Kaplan and Norton Essay Example | Topics and Well Written Essays - 500 words

Kaplan and Norton - Essay Example Their scorecard requires managers to answer the basic question for accounting: "How do we look at shareholders" The Kaplan and Norton describe the innovation of the balance scorecard as follows: "The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation." (Kaplan, Norton, 1996). So, the process of the Balance Scorecard planning helps to identify specific procedure and processes required at different levels of the organization. The organization's strategic, tactical, and operational goals and plans must be consistent and mutually supportive. There are four primary cells in the Balance Scorecard: financial, customer, process, and people/learning. In each cell, company should identify the key drivers that help translate strategic goals to operational accounting issues. Each of those goals would also have a set of metrics. For example, under customer metrics, a company might look at growth rate. (b) Using the balanced scorecard system allows the food retailer industry