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Balanced Scorecard Memorandum

In: Business and Management

Submitted By lkm0407
Words 662
Pages 3
Internal Memorandum
TO: Senior Managers
DATE: March 23, 2014
SUBJECT: Implementation of balanced scorecard

WHAT IS A BALANCED SCORECARD
A balanced scorecard is a flexible framework for measuring and reporting performance while balancing financial and non-financial measures. The balanced scorecard links performance to rewards and gives recognition to the link between performance measures and organizational goals and objectives. The development of the balanced scorecard is accredited to Robert Kaplan and David Norton as they determined key performance indicators to include: Financial, customers, internal business processes, innovation and learning. With the flexibility of the balanced scorecard performance indicators are easily tailored to the organization using the BSC (Horgren, 2011).
WHY THE CHANGE
Historically our organization has measured success purely based on our financial perspectives. Financials are certainly a large concern for our organization however they are not our only concern. In order for our company to be truly successful other business characteristics should be in the forefront of all our minds. Several of these “other” business characteristics include non-financially focused items like customer satisfaction, employee satisfaction and retention rates, employee training, innovation and learning opportunities, as well as streamlining business processes (Horngren, 2011). These other activities have a large potential for generating profit for our company in the long run. By excelling within these categories there is better potential for our business to excel in profit and prestige. I encourage all senior managers to reflect on how your department operates and what can be done to increase its efficiency within these categories and any other categories that you deem important to improving our company performance. One of the benefits to

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