What is a balanced scorecard?

A balanced scorecard is a strategic planning and management system that enhances organizational performance by integrating various performance indicators, both financial and non-financial. This approach allows organizations to align business activities to the vision and strategy, improve internal and external communications, and monitor organizational performance against strategic goals.

By incorporating multiple perspectives—such as financial health, customer satisfaction, internal business processes, and learning and growth—the balanced scorecard provides a more comprehensive view of organizational performance. It helps to ensure that the strategies employed are not solely focused on financial outcomes but also take into account customer perspectives and the efficiency of internal processes, thus driving long-term growth and sustainability.

The other responses do not accurately describe the balanced scorecard. While financial statements summarize assets and liabilities, they do not provide a holistic view of an organization’s strategic objectives. Accounting principles guide financial reporting but do not encompass performance management systems. Tools for evaluating employee performance focus on individuals rather than overarching strategic frameworks that inform an organization's direction and effectiveness.