The balanced scorecard - Dissertation Example

Research Methodology 16 Qualitative Research 16 Data Collection 17 Research Limitations 17 Research Findings- Empirical Evidence 17 Conclusion 30 Reference 33 Bibliography 36 Introduction 3 Literature Review 5 Overview of the Balanced Scorecard 5 Development of the Balanced Scorecard 8 Benefits of using the BSC 11 Balanced Scorecard Implementation in large enterprises and SMEs 12 Criticisms of the Balanced Scorecard Methodology- challenges of implementing the Balanced Scorecard 14 Research Methodology 16 Qualitative Research 16 Data Collection 17 Research Limitations 17 Research Findings- Empirical Evidence 17 Conclusion 30 Reference 33 Bibliography 36 Introduction Emerged as the most commonly used strategic performance management tool supported by proven automation tools and design methods, the balanced scorecard is extensively used by managers in organizations today for keeping track of activities undertaken by staffs and monitor and control the consequences resulting from these activities.

Today’s organizations are amidst a revolutionary transformation in the business environment which is gradually transforming itself from industrially competitive structure into an information competitive one. Arising out of this cut throat competition organizations have been increasingly looking at improving their businesses further and thus the importance of initiatives like just-in-time system, total quality management systems, Re-engineering, employee empowerment etc have gained prominence.

Even though such initiatives were successful in bringing about improvement in shareholders’ value, their disjointed structure primarily looked at short term growth and performance. The demand for creating long range competitive capabilities and improving the model of the historical cost financial accounting triggered the creation of the Balanced Scorecard. Widely used in industries and businesses the scorecard acts as a strategic management and planning system used the government and non profit organizations with the aim to align business activities of the organization with its strategic vision and mission, improve its internal and external communications and finally to monitor performance of the organization against strategic objectives.

Originated by Dr. Robert Kaplan and David Norton this performance management frame successfully adds the no financial performance measures with the financial metrics and allows managers to have a comprehensive and balanced view of the organization performance. Kaplan (1994) has particularly used the example of Rockwater Company for explaining the developmental process of the balanced scorecard for ensuring that companies are able to realise their goals and objectives. Industries such baking and insurance have been particularly benefitted through the implementation of the process.

Kaplan has explained the management structure of connecting the business units’ strategies with the entire interest of the company. Martinson (1999) has also made use of the case study method for exploring the impact on a corporate information system operation department through the adoption and implementation of the balanced scorecard in four different perspectives such as user orientation, corporate value, internal process and future preparation for the measurement and evaluation of the performance of information systems.

The results have clearly shown that balanced scorecard can be effective in serving as a successful measurement system in a strategic information system (Chi & Hung, 2011, p.226). On the other hand Chia and Hoon (2000) has tried to study the procedures for the promotion of the balanced scorecard and the criteria establishment process in two of the largest merchandise circulation firms based in Singapore. The results have shown that the promotion of the system has been particularly effective in clarifying the vision of these companies and in the preparation of the strategy to be practiced.

Numerous other empirical evidences have shown positive results with the implementation and use of balanced scorecard in organizations. The project brings forth an analysis of the effectiveness of the balance