Identify and Explain the Balanced Scorecard Approach to Control

question 107

Essay

Identify and explain the Balanced Scorecard approach to control. Specify its advantages and how it differs from the traditional approach to control used in most companies. Comment on which approach (the traditional or balanced approach to control) is more likely to help a company adapt to a changing, competitive marketplace.

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Definitions:

Operating Activities

The day-to-day actions that businesses undertake to generate earnings, such as selling products or services.

Financing Activities

Activities that result in changes in the size and composition of the equity and borrowings of a company, as reported in the cash flow statement.

Statement of Cash Flows

is a financial statement that details the inflows and outflows of cash within a company over a specific period, highlighting its operating, investing, and financing activities.

Financing Activities

Transactions with creditors or investors used to fund either company operations or expansions.