When different interests and goals are to be combined, conflicts inevitably arise. Such conflicts are often resolved by giving priority to certain interests and goals and deliberately putting other interests and goals on the back burner. The focus is classically placed on avoiding conflict and concentrating resources on prioritized activities.
However, this does not avoid conflicts, it only displaces them. A restriction to sections of reality leads to illusory solutions. Conflicts are even subliminally intensified until they escalate. To avoid this development, a holistic, networked management approach is needed.
The Balanced Scorecard, developed in the early 1990s by R. S. Kaplan and D. P. Norton, is a concept that can be used to integrate all aspects of corporate management. Kaplan and Norton recognized that financial figures alone were not enough to manage companies successfully. They added the customer perspective, the employee perspective and the process dimension. Only this made it possible to visualize a dynamic view and a development perspective of companies. The Balanced Scorecard leads to sensible investments in leadership, especially in the qualification and motivation of employees, and in powerful information systems. The customer perspective stands for a strategic orientation in the market that is conclusively based on demand.
Make sure that the perspectives of the balanced scorecard do not stand unconnected next to each other, but that they are interlinked. A good understanding of customer needs should trigger relevant qualification measures and appropriate business processes. Conversely, qualification can enable customer needs to be correctly identified and business processes to be aligned with them. The necessary financial resources should be made available for these activities, while the skills developed with these resources in turn strengthen the financial power. The balanced scorecard concept promotes an understanding of complex interrelationships and helps to develop all perspectives simultaneously in a well-structured and coordinated manner. In this respect, a balanced scorecard serves as an integrated management tool with which target systems can be clearly transferred via strategies into implementation processes. In this way, strategic initiatives can be comprehensibly interlinked with operational measures.
The balanced scorecard is an instrument that contains features of the Japanese HoshinKanri concept.
The balanced scorecard concept can also be used to implement voluntary commitments on corporate social responsibility aspects.