Acta Technica Corviniensis

ACTA TECHNICA CORVINIENSIS – BULLETIN of ENGINEERINGWithin the management instrument, theBalanced Scorecard analyses the fourperspectives: the customers, learningdevelopment,internal processes and thefinancial field.The Balanced Scorecard (BSC) is a strategicmanagement system that manages thecompany’s activities depending on its vision andstrategies. This concept was presented for thefirst time in the 1992 February issue of HarvardBusiness Review by professors Robert Kaplanand David Norton.The concept of Balanced Scorecard wasdeveloped in the early 1990’s by Robert S.Kaplan and David P. Norton. They describe thisinnovation as follows: "The balanced scorecardretains traditional financial measures. Butfinancial measures tell the story of past events,an adequate story for industrial age companiesfor which investments in long-term capabilitiesand customer relationships were not critical forsuccess. These financial measures areinadequate, however, for guiding and evaluatingthe journey that information age companiesmust make to create future value throughinvestment in customers, suppliers, employees,processes, technology, and innovation."At the highest conceptual level, the BSC isdefined as “a frame that helps organizations totranspose the strategy on operational objectivesso as to control both the organizational behaviorand performance” [1].The system consists in 4 processes:The transposition of the vision onoperational objectives;The communication of the vision and itsconnection to individual performances;Business planning;Feedback, learning and strategy adjustmentdepending on the course.The Balanced Scorecard looks at a businessstrategy from all perspectives and allows thedivision of the strategic objectives in individualobjectives and actions down to the lastoperational level. The BSC can contain bothquantitative and qualitative objectives.The strongest point of this instrument is the factthat it binds long-term strategic objectives withshort-term actions. Most control andmanagement systems of companies are builtaround financial indicatives and targets whichplace little emphasis on the long-term strategicobjectives, thus a discrepancy being createdbetween strategy elaboration and itsimplementation.The managers who use the BSC do no longercount only on the short-term financialindicatives to evaluate company performances.The BSC allows them to use the 4 processeswhich, used separately or together, contribute tothe correlation of long-term objectives with theshort-term actions [2].Fig. 1. The BSC principle fromthe 4 perspectives [1]The first process, “Vision translation” is theprocess which helps managers reach consensusin the organization regarding organization visionand strategy. Most times, despite the goodintentions of top-management, assertions of thefollowing type: the best in the x category,number 1 supplier, cannot be easily translated inoperational terms which deliver actiondirections at the local level. So as people to actaccording to the statements from the vision andstrategy, they must be expressed in an integratedset of objectives and measures, agreed upon byall the executive directors, which shoulddescribe the success factors on the long-term.The second process, “Communication andrelating”, allows managers to communicate theirstrategy upward and downward the organizationsteps and to tie it to individual objectives and thedepartment objectives. Traditionally, thedepartments are evaluated according to thefinancial performances and the financialmotivations are tied to the short-term financialobjectives. The BSC gives managers the certaintythat all the organization levels understand thelong-term strategy and that both the individual582008/ACTA TECHNICA CORVINIENSIS/Tome I