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M. de Andrade Lima et al.
2.1 Balanced ScoreCard-BSC, Perspectives and Premises
As a basic premise of the BSC, rather than a control system, its measures should
be used to articulate organizational strategy, communicate it, and help align interdepartmental and individual initiatives. They should do this in order to achieve a
larger goal in a more effective and synergistic manner. The BSC measures operational performance using four perspectives: financial, customer, internal business
processes, and learning and growth (Kaplan and Norton 1996). The connection of
the four perspectives of the BSC can form a cause and effect relationship. The four
collaborate to define project priorities to be developed and implemented to achieve
the desired financial results (Dias-Sardinha et al. 2007).
The term “balanced” refers to a “balance between external measures for shareholders and customers, and internal measures of critical business processes, innovation and learning and growth” (Möller and Schaltegger 2005). Financial and nonfinancial measures, external indicators and internal measures of critical business
processes, innovation, learning and growth should be part of BSC. For Epstein and
Wisner (2001), all relevant aspects must be included in the BSC in order to achieve a
permanent competitive advantage by explaining the value proposition established in
the organizational strategy. Creating and preserving competitive advantages serves
to ensure the economic success of a company.
Therefore, it is a strategic management system that uses performance indicators
organized around four dimensions. The BSC’s properties as a measurement system
establish a focus that provides a sense of direction shared throughout the organization
(Kodrin 2016). Finally, it should be noted that BSC is not a tool for strategy formulation. It should serve to describe an existing strategy consistently to improve its
execution and make it successful (León-Soriano et al. 2010). Thus, the BSC enables
the identification of potential value-added areas and prepares the strategic process
by defining the strategic map. This, in turn, will make it possible to understand the
impacts of other aspects of these dimensions, not only being linked to operational
aspects, but also to strategic strategies, development, and value creation.
The development of the BSC requires that the organization’s mission and vision
are well defined and consolidated. The BSC methodology reveals a continuous interaction between these concepts. The entire established structure: strategy, strategic
map, objectives and indicators derive from the organization’s mission statements
and vision. In the original BSC, for each perspective there is a guiding question
for selecting the most appropriate strategic objectives. Therefore, the BSC has the
premise that there is “a way” for the organization to go from formulating its strategy,
which is stated in its mission, vision and values, to the results that will come from
them.
The main questions asked in each perspective for the construction of the
management system according to Kaplan and Norton (1996, pp. 26–29) are (Table 1).
For Kaplan and Norton (1996) the success of implementing a BSC lies in articulating the objectives with coherent mutually reinforcing measures. For the authors
M. de Andrade Lima et al.
2.1 Balanced ScoreCard-BSC, Perspectives and Premises
As a basic premise of the BSC, rather than a control system, its measures should
be used to articulate organizational strategy, communicate it, and help align interdepartmental and individual initiatives. They should do this in order to achieve a
larger goal in a more effective and synergistic manner. The BSC measures operational performance using four perspectives: financial, customer, internal business
processes, and learning and growth (Kaplan and Norton 1996). The connection of
the four perspectives of the BSC can form a cause and effect relationship. The four
collaborate to define project priorities to be developed and implemented to achieve
the desired financial results (Dias-Sardinha et al. 2007).
The term “balanced” refers to a “balance between external measures for shareholders and customers, and internal measures of critical business processes, innovation and learning and growth” (Möller and Schaltegger 2005). Financial and nonfinancial measures, external indicators and internal measures of critical business
processes, innovation, learning and growth should be part of BSC. For Epstein and
Wisner (2001), all relevant aspects must be included in the BSC in order to achieve a
permanent competitive advantage by explaining the value proposition established in
the organizational strategy. Creating and preserving competitive advantages serves
to ensure the economic success of a company.
Therefore, it is a strategic management system that uses performance indicators
organized around four dimensions. The BSC’s properties as a measurement system
establish a focus that provides a sense of direction shared throughout the organization
(Kodrin 2016). Finally, it should be noted that BSC is not a tool for strategy formulation. It should serve to describe an existing strategy consistently to improve its
execution and make it successful (León-Soriano et al. 2010). Thus, the BSC enables
the identification of potential value-added areas and prepares the strategic process
by defining the strategic map. This, in turn, will make it possible to understand the
impacts of other aspects of these dimensions, not only being linked to operational
aspects, but also to strategic strategies, development, and value creation.
The development of the BSC requires that the organization’s mission and vision
are well defined and consolidated. The BSC methodology reveals a continuous interaction between these concepts. The entire established structure: strategy, strategic
map, objectives and indicators derive from the organization’s mission statements
and vision. In the original BSC, for each perspective there is a guiding question
for selecting the most appropriate strategic objectives. Therefore, the BSC has the
premise that there is “a way” for the organization to go from formulating its strategy,
which is stated in its mission, vision and values, to the results that will come from
them.
The main questions asked in each perspective for the construction of the
management system according to Kaplan and Norton (1996, pp. 26–29) are (Table 1).
For Kaplan and Norton (1996) the success of implementing a BSC lies in articulating the objectives with coherent mutually reinforcing measures. For the authors