Sunday, August 25, 2013

BALANCED SCORE CARD....PATH TO INTERNAL CONTROL

Balanced score card is a tool through which intellectual capital can be created for an organization for a long time frame. Strategic competencies of an organization can be built through efficient internal control is being developed through learning and growth strategy of balanced score card. The most effective measure that we have found for strategic competencies, deceptive in its simplicity, is derived from the answers to three questions: (1) What are the required competencies?, (2) What currently exists?, and (3) What and how large is the gap?. Internal audit helps the origination to develop the gap analysis which would help the organization to develop a constructive long term strategic growth. Balanced score card should help the organization to create intellectual capital like human man power ,innovation, products and process which would create long term sustainable growth for the organization. The current position of the companies as on 24th of August 2013 in India needs high implementation of balanced score card strategies. I find that internal audit is useless unless the internal control process is designed to provide a fruitful result to the auditors. Balanced score card needs to be a part of the internal control process.

Balanced score card helps an organization to increase and develop the employee wise revenue and sales per personnel. It helps to redesign the staff development process of an organization. One of the key aspect of balanced score card designing is not to have more than 10 measures covering the 4 pillars of the balanced score card. One should create a diagnostics measure rather than creating optimization strategy. Balanced score card itself lays down the process of internal control and audit aspects of the organizations. The score card should be sufficient enough to create the growth strategy of an organization for a long term.

In my own experience and research I have found when discussing the measures of balanced score card the organization fails to implement the same the top executives of the organization discusses the measures and forms the direction or orders to adopt the same to the next level of executives. This is one of the prime wrong aspects which the internal auditor should try to avoid the same. They senior executive should let the flow of balance score card measures to the lower levels and without keeping it within closed doors. The measures of balanced score card and its results should be mixed within the corporate vision and mission of the organization. 

The best result of mixing it up with mission and vision of the organization would be that it would create a new culture for the organization. Internal audit would get new shape a direction and the internal control, process would get reframed. It has been found that balanced score card can help a unorganized industry to achieve mergers and acquisition through which it can become organized market of players. Balance score card works efficiently in this type of huge complex process.  

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