PRACTICAL APPLICATION OF THE BALANCED SCORECARD MODEL, A BALANCED STRATEGIC INDICATOR SYSTEM

Abstract

The operating environment of business organizations has clearly changed currently. Given the complex context marked by globalization, intensifying competition, and rapidly changing consumer demands, it is not enough for managers to focus solely on the financial performance of businesses. The Balanced Scorecard model, as a multi-perspective, comprehensive, balanced indicator system helps implement multidisciplinary corporate management. The following analysis focuses on the corporate controlling function, its development and tasks and then on the Balanced Scorecard, which is closely related to controlling. The model aims to capture the operation of organizations from financial, customer, internal business and learning and growth perspectives and to link their strategy map to causally related indicators. The paper also looks into a possible way of developing the model in practice using a fictitious companyas an example. A balanced system of indicators can be developed after defining its central strategy, making a thorough analysis of its external and internal environment and establishing strategic sub-objectives. With the help of the Balanced Scorecard, the quantified directions needed to achieve a strategic goal can be determined based on understandable, interrelating indicators.

Keywords

• balanced scorecard
• controlling
• strategic sub-objectives
• indicators