie, 2002), their philosophy have not changed much during the last twenty years and, therefore, proposed measures are still completely valid. The basic idea is that there are for important questions that a Balanced Scorecard must answer (Kaplan and Norton, 1992):
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- How do customers see us? (Customer Perspective) - What must we excel at? (Internal Perspective) - Can we continue to improve and create value? (Learning and Growth Perspective) - How do we look to shareholders? (Financial Perspective) As we can see, these four perspectives combine financial and non-financial measures and, by doing so, can evaluate if an organization is accomplishing its goals either from a financial point of view or for a non quantitative point of view (e.g., do our products have the desired quality?). As we will see, even if they are shown as different categories, or perspectives, truth is that, as one could expect from the above explanations, all measures that can help us to answer these four questions are deeply related between them. In their article "The Balanced Scorecard- Measures that drive Performance" Kaplan and Norton make a series of suggestions based on what is more important to each perspective, starting to the customers' one. Why? The reason should be obvious: customers tends to acquire those products that meet their expectations and those organizations that provide them grow while those that don't provide them almost always end disappearing. They summarize customers' concerns in four categories: time, quality, performance and service, and cost. So it is obvious that, from the customers' perspective, the organization should measure those factors that give its managers the best idea about if customers' are satisfied why its performance or not. From an internal perspective, then, it is easy to deduce that those categories where the organization must excel are the same four than in the customers perspective. In the same way, the learning and growth perspective must focus on different ways of improving those different categories and it is in this category where the employees expertise, information and technology deployment have been included. Finally, the financial perspective can appear to be measuring completely different subjects but truth is that what is measuring are the consequences of the indicators above mentioned.
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On a final note, not all the indicators have the same importance. For example, if an user want to buy a custom car they will probably have very high requisites on the quality and performance categories while time and cost may not be that important while if another user is buying a family car their major worries will probably be cost and, again, performance but may not mind the utilization of lower quality products.
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