It makes sense to employ a Balanced Scorecard not only at the level of the entire company or in units that plan strategically. Instead it is beneficial to make communicating strategic objectives possible at all operational levels by setting up a scorecard hierarchy. Cascading scorecards are instrumental in making strategies transparent even at the lower levels of the organization, so that all business processes have a strategic direction.
The question of the number and integration of Balanced Scorecards is especially significant in large companies with complex structures. If we assume that companies unite multiple strategic business units (SBU) and subsidiaries under one roof in order to benefit from synergies, then cascading Balanced Scorecards are an appropriate instrument for bringing the strategies of the individual business units in line with one another. Corporate management provides a framework containing the general objectives, and these are translated into individual objectives. This enables the strategic business unit to have an individually formulated Balanced
Scorecard, with contents that are in agreement with the corporation-wide objectives and that therefore allow analyses of common objectives across all areas. In practice, there are even certain cases in which scorecards are broken down as far as to the level of individual employees, and these scorecards are then used in evaluating the employee’s performance (see section 7.1).
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