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BSC – Balanced Scorecards

  • Robert Kaplan and David Norton first proposed a ‘Balanced Score Card’ to measure all KRAs – Key Result Areas – where it was vital that an organisation performed well if it was to achieve its longer term aims – otherwise, its very survival could be in jeopardy

BSC - Balanced Scorecards

  • However, they gave no clear steer on the precise measures needed

  • To perform well, and keep all their stakeholders happy, managers need a set of cardinal measures which cover all their KRAs

  • And those stakeholders are many and varied viz:

    • External  stakeholders – the end-customers, investors, suppliers, local communities – they each have a vested interest in the organisation doing well

    • Internal stakeholders – the managers and employees – they want the organisation to prosper, to enjoy working there and to share in its success

  • Hence the profusion of measures for managers, but few for them to manage well