Balanced Scorecard - Assignment Example

? Balanced scorecard [Semester] Balanced scorecard Introduction A balanced scorecard is a performance measurement tool used in strategic management to discover and develop a variety of internal processes as well as assessing of the impacts of the external factors. In particular, the purpose of this technique is to measure and assist organizations in the implementation of their goals and strategies. The balanced scorecard method is used by organizations for different purposes including strategic planning, organizational and strategic positioning, improvement of communication and management information; and most importantly to enhance performance in organizations. Essentially, the balanced scorecard is concerned with analysis of four areas including customers, finance, business processes and learning and growth. Managers are usually engaged in collection of quantitative data and then analyzing it with the aim of making appropriate and long-term decisions courtesy of balanced scorecard technique. This paper will analyze five different papers, which have examined balanced scorecard through case studies, primary data collection and as well as secondary research. The papers have good insight on the applicability, advantages as well as the challenges of balanced scorecard in different organizational setups. The study will involve analysis of the aims, methods and results of each of the papers and then a different section will compare their results. Finally, the paper will end by a conclusion, which will explain what I have understood from this study. Purpose of the study The purpose of this study is to have a critical analysis of balanced scorecard based on the studies of other authors who have conducted their studies in various settings and using different methodologies. Analysis of researches done in different settings and based on different methods and results will provide insightful information on what balanced scorecard entails, its challenges and application in different organizations. Literature review Managing Innovative Strategic HRM: The Balanced Scorecard Performance Management System at ITC Hotels - Bhatnagar et al., (2004). The aim of this study is to find out how Strategic Human Resource Management (SHRM), can support innovation by the help of a balanced scorecard approach. Using the insights derived from Yin (1994), the authors have researched the manner in which balanced scorecard performance management system has been fruitfully put into practice in two major hotel chains including Towers and ITC Maurya, which are located within the India’s capital. This case study comprises of the organizations’ interaction of 45 several stakeholders. Among those who participated in providing information in this study included the vice president, HR. In addition, secondary sources were examined for more evidence, which included power point presentations used to make communications in the organizations. Also conducted in the study was a cultural analysis that espoused the innovative intervention, whereby 20 employees including managers holding the top, middle and lower level positions were interviewed and the results recorded in an open-ended format. The results of the study show that a strategic and innovative HRM intervention in ITC Maurya leads to a relearning of a fresh performance-based culture and unlearning of the past culture, hence enhancing the successful execution of the balance scorecard technique. Nonetheless, this leads to institutionalization of HR role and the innovative process. The case study also typified BSC implementation in Maurya hotels. However, it is found that HR managers will have a challenge of repeating this intervention in the rest of the hotels in the capital, particularly depending on how the stakeholders are involved in the process as well as the manner in which the intervention involves the non-managerial staff. Service quality management applying the balanced scorecard: an exploratory study - Ratnasingam, 2009. This study looks at the functions of the balanced scorecard framework in web service quality. A balanced scorecard approach is designed for web service quality by pointing out critical success factors that constitute the goals of a business, targets, measures and programs. The study is done by developing a framework of web service quality by use of the balanced scorecard approach, which is achieved through the incorporation of the balanced scorecard theory as well as web services. In addition, case studies are conducted in two organizations from the agricultural sector in order to assess the balanced scorecard framework. The results of the investigative case studies verify a recurring process that was resulted from the balanced scorecard method, which specified how information can be passed on and how incorporation and quality assessment can be conducted on applications of web services – this was aimed at examining the manner in which potential application of web services can be achieved. Designing a strategic management system using the third-generation balanced scorecard: A case study (Cobbold, Lawrie and Issa, 2004). The purpose of this paper is to examine a project that led to the development and implementation of a strategic performance management approach at a Saudi Arabian’s manufacturing company called Zamil Air Conditioners (ZAC), which aimed at enhancing its design and implementation of strategic plans. The use of third-generation balanced scorecard approach is described using a case study involving private sector settings. The case used in this study has helped assess the effectiveness of social and rational decision-making approach applied by a team of managers, based on the way each technique influences the behavior of managers. The research questions are designed to examine the degree in which strengths and weaknesses of social and rational decision making techniques are present within the case and the inference of such observation for performance management practice or theory. The Impact of balanced scorecard usage of organizational performance - (Christesen, 2008) The purpose of this study is to find out whether there exists a connection between organizational performance and balanced scorecard by conducting an investigation on three industry segments including Financial Services, Utilities and Telecommunications. The significance of balanced scorecard and performance of the three industries was assessed by performing two statistical tests while a post-hoc test was performed to evaluate the differences between the industries. The results of the statistical tests showed that industry performance and balanced scorecard are statistically significant. However, it was found that the interaction between the industries and the balanced scorecard was statistically insignificant. Further, the statistical test found the return of assets to be statistically significant and net income to be insignificant against industry and scorecard. The post-hoc test found a strong statistical relationship between return on assets and energy and financial industries, but the