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Alignment: Using the Balanced Scorecard to Create Corporate Synergies by David P. Norton, Robert Kaplan

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CHAPTER EIGHT

ALIGNING EXTERNAL PARTNERS

THE FINAL COMPONENT in an organization alignment program is for the enterprise to build scorecards with strategic external partners, such as key suppliers, customers, and alliances. When an enterprise builds a Balanced Scorecard with a strategic external partner, it enables the senior managers from the two entities to reach a consensus about the objectives for the relationship. The process creates understanding and trust across organizational boundaries, reduces transaction costs, and minimizes misalignment between the two parties.

The scorecard also provides an explicit contract by which interorganizational performance can be measured. Without a Balanced Scorecard, contracting with an external partner ...

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