Should the “perspectives” of Kaplan Balanced Scorecard all receive equal weight when you are looking at overall performance? In other words, should businesses put more weight on Financial performance than on Operations, Innovations and Customer views and why?
Any firm has four key perspectives from which it should consider its strategy: Financial, Customers, Internal Processes, and Learning and Growth. The firm needs to make money, and for that it needs customers; customers’ needs are served by the output of the firm’s internal processes, and in order to achieve and maintain a competitive advantage, the firm must learn and improve continuously over time, developing over its existing processes.
The Balance Score Card asks the four questions:
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- What is our share-holder value added (the financial perspective)
- What value are we adding to our customer? (the customer perspective)
- What should we excel in to provide value to our internal stake holders? (the internal processes perspective)
- What is our plan for sustenance and improving in the market? (the learning and growth perspective)
The Balanced Scorecard is a four-sided matrix, with the firm’s vision and competitive strategy at its center. Hence all the four perspectives should receive equal weight.