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Leadership
This article summarizes Kaplan and Norton’s earlier work on the “balanced scorecard” system, a set of measures designed to give a manager an overview of business performance. This comprehensive scorecard system is grounded in an organization’s strategic objectives and competitive demands. It includes measures of financial success, customer satisfaction, internal processes, and innovation and improvement activities. By choosing a few indicators in each measurement area, the scorecard shows a balanced picture that can help an organization focus on its unique vision. To illustrate the use of the scorecard, Kaplan and Norton provide three case studies in different organizations including Rockwater, an engineering and construction company, Apple Computers, and Advanced Micro Devices, a semiconductor company. They conclude that the balanced scorecard is not only a measurement system, but a management system that is particularly effective in navigating change.