Chapter 27

Balanced Scorecard


Problems with Performance Evaluation

You have looked at three different methods of evaluating performance. No one method is the best decision to evaluate all investment centers. The problem with residual income, ROI, and EVA lies in their focus on only one perspective of performance-- financial aspects in the short-term. 


Evaluation Measurement Options

The balanced scorecard approach to management goes beyond financial measures to include multiple performance dimensions.

The focus of the balanced scorecard is to measure progress toward meeting the strategic goals of a corporation. As a manager, you will likely be evaluated on a broader spectrum than solely financial aspects. A typical balanced scorecard performance system involves four perspectives of performance:


Financial perspective
Customer perspective
Internal processes perspective
Learning & growth perspective


Spend some time reading about the balanced scorecard approach to management here:



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