DEFINITION of 'Balanced Score Card - BSC'

The Balanced Score Card (BSC) is a strategic planning and management system used extensively in business and by organizations worldwide. Benefits of the system include increasing focus on results, aligning business activities with organization strategy and improving performance and communications.

The balanced score card proposes that the organization should be viewed from four perspectives, with metrics developed, data collected and analyzed for each of them. These four perspectives are: Financial, Customer, Internal Business Processes and Learning and Growth.

BREAKING DOWN 'Balanced Score Card - BSC'

The first balanced scorecard was created by independent consultant Art Schneiderman at Analog Devices in 1987. The concept was popularized by Dr. Robert Kaplan and David Norton in the early 1990s.

How the Balanced Score Card Helps Companies

BSC is used by organizations is a means to better communicate the goals the team needs to achieve. This management system allows workers to better align their daily tasks and efforts to support the organization’s strategy. It can be used to assess how a team or operation is advancing to meet company goals. This is also means of clearly seeing which projects, services, or products should be prioritized for development and work.

The BSC system is seen as a kind of roadmap that lays out the direction and purpose of the organization’s strategy and where different components fit. That includes what the company’s mission is, the vision of what the organization hopes to achieve, what the underlying core values are, ways performance will be measured, what the company has focused on for its objectives and forward action.

Using the BSC system is a way for an organization to plan its future beyond short-term, immediate gains and goals such as driving up immediate revenue. Instead of only thinking of ways to turn a quick dollar, the BSC is type of guidance that speaks to how the organization can evolve, scale up, and achieve greater ambitions.

The organization’s progress can be measured against what the BSC has outlined, key performance indicators monitored to show that progress. This can be done with business management software and apps that gathers data and performance information and sends it to the most appropriate parties to take action. A key difference between using past financial information and the BSC system is financial records provide a look at the past and to some extent assumptions on future progress. BSC, on the other hand, is about forming a proactive, and reactive framework for growth or many quarters and year to come.

  1. Balanced Scorecard

    A balanced scorecard is a performance metric used to identify ...
  2. Strategic Management

    Strategic management is the management of an organization’s resources ...
  3. Zero Balance Card

    A credit card on which a consumer does not owe any money because ...
  4. Bank Card Association

    An organization owned by financial institutions that licenses ...
  5. Nonprofit Organization

    A business entity that is granted tax-exempt status by the Internal ...
  6. Cash Card

    A cash card is any electronic payment card that stores cash for ...
Related Articles
  1. Taxes

    What IRS Form 990 Tells About a Nonprofit

    Want a picture of an organization's activities? This annual form, open to the public, sums up everything from salaries paid to missions accomplished.
  2. Insights

    What Are The Costs And Benefits Of Organic Food?

    Organic food is becoming more commonplace in supermarkets, and there are several hidden costs and financial benefits associated with the certification.
  3. Insights

    Whole Foods 365: The Economics of Discount Organic

    Whole Foods Market is expanding its brand to create a chain of discount natural food stores called 365 by Whole Foods Market. With the high cost of producing, shipping and selling organic food, ...
  4. Personal Finance

    How Many Credit Cards Should You Have?

    National stats indicate most consumers have three or more cards - are you one of them?
  5. Personal Finance

    3 Easy Ways To Improve Your Credit Score

    A better credit score can improve your financial future. How can you improve your score?
  6. Personal Finance

    Review: Discover Credit Cards

    Discover it cards still offer generous rewards and no annual fee. But how generous depends on which card you end up with, and what your credit score is.
  7. Personal Finance

    Why Too Many Credit Cards Can Hurt Your Credit Score

    Find out why having too many credit card accounts can adversely impact your credit score if the cards are not managed properly.
  8. Personal Finance

    The Pros And Cons Of Balance Transfers

    Do the math before you assume that transferring your credit card balance to a lower rate card will save money. It could – or it could cost you.
  9. Taxes

    5 steps to forming a tax-exempt nonprofit corporation

    Before you tackle this challenge, know the challenges of forming and operating an official nonprofit organization.
Hot Definitions
  1. Treasury Yield

    Treasury yield is the return on investment, expressed as a percentage, on the U.S. government's debt obligations.
  2. Return on Assets - ROA

    Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.
  3. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  4. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  5. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  6. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
Trading Center