Balanced Scorecard - Solving All Problems of Traditional Accounting Systems?

Balanced Scorecard (BSC) is a modern management tool for performance measurement and was developed in the early 1990s to overcome the limitations of managing only with financial measures. The BSC supports translating organization's strategy into action by defining specific goals and objectives associated with the organization's vision, providing measures, and indicating initiatives to reach those goals. It helps to solve a big problem in the practice, namely the strategy concept is often brilliant but the realizations fail. The aim of this study is to analyze whether the Balanced Scorecard can solve all problems of traditional accounting systems. To answer this question, firstly, typical problems of traditional accounting systems are studied. Afterwards, the basic concept as well as benefits and drawbacks of BSC are viewed into details. Finally, the limits and difficulties of BSC realization in practice and initiates to avoid the pitfalls are illuminated.

Balanced Scorecard (BSC) is a modern management tool for performance measurement and was developed in the early 1990s to overcome the limitations of managing only with financial measures.