balanced scorecard

In 1992, Robert S. Kaplan and David Norton introduced the balanced scorecard (BSC), a concept for measuring a company's activities in terms of its vision and strategies, to give managers a comprehensive view of the performance of a business. The key new element is focusing not only on financial outcomes but also on the human issues that drive those outcomes, so that organizations focus on the future and act in their long-term best interest. The strategic management system forces managers to focus on the important performance metrics that drive success. It balances a financial perspective with customer, process, and employee perspectives. Measures are often indicators of future performance. Since the original concept was introduced, balanced scorecards have become a fertile field of theory and research, and many practitioners have diverted from the original Kaplan & Norton articles.

capital, assets and value

This discussion on capital, assets and value is taken from three sources. The objective enterprise framework directs it's attention at what are often referred to as intangible assets. After examining the sources below and others, we settled on the three major categories of human, intellectual and structural assets for intangible assets.

“Actually, an economy needs four types of capital to function properly: human capital, in the form of labor and intelligence, culture and organization; financial capital, consisting of cash, investments and monetary instruments; manufactured capital, including infrastructure, machines, tools and factories; natural capital, made up of resources, living systems, and ecosystem services.”Natural Capitalism by Paul Hawken, Amory Lovins, L. Hunter Lovins (ref: ph1)

“What is value? Generations of business and accounting students have been taught that value lies in assets. Assets in turn are everything owned by a company that has money value. Assets come in four forms, three of them precise and measurable, and the fourth imprecise and essentially unmeasurable until it is sold. The first two types of assets are current, meaning they are likely to be consumed or sold within the next year, such as inventories and accounts receivable; and fixed (or long-life), which, in the form plant, equipment and property, have a useful life of more than a year. Fixed assets, because their value is used up in increments over multiple financial reporting periods, are depreciated, that is, their cost is spread out in a reasonable and systematic way across successive balance sheets. The third type of asset is investments, such as a company’s holdings in stocks and bonds. Though this type of asset is typically more volatile than the first two, it nevertheless can be measured in a systematic way through market value and other metrics. The fourth asset type, however, is far more problematic. Intangible assets are those that have no physical existence but are still of value to the company. Typically they are long term, and just as typically they cannot accurately be valued until the company is sold. What are these hidden values? They appear to take three basic forms: human capital, structural capital, and customer capital."Intellectual Capital by Leif Edvinsson and Michael S. Malone

"Capital has a number of related meanings in economics, finance and accounting. In finance and accounting, capital generally refers to financial wealth, especially that used to start or maintain a business. Initially, it is assumed here that other styles of capital, e.g. physical capital, can be acquired with money or financial capital, so there is little need here for any further analysis of the latter. So below, the word "capital" is short-hand for "real capital" or "capital goods" or means of production. Also to be ignored will be the problems of aggregating capital and the capital controversy."Capital (economics) - Wikipedia, the free encyclopedia