relationship was less on telecommunication industry. Essentially, this study shows that it is important for Human Resource and Development (HRD) and management professionals to discover the impact and use of balanced scorecard before recommending it to their organizations. A Balanced Score Card Study on Performance Management System with Special Reference to Keltron - A Case Study Approach The purpose of this paper is to examine the strategic objectives making reference to the objectives of the Keltron organization and to build metric targets and tools for attaining the desired results. This study, which lasted for three months, was conducted by collecting primary data through a personal visit to the concerned organization. The study involved interviews of the employees and observing them. In addition to the primary data, secondary data were collected from the records of the organization as well as journals, websites and magazines that contained information regarding the activities of the organization. Collection of data was done by instruments such as structured interviews and structured questionnaires. Also, managers of Kelton were involved in the collection of data. The results of the study showed that Keltron creates innovative solutions through adoption, assimilation and integration of technology as a way of building a competitive advantage for its own survival in the industry. The achievements of this organization are based on making of technology as opposed to inventing of technology. Keltron has been involved in manufacturing of electronic appliances for a very long time and hence its strength is based on its strong experience and foundation that it has built over time. Furthermore, its nationwide network, a strong human capital and its ability to embrace change are fundamental strengths that have contributed towards its competitive advantages. Comparison of the results of the five papers The analysis of the five papers led to a realization that implementation of a balanced scorecard in organizations is a strategy that presents many advantages as well as challenges. Most importantly, the use of balanced scorecard has been presented as an essential tool that can be used by managers of different companies to make strategic decisions that could enhance performance in those organizations. In this regards, Bhatnagar et al. (2004) has revealed that the HRM can use the balanced scorecard to make strategic interventions in ITC Maurya, which lead to relearning of fresh performance. Cobbold, Lawrie and Issa (2004) has also demonstrated the impact of balanced scorecard on the effectiveness of social and rational decision-making approach applied by a team of managers, based on the manner in which each technique influences the behavior of managers. Strategic decision making is a process that is primarily aimed at promoting the performance of organizations, a concept that has been observed in a number of these papers. Bhatnagar et al. (2004) has, for example, investigated the manner in which a fresh performance based culture can be brought about by a strategic intervention that lead to successful implementation of a balanced scorecard technique. Christesen (2008) also demonstrated the relationship between balanced scorecard and organizational performance through their studies, which shows a statistical significance between the two variables. Innovation is also a fundamental contribution of balanced scorecards as a number of these papers have demonstrated. Bhatnagar et al. (2004) has found that successful implementation of a balanced scorecard in organizations leads to the enhancement of the innovation process. This observation has also been affirmed by Simeon (2012), who demonstrated how Keltron creates innovative solutions through its competitive technological strength. Despite the benefits that balanced scorecards bring about in an organization, the technique has also been shown to present some new challenges to the managers who would like to implement it in their organizations. Bhatnagar et al. (2004) has suggested that implementation of balanced scorecards can be challenging if all the stakeholders of the organization are not involved in the process, and also added that the non-managerial staff should also be involved to avoid rebellion when it comes to the implementation process. Their view is that the stakeholders of an organization will tend to negate introduction of changes in their organization if they were not involved during the whole process of bringing about change. Christesen (2008) has also presented a view that balanced scorecard implementation can be a big challenge if it is implemented without careful consideration of its impact in a particular organization. This observation is related to the fact that different factors will lead to different outcomes when a balanced scorecard is implemented and, therefore, a balanced scorecard should be designed to meet the needs and goals as well as the unique structure and operations of an organization in order to ensure that it is successfully implemented. Summary This analysis has presented balanced scorecard as a methodology that presents many benefits to organizations as well as new challenges. These benefits include better strategic planning, strategic and organizational alignment, management information as well as improved communication. All these are compelling benefits that are never realized if the project is implemented through short cuts or half-heartedly. All the stakeholders of an organization must throw their full energy and will towards implementation of balanced scorecard processes. If successfully implemented, it allows organizations to tie their mission statement to their goals and their daily activities and also ensures recognition of the concerns of the customers. It also leads to improvement techniques such as lean manufacturing and inculcate innovation and technology as a corporate goal. In essence, the balanced scorecard is a very important technique that can be used by organizations to enhance performance and as a result lead to a competitive advantage. References Bhatnagar et al., 2004. Managing Innovative Strategic HRM: The Balanced Scorecard Performance Management System at ITC Hotels. South Asian Journal of Management, 11(4), pp. 92-110. Chritesen, D., 2008. The Impact of balanced scorecard usage on organizational performance. ProQuest Dissertations and Theses, pp. 1-109 Cobbold, I., Lawrie, G. and Issa, K., 2004. Designing a strategic management system using the third-generation balanced scorecard: A case study. International Journal of Productivity and Performance Management, 53 (7), pp. 624-633. Ratnasingam, P., 2009. Service quality management applying the balanced scorecard: an exploratory study. International Journal of Commerce & Management, 19(2), pp.127- 136. Simeon, S., 2012. Balanced Score Card Study on Performance Management System with Special Reference to Keltron - A Case Study Approach. International Journal of Marketing and Technology2(4), pp.218-237. Yin, R. K., 1994. Case Study Research: Design and Methods, 2nd Edition. Newburry Park, Ca: Sage. Read More