Research paper on THE CONCEPT OF BALANCED SCORECARD AS A STRATEGIC MANAGEMENT TOOL

According to R. Kaplan the implementation of the new concept should consist of four stages:

1) Development of a balanced scorecard ”“ transformation of long-term plans and strategies into objectives and activities. After development the system should be integrated into the management process. It is important to point out that in developing the BSC for each goal it is necessary to define measurable criteria of
achievement. These indicators are the basis for regular monitoring of the implementation strategy, serve as criteria for success, give directions for planning throughout the company.

2) Consistency – linking all hierarchical levels (from senior management to units) by alignment of the goals and objectives, organization of strategic communication, providing compensation for proactive solutions;

3) Planning – identifying ways to achieve the planned results on specific targets, resource allocation, strategic planning activities;

4) feedback and learning – testing a theoretical framework of the strategy. (Kaplan & Norton 2002)

It is particularly convenient to use the balanced scorecard as a tool for strategic communication, and specifications in those cases where the strategy is formulated vaguely and carries political overtones. Very often it happens in public administration and nonprofit organizations.

Next it is necessary to consider the use of BSC-profit public organization on the example of higher education institution in Saudi Arabia.