CCT224H5 Lecture Notes - Lecture 2: Performance Indicator, Balanced Scorecard, Performance MetricPremium
by Hao Liu
2 pages60 viewsFall 2017
DepartmentCommunication, Culture and Technology
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Week 2 – Balanced Scorecard
• Performance metric used in strategic management to identify and improve
various internal functions of a business and their resulting external outcomes
o What is a metric?
▪ Quantifiable measure used to track and assess the status of a
specific business process
• Strategic planning and management system
• An objective way to tell us if a strategy is working
• Offer a comparison that gauges the degree of performance change over time
• Measurement of accomplishments, not just the work that is performed
• Originated by Dr Robert Kaplan (Harvard Business School) and Dr David Norton
as a performance measurement framework that added strategic non-financial
performance measures to traditional financial metrics to give managers and
executives a more “balanced” view of organizational performance
• “traditional performance measurement systems” (management accounting based
systems) based on RESULTS – calculated and totalled the “math” for processes
to understand what went wrong
o “outcome focus”
o things have already gone wrong
o does not tell us when something may go wrong in the FUTURE
• Four perspectives
o Learning and growth
▪ Our ability to change and improve our knowledge
o Customer perspective
▪ How the customers feel about our organization
o Financial perspective
▪ How well we are doing financially
▪ How shareholders feel about our financial performance
o Internal business processes
▪ Do we have efficient business processes?
▪ Are our products and services helping us achieve fulfill our mission?
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