Norton introduced the balanced scorecard, a revolutionary performance measurement system that allowed. The article was based on a multicompany research project to study performance measurement in companies whose intangible assets played. Converting intangible assets into tangible outcomes. How strategy maps frame an organizations objectives. In accordance with kaplan and norton 1992, kaplan and norton 1996, kaplan et al. Converting intangible assets into tangible outcomestext only1st first editionhardcover2004 david. Kaplan and norton define a strategy map as a logical comprehensive architecture for describing strategy. Focusing your organization on strategywith the brilliantbut. The balanced scorecard economics bibliographies cite this.
Balanced scorecard is a strategy performance management tool a semistandard structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. The bsc technique was developed by kaplan and norton 1992, 1996 to combine financial control measures with nonfinancial control measures. Conceptual foundations of the balanced scorecard sciencedirect. Traditionally companies used only shortterm financial performance as the measure of success. The article is an adapted excerpt from strategy maps. Measuring the strategic readiness of intangible assets request pdf. Depending on interpretation and practice, many organizations have implemented the bsc to support a wide range of strategic organizational objectives. The phrase balanced scorecard primarily refers to a performance management. Behind this abysmal track record lies an undeniable fact. It is used for implementing the mission and objectives of an organisations business strategy. Norton born 1941 is an american business theorist, business executive and management consultant, known as cocreator, together with robert s. David norton and i introduced the balanced scorecard in a 1992 harvard business. Kaplan and norton 2004 suggest three categories of intangible assets that are essential for implementing any strategy.
Balancing dilemmas of the balanced scorecard emerald insight. Kaplan and nortons balanced scorecard is a concept still widely used and respected in todays business environment. In todays business environment, strategy has never been more important. Zingales and hockerts, 2003 and the inroads it has made in the corporate world in its adoption and application neely et al, 2004. The strategy map idea featured in several books and articles during the late 1990s by robert s. According to kaplan and norton 1996, 2001a, 2004, an effective strategic learning process requires a shared strategic framework that. Its objective is to translate an organizations mission and vision into actual operational actions strategic planning. The balanced scorecard was originally developed by dr.
A critique of the balanced scorecard as a performance. In the article measuring the strategic readiness of intangible assets, they describe how to assess how prepared your companys people, systems, and cul. Using the balanced scorecard as a strategic management system. Converting intangible assets into tangible outcomes harvard business school press, 2004 is a sequel to their classic the balanced scorecard hbsp, 1996. The article was based on a multicompany research project that studied performance measurement in companies whose intangible assets played.
Kaplan and norton argue that the most critical aspect of strategyimplementing it in a way that ensures sustained value creationdepends on managing four key. Balanced scorecard main page performance measurements main page. However, since the concept of the bsc is not yet mature, differences in its interpretation and practice have emerged. Summary by chris hourigan master of accountancy program university of south florida, fall 2002. How to understand a strategy map and the causeandeffect relationships. Though critics have questioned the robustness of the bsc from various angles such as accounting. Kaplan gre exam 2004 by kaplan educational center staff 2003.
Soon, norton adapted golds idea and went into print in cio insight 2004. During the past 30 years, much attention has been focused on how companies can formulate new strategies for sustainable advantage. How to understand a strategy map and the causeandeffect relationships between processes and intangible assets. It provides the foundation for designing a balanced scorecard that is the cornerstone of a strategic management system. Converting intangible assets into tangible outcomes 978159940 by kaplan, robert s norton, david p. The balanced business scorecard a strategic performance measurement framework. Conceptual foundations of the balanced scorecard 3.
Measuring the strategic readiness of intangible assets. Despite the widespread support the balanced scorecard bsc has enjoyed since its introduction by kaplan and norton, 1992, the various modifications it has been subjected to kaplan and norton, 1996. Gold wrote what might be considered the first strategy maps for it organization ito scorecard strategy maps. Converting intangible assets into tangible outcomes, by robert s. The article was based on a multicompany research project to study performance measurement in companies whose intangible assets played a central role in value creation nolan norton institute, 1991. Kaplan and norton offer their services, training and consulting, and conferences on the balanced scorecard and strategy vis the balanced scorecard collabora. David norton as a framework for measuring organizational performance using a more balanced set of performance measures. The earliest bsc papers kaplan and norton, 1992 advocated the use. Strategic management converting intangible assets into.
If playback doesnt begin shortly, try restarting your device. The balanced scorecard implementation, integrated approach and. The balanced scorecard as a performance management tool. Jerz problem solving and the gathering of diagnostic information john l. The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve internal and external communications, and. The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton.
Norton introduced the balanced scorecard, a revolutionary performance measurement system that allowed organizations to quantify intangible assets such as people, information, and customer relationships. May 03, 2014 the balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. Kaplan and norton 1996 11 put forward the concept of the balanced scorecard, which is a comprehensive consideration of the financial and nonfinancial indicators to reveal the implementation. In addition, it can help provide information on the chosen strategy more. A proposed heuristic for a computer chess program john l. In this first of two articles on strategy development, adapted from kaplan and nortons.
Strategy maps engels door robert kaplan, david norton onze prijs. Strategy maps engels door robert kaplan, david norton boek. This cited by count includes citations to the following articles in scholar. Balanced scorecard is a strategy performance management tool a semistandard structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions the phrase balanced scorecard primarily refers to a performance management report used by a management team, and typically. However, formatting rules can vary widely between applications and fields of interest or study.
Kaplan is the baker foundation professor at harvard business school. This all started in 1992 when their first article, the balanced scorecard mea. Kaplan and norton argue that the most critical aspect of strategyimplementing it in a way that ensures sustained value creationdepends on managing four key internal processes. Over a decade ago, kaplan and norton struck a business consulting gold mine with the balanced scorecard later turned into an eponymous book, which permits executives to list their targets for various measures, i. The purpose of the bsc is to enable effective monitoring and control of the business. Yet research shows that most companies fail to execute strategy successfully. Their original book in 1996, the balanced scorecard, translating strategy into action, contained diagrams which are later called strategy maps, but at this time they did not refer to them as such. Norton introduced a revolutionary performance measurement system called the balanced scorecard to enable companies to quantify critical intangibles such as people. Videos you watch may be added to the tvs watch history and influence tv. Norton have had a major impact on how compa nies think about strategy and how they measure the performance of mangers. Balanced scorecard basics balanced scorecard institute.