Use of Balanced Scorecard
A Balanced Scorecard is an example of a closed-loop controller or cybernetic control used for strategy implementation management. Closed-loop or cybernetic control is the place where the actual performance is measured, the measured value is compared to the reference value and, based on the difference between the two corrective interventions, is performed as needed.
This control requires three things that are effective:
In the context of strategic management, all three of these inherent closed-loop control elements must derive from the organization's strategy and should also reflect the ability of the observer to monitor performance and then intervene - and both may be limited. Originally, the Balanced Scorecard was offered as a general-purpose management system. Subsequently, it was especially promoted as a strategic management approach. The Balanced Scorecard has recently become an integral part of a structured approach to corporate strategic management.
Two ideas that underpin the design of today's balanced scorecards relate to the fact that it is easier to choose which data to observe and to ensure that the data selection matches the ability of the observer to interfere.
A Balanced Scorecard is an example of a closed-loop controller or cybernetic control used for strategy implementation management. Closed-loop or cybernetic control is the place where the actual performance is measured, the measured value is compared to the reference value and, based on the difference between the two corrective interventions, is performed as needed.
This control requires three things that are effective:
- the choice of data to determine
- set the data reference value,
- ability to take corrective action.
In the context of strategic management, all three of these inherent closed-loop control elements must derive from the organization's strategy and should also reflect the ability of the observer to monitor performance and then intervene - and both may be limited. Originally, the Balanced Scorecard was offered as a general-purpose management system. Subsequently, it was especially promoted as a strategic management approach. The Balanced Scorecard has recently become an integral part of a structured approach to corporate strategic management.
Two ideas that underpin the design of today's balanced scorecards relate to the fact that it is easier to choose which data to observe and to ensure that the data selection matches the ability of the observer to interfere.
