Final answer:
The Balanced Scorecard is a strategic management tool 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.
Step-by-step explanation:
The Balanced Scorecard is a strategic planning and management system that organizations use to:
- Communicate what they are trying to accomplish
- Align the day-to-day work that everyone is doing with strategy
- Prioritize projects, products, and services
- Measure and monitor progress towards strategic targets
Developed by Robert S. Kaplan and David P. Norton in the early 1990s, the Balanced Scorecard provides a framework that not only provides performance measurements, but also helps planners identify what should be done and measured. It complements traditional financial indicators with criteria that measure performance from three additional perspectives:
- Customer perspective
- Internal process perspective
- Learning and growth perspective
This enables organizations to view their performance more holistically, thus helping them achieve strategic goals and improve overall performance.