The [Balanced Scorecard] article compares flying a modern jet aircraft with its many instruments and controls to managing a complex firm. Indeed where the relationship between an action and its result is well known, it is possible for humans to handle a large number of measures simultaneously. But success for a firm is not an easy matter of cause and effect. Some actions of considerable importance in terms of cost may be very hard to demonstrate when it comes to their effect, e.g., investment in information technology and image advertising. And outcomes such as changes in market share may be more a matter of competitive behavior than results of actions by a firm’s management. This is a far cry from the operation of a jet aircraft where every meter and control has specific meaning to the pilot. Thus, aligning a firm’s forces from a large number of measures is a difficult proposition.
Authors: Ivor Morgan, Jay Rao
Source: “Babson Insight”
Subjects: Management, Measurement
Click to Add the First »