Financial perspective balanced scorecard measures

The Balanced Scorecard (BSC) was originally proposed to improve a company s performance measurement. Traditionally, the measurement had been focused only on financial measures. The target of the BSC is to expand the measurement information by adding non-financial, long-term and immaterial factors into the measurement system. Originally the BSC consisted of four measurement perspectives financial perspective, external relations such as customers or partners, internal processes, and learning and growth. (Andersen, Cobbold Lawrie 2001). 

The BSC approach takes broad corporatewide goals and cascades them down into meaningful measures for departments, groups, and individuals. The balance in the balanced scorecard approach comes from the breadth of the measures. Rather than following the common practice of limiting measurement to financial information, the balance is provided by four perspectives ... 

Balanced scorecard An approach to measurement that cascades measures from the top down through the organization. The method uses four perspectives to achieve balance. These are financial, customer, internal business, and irmovation and learning. 

Finally, in the well publicized Balanced Scorecard the role of financial perspective, as one of the four perspectives, has been accepted by operations mangers since financial measures are valuable in summarizing the readily measurable economic consequences of actions already taken (Kaplan and Norton, 1996). 

Balanced Scorecard Balanced Scorecard introduced by R. Kaplan and D. Norton in early 1990s is a concept for measuring a company s activities in terms of its vision and strategies, to give managers a comprehensive view of the performance of a business. Typically it comprises simple tables broken into four sections of perspectives which are labelled as Financial , Customer , Internal Business Processes and Learning Growth . 

In practice, Kaplan and Norton propose that the balanced scorecard should balance the financial perspective (goals for future performance and measures of past performance) with similar goals and measures for the underlying drivers of longterm profitability. These drivers are identified as the business process perspective, the innovation and learning perspective and the customer perspective. 

Although financial and quantitative performance measures tend to be predominant there are developments discussed earher (e.g., Balanced Scorecard) that are resulting in more qualitative and subjective measures of performance to provide a more holistic perspective. 

---