Final answer:
The balanced scorecard is a framework companies use to execute strategies by balancing financial and non-financial measures. It develops ideas and integrates multiple perspectives to align business activities with organizational vision. It also facilitates continuous improvement through feedback.
Step-by-step explanation:
The use of a balanced scorecard is a critical element in the steps a firm takes to execute its strategy and manage its performance. A balanced scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals. It incorporates financial measures that tell the results of actions already taken while also including the organization's drivers of future performance through customer, internal process, learning, and growth perspectives.
Setting up an action plan requires the translation of strategic goals into concrete steps. By using a balanced scorecard, a company can ensure it focuses on the appropriate measures that represent progress toward strategic objectives. Not only does it compose a report that develops ideas and integrates evidence from multiple perspectives, but it also allows an organization to give and act on productive feedback, fostering a cycle of continuous improvement