Advantages & disadvantages of a balanced scorecard

Written by erin watson-price
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Advantages & disadvantages of a balanced scorecard
The balanced scorecard helps generate reports to reflect overal business performance. (business image by peter Hires Images from

Dr. Robert Kaplan and Dr. David Norton created the balanced scorecard to help business owners capture a wide and balanced view of their company's performance. The balanced scorecard focuses not only on the financial aspects of the business, but also on customer relations and reactions, internal business processes, learning and growth.

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The balanced scorecard gives executives and senior management an actionable outline of goals and strategies to increase or maintain performance levels. This method of resource management allows for clear communication between various levels of management by providing an exacting framework for reporting.


The balanced scorecard provides a broad consideration of all business aspects, both financial and human. It takes into consideration how each part affects another, rather than just focusing on the performance of one aspect. Once a balanced scorecard system is in place, it allows for ongoing monitoring of goals and objectives.


Because the balanced scorecard looks at the affect on the whole, the performance and encouragement of the individual can be lost. Alternatively, the website Executive Dashboard warns that the scorecard can be perverted and used as an employee monitoring tool rather than as a company performance tool. Finally, the large number of variables taken into consideration to form a viable scorecard can be cumbersome and result in a job unto itself.

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