Balanced Scorecard (BSC) is a modern management tool for performance measurement and was developed in the early 1990s to overcome the limitations of managing only with financial measures. The BSC supports translating organization’s strategy into action by defining specific goals and objectives associated with the organization’s vision, providing measures, and indicating initiatives to reach those goals. It helps to solve a big problem in the practice, namely the strategy concept is often brilliant but the realizations fail.
The aim of this study is to analyze whether the Balanced Scorecard can solve all problems of traditional accounting systems. To answer this question, firstly, typical problems of traditional accounting systems are studied. Afterwards, the basic concept as well as benefits and drawbacks of BSC are viewed into details. Finally, the limits and difficulties of BSC realization in practice and initiates to avoid the pitfalls are illuminated.
It could be stated, that the BSC provides a holistic thinking and a balance between financial and non-financial perspectives: finance, customer, internal business process, as well as learning and growth. It helps organization to implement strategy faster and more effectively. Moreover, BSC supports managers to perform the controlling tasks, namely planning, driving, briefing and monitoring organizational activities.
However, the BSC also shows some limitations and difficulties whereby the pitfalls in the practise are based on design and process failures. To avoid these pitfalls useful initiates and special features for practical design of BSC should be implemented. Taking into account this rules BSC could be used as a powerful tool for strategic management accounting.
Table of Contents
- 1 Introduction
- 2 Main Part
- 2.1 Problems of traditional accounting systems
- 2.2 BSC as a management tool for translating strategy
- 2.2.1 Basic concept of Balanced Scorecard
- 2.2.2 Benefits of Balanced Scorecard
- 2.3 Limitations and difficulties of Balanced Scorecard
- 2.3.1 Key success factors for Balanced Scorecard
- 2.3.2 Problems and difficulties of Balanced Scorecard
- 2.3.3 Initiates to avoid the pitfalls of Balanced Scorecard
- 3 Conclusion
- 4 ITM Checklist
Objectives and Key Themes
This study aims to analyze whether the Balanced Scorecard (BSC) can effectively address the shortcomings of traditional accounting systems. The research first examines common problems associated with traditional accounting methods. It then delves into the fundamental principles, advantages, and disadvantages of the BSC. Finally, it explores the challenges and limitations encountered during BSC implementation and suggests strategies for mitigating these issues.
- Problems of traditional accounting systems
- The basic concept and benefits of the Balanced Scorecard
- Limitations and difficulties in implementing the Balanced Scorecard
- Strategies for successful Balanced Scorecard implementation
- The holistic approach of the Balanced Scorecard compared to traditional methods
Chapter Summaries
1 Introduction: This introductory chapter likely sets the stage for the subsequent analysis of the Balanced Scorecard (BSC) by providing background information on the context and relevance of the research. It might introduce the key problem addressed by the BSC—the limitations of traditional accounting systems—and briefly outline the structure and approach of the study.
2 Main Part: This central section forms the core of the study, encompassing a detailed exploration of the BSC and its relationship to traditional accounting systems. It likely begins by identifying and discussing specific shortcomings of conventional accounting methods, providing a basis for evaluating the BSC's potential as a solution. Then, the chapter dives into the conceptual foundations of the BSC, elaborating on its core principles and highlighting its advantages. This is followed by a critical analysis of the limitations and challenges associated with implementing the BSC. The section likely concludes by providing practical recommendations and strategies for successful BSC implementation, aiming to avoid common pitfalls.
Frequently Asked Questions: A Comprehensive Language Preview
What is the main topic of this document?
This document provides a comprehensive preview of a study analyzing the Balanced Scorecard (BSC) as a solution to the shortcomings of traditional accounting systems. It covers the objectives, key themes, chapter summaries, and keywords of the full study.
What are the key themes explored in this study?
The study explores several key themes, including: the problems of traditional accounting systems; the basic concept and benefits of the Balanced Scorecard; the limitations and difficulties in implementing the Balanced Scorecard; strategies for successful Balanced Scorecard implementation; and a comparison of the holistic approach of the Balanced Scorecard to traditional methods.
What problems with traditional accounting systems does this study address?
The study begins by identifying and discussing the specific shortcomings of conventional accounting methods, laying the groundwork for evaluating the BSC's potential as an improved approach.
What is the Balanced Scorecard (BSC), and how does it relate to traditional accounting systems?
The study delves into the fundamental principles and advantages of the Balanced Scorecard, contrasting its approach with that of traditional accounting systems. It examines the BSC as a potential solution to the limitations of traditional methods.
What are the limitations and difficulties of implementing a Balanced Scorecard?
The document acknowledges and analyzes the challenges and limitations encountered during BSC implementation, offering insights into potential difficulties and strategies for mitigation.
What strategies are suggested for successful Balanced Scorecard implementation?
The study provides practical recommendations and strategies for successful BSC implementation, aiming to help organizations avoid common pitfalls and maximize the benefits of the system.
What does the Table of Contents include?
The Table of Contents includes an introduction, a main part detailing the problems of traditional accounting, the BSC as a management tool, its limitations, and strategies for success, a conclusion, and an ITM checklist.
What is covered in the introduction chapter?
The introduction likely sets the stage for the analysis by providing background information, introducing the key problem (limitations of traditional systems), and outlining the study's structure and approach.
What is covered in the main part of the study?
The main part forms the core of the study, detailing traditional accounting system problems, the BSC's principles and advantages, its limitations, and strategies for successful implementation.
What kind of document is this preview?
This is a language preview offering a comprehensive overview of the study's content, including the title, table of contents, objectives, key themes, chapter summaries, and keywords.
- Quote paper
- Dr. Khanh Pham-Gia (Author), 2009, Balanced scorecard - Solving all problems of traditional accounting systems?, Munich, GRIN Verlag, https://www.grin.com/document/132252
