How would you build ethics into the Scorecard framework?
Idea in Practice The balanced scorecard relies on four processes to bind short-term activities to long-term objectives:
1. Translating the Vision By relying on measurement, the scorecard forces managers to come to agreement on the metrics they will use to operationalize their lofty visions. Example: A bank had articulated its strategy as providing “superior service to targeted customers.” But the process of choosing operational measures for the four areas of the scorecard made executives realize that they first needed to reconcile divergent views of who the targeted customers were and what constituted superior service.
2. Communicating and Linking When a scorecard is disseminated up and down the organizational chart, strategy becomes a tool available to everyone. As the high-level scorecard cascades down to individual business units, overarching strategic objectives and measures are translated into objectives and measures appropriate to each particular group. Tying these targets to individual performance and compensation systems yields “personal scorecards.” Thus, individual employees understand how their own productivity supports the overall strategy.
3. Business Planning Most companies have separate procedures (and sometimes units) for strategic planning and budgeting. Little wonder, then, that typical long-term planning is, in the words of one executive, where “the rubber meets the sky.” The discipline of creating a balanced scorecard forces companies to integrate the two functions, thereby ensuring that financial budgets do indeed support strategic goals. After agreeing on performance measures for the four scorecard perspectives, companies identify the most influential “drivers” of the desired outcomes and then set milestones for gauging the progress they make with these drivers.
4. Feedback and Learning By supplying a mechanism for strategic feedback and review, the balanced scorecard helps an organization foster a kind of learning often missing in companies: the ability to reflect on inferences and adjust theories about cause-and-effect relationships. Feedback about products and services. New learning about key internal processes. Technological discoveries. All this information can be fed into the scorecard, enabling strategic refinements to be made continually. Thus, at any point in the implementation, managers can know whether the strategy is working— and if not, why.
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According to the article, the four processes that the Balanced Scorecard relies on to bind short-term activities to long-term objectives are: translating the vision, communicating and linking, business planning and lastly feedback and learning. However, ethical performance is qualitative and hard to measure (Norreklit, 2003), but as a designer of a Balanced Scorecard one can build ethics into the Scorecard framework. This can be achieved by incorporating certain metrics into the Scorecard framework (Marr, Gray & Neely, 2006) because while it is difficult to measure ethical performance in an organization, it is not impossible to do so. By incorporating various metrics into the Balanced Scorecard, an organization can effectively keep track of its ethical performance....
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