Business Analysis Toolkit

The government plays an essential role in any society. This political organization is comprised of individuals and institutions or agencies that are authorized to formulate policies and laws and conduct affairs of the State. Just like business organizations, it is a challenge for government agencies and non-profit organizations to come up with an efficient way to measure or evaluate their performance. The use of the Balanced Scorecard approach or a government scorecard should be very effective in the management of organizational performance.

The Balanced Scorecard approach is a management system that has gained much popularity throughout the years. Introduced in 1998 and pioneered by Robert Kaplan and David Norton, this system is now adopted by some of the most successful companies in the world. Compared to the traditional approach of considering only financial metrics, the Balanced Scorecard corporate appraisal system is now widely considered as the more effective method because of the fact that it emphasizes the importance of both financial and non-financial elements of the company’s operations. This management system helps organizations understand, communicate, and introduce improvements in organizational performance. The scorecard approach encourages the need to strike a balance between four vital business perspectives namely financial, internal processes, customer and innovation; between short term and long term plans; between the current organizational situation and changes that take place over time, and also between an organization’s self-image and how other organizations see it.

The government and the agencies and organizations under its control are not immune to the harsh realities of the present time. Nor are they exempt from the pressure of instituting needed changes to improve overall organizational performance. Because millions of people rely on the services provided by government agencies, it becomes even more imperative for them to translate their strategies into performance at every level of the organization.

Though the Balanced Scorecard management system was designed with the private sector in mind, this approach can be customized to cater to the unique requirements of public and non-profit organizations. It can also be designed in such a way that it will identify obstacles that are unique to these organizations. Many experts have recommended the use of the scorecard approach in various government agencies with the contention that it will derive two main benefits: accountability and improvement. The scorecard approach will facilitate accountability because it can assist in providing proof to the public and other stakeholders that the organization or government agency is doing what it is supposed to do. It will also facilitate improvement because it will clearly explain the relationship between certain factors and outcomes that are achieved.

While it will not be entirely easy for the government and its agencies to implement the Balanced Scorecard approach within a limited period of time, its adoption will surely give its leaders a better understanding of how some public organizations are performing relative to pre-determined standards. A government scorecard will also be instrumental for government managers to direct organizational performance so as to achieve strategic goals and desirable results.
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