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Advantages and Disadvantages of the Balanced Scorecard

19 May 2022   By   Share

Pros and cons of the Balanced Scorecard

What are the pros and cons of the BSC approach?

The Balanced Scorecard approach has many positive points. It encourages managers to better understand the multiple aspects of performance.
The financial indicators are well balanced with customer processes and growth dynamics focused indicators.
It is not about unduly favoring one type of performance to the detriment of other components.
The integration of the dynamic perspective of growth is also one of the strong points of the method.

A top-down approach

We may, however, criticize the exclusive method of a top-down approach.

The implementation of Balanced Scorecard in companies tends to endorse the pyramidal hierarchies. For many companies not very inclined to the individuals and the organizational culture, implementing the Balanced Scorecard is close to establishing new monitoring tools rather than genuine performance measurement tools.

If we want to remain in the logic of the designers, it is good to remember that the Balanced Scorecard was originally designed for general managements. To decline it for the operational divisions is less simple than it seems. As for deploying the balanced scorecard for the greatest number, the bet is lost in advance.

If we still like to take advantage of the framing of the Balanced Scorecard, this will be to facilitate the development of operational strategy. For the remainder of the project, GIMSI-type methods, based on the decision itself, are strongly preferable.

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