The main disadvantage of the balanced scorecard (BSC) as a way to measure firm performance is that it is time‑consuming and resource‑intensive to design, implement, and maintain effectively.

Below is a quick “mini‑guide” around that core idea, to match the kind of options you’re likely seeing in an exam or quiz.

Core Disadvantage (Likely Correct Option)

In most multiple‑choice questions, the correct answer is phrased along the lines of:

  • “It requires significant time and effort to develop and maintain a meaningful template or system.”
  • “It is costly and time‑consuming to implement and update.”
  • “It requires a lot of data and ongoing monitoring.”

These wordings all capture the same underlying drawback:

  • The BSC needs:
    • Careful selection of key performance indicators (KPIs) across several perspectives (financial, customer, internal processes, learning & growth).
* Alignment with strategy, plus buy‑in from managers and employees.

* Continuous gathering and updating of performance data, which can be complex and tedious.

Because of all this, the balanced scorecard is not a “plug‑and‑play” tool. It demands substantial time, analytical effort, and administrative resources to do well.

Other Commonly Cited Drawbacks (To Recognize in Options)

If your question lists several choices, some distractors may mention these real but secondary disadvantages:

  • Complexity and information overload
    • It can become overly complex as firms add too many measures, causing information overload and loss of focus.
  • Risk of picking wrong or subjective measures
    • If the wrong indicators are chosen, results can misrepresent performance and mislead decisions.
  • Data quality and collection problems
    • The BSC relies on accurate, timely data; poor data makes the scorecard unreliable.

These are all genuine disadvantages, but in exam‑style questions, the most “textbook” single disadvantage tends to be the time, effort, and cost required to build and sustain a good balanced scorecard system.

Quick Story‑Style Memory Hook

Imagine a mid‑sized company deciding to “get modern” and implement a balanced scorecard:

At first, management is excited: “We’ll see everything on one page!”
But months later, teams are stuck in workshops debating which KPIs to track, IT is building data dashboards, and managers are filling in reports instead of talking to customers.
The promise of clearer strategy alignment is still there—but everyone is exhausted by the time and effort needed to make the system actually work.

That little story captures why exam answers emphasize time, effort, complexity, and data demands as the major disadvantage.

If You’re Staring at Actual Options

If your choices look something like:

  • A. It only considers financial measures
  • B. It requires time and effort to develop and maintain
  • C. It cannot be used in service firms
  • D. It ignores non‑financial indicators

Then the correct answer is:

B. It requires time and effort to develop and maintain.

TL;DR:
The key disadvantage of the balanced scorecard approach to measuring firm performance is that it is resource‑intensive (time, effort, cost, and data) to design, implement, and keep up‑to‑date.

Information gathered from public forums or data available on the internet and portrayed here.