The Balanced Scorecard - Simplest explanation ever

The video explains the balanced scorecard, a model by Kaplan and Norton, which balances financial and non-financial performance measures for long-term business success. It highlights the importance of aligning business activities with strategic goals and introduces the four perspectives: financial, customer, learning and growth, and internal processes. The video also discusses key performance indicators (KPIs) and the strengths and weaknesses of the balanced scorecard, emphasizing the need for regular updates and resource investment to maintain relevance.

What is the primary purpose of the balanced scorecard?

• To prioritize short-term gains

• To eliminate non-financial measures

• To balance financial and non-financial measures

• To focus solely on financial performance

Which of the following is NOT a perspective of the balanced scorecard?

• Marketing

• Customer

• Learning and Growth

• Financial

What does the financial perspective of the balanced scorecard focus on?

• Customer satisfaction

• Employee training

• Inventory management

• Revenues and expenses

Which KPI is associated with the customer perspective?

• Quality control

• Customer retention

• Return on investment

• Employee skills

Why is the learning and growth perspective important?

• It reduces inventory costs

• It ensures employee skills match competitors

• It increases customer complaints

• It focuses on short-term financial gains

What is a key performance indicator (KPI)?

• A financial metric only

• A measure of key performance against a standard

• A tool for short-term gains

• A customer satisfaction survey

Which of the following is a strength of the balanced scorecard?

• Requires minimal resources for updates

• Presents a complete view of business performance

• Encourages short-term strategies

• Focuses only on financial stakeholders

What is a challenge in maintaining the balanced scorecard?

• It is easy to balance all perspectives

• It focuses only on financial data

• It ignores customer satisfaction

• It requires regular updates

How does the balanced scorecard encourage long-term success?

• By focusing on short-term financial gains

• By ignoring non-financial measures

• By aligning activities with strategic goals

• By reducing employee training

What is a potential weakness of the balanced scorecard?

• It discourages long-term strategies

• It requires significant resources for data measurement

• It is only relevant for financial stakeholders

• It provides a limited view of performance