Question

Which of the following statements about the Balanced Scorecard is true?

a. An effective balanced scorecard will create a strategy map and validate the cause-and-effect relationships between measures in the four perspectives and financial outcomes.

b. The four balanced scorecard ‘perspectives’ used by all companies are the: operational, investing, financing, and customer perspectives.

c. A balanced scorecard is commonly used to evaluate investment decisions.

Answer 1

Balanced scorecard is used to evaluate the performance of company in terms of financial, customer, internal process, learning and growth. It provides a roadmap to the company and sets performance standards based on which the performance of company is evaluated.

Option (b) is incorrect as operational, investing are not part of balanced scorecard perspectives.

Option (c) is incorrect as it is used to set targets and evaluate performance of company and not investment decisions.

Option (a) is correct as it provides strategy map for company