The Balanced Scorecard: Judgmental Effects of Common and Unique Performance Measures

2000 ◽  
Vol 75 (3) ◽  
pp. 283-298 ◽  
Author(s):  
Marlys Gascho Lipe ◽  
Steven E. Salterio
Keyword(s):  
Performance Measures ◽  
Balanced Scorecard ◽  
Business Strategy ◽  
Business Processes ◽  
The Balanced Scorecard ◽  
Business Unit Performance ◽  
Balanced Scorecards ◽  
The Common ◽  
Unit Performance ◽  
Multiple Units

The balanced scorecard is a new tool that complements traditional measures of business unit performance. The scorecard contains a diverse set of performance measures, including financial performance, customer relations, internal business processes, and learning and growth. Advocates of the balanced scorecard suggest that each unit in the organization should develop and use its own scorecard, choosing measures that capture the unit's business strategy. Our study examines judgmental effects of the balanced scorecard—specifically, how balanced scorecards that include some measures common to multiple units and other measures that are unique to a particular unit affect superiors' evaluations of that unit's performance. Our test shows that only the common measures affect the superiors' evaluations. We discuss the implications of this result for research and practice.

scholarly journals THE PARADIGM OF STRATEGIC MANAGEMENT OF MULTINATIONAL CORPORATIONS ON THE BASIS OF THE BALANCED SCORECARD

2015 ◽  
Vol 1 (7) ◽  
pp. 43
Author(s):  
Olena Burunova ◽  
Sergii Gushko ◽  
Volodymyr Kulishov
Keyword(s):  
Strategic Management ◽  
Multinational Corporations ◽  
Balanced Scorecard ◽  
Business Strategy ◽  
Business Processes ◽  
Swot Analysis ◽  
Scenario Planning ◽  
Information Support ◽  
Support Mechanism ◽  
The Balanced Scorecard

The paper investigates the process of strategic management and missions of a multinational corporation on the basis of the model of the balanced scorecard (BSC) formation. Due to the trends in modern management, the development of a company’s strategy, and the estimation of its efficiency are carried out with increasing frequency by means of scorecards. Thus, the aim of the research is to explore the paradigm of strategic management of multinational corporations within the framework of implementation of the model of an enterprise scorecard in an ERP system. The topicality of the research is determined by the necessity to implement the worked out in detail monitoring of company’s activity in a strategic focus, which will allow increasing the operationability and efficiency of administrative decisions and controlling the most essential financial and non-financial performance indices. In the course of work, the authors were guided by the principles of systemic and dialectical approaches to explore the problem. Thereat methods of logic and factor analysis, swot analysis, scenario planning, approaches to grouping, comparison, generalization, interconnection of the theoretical and practical aspects of the work of multinational corporations were used. They serve to deepen the theoretical and methodological aspects referred to the formation of the accounting and analytical information and implementation of the balanced scorecard model in the process of institutionalization of informative economy. It is well-proven that optimization of a business strategy of companies contributes to realization of the information support mechanism of the accounting and analytical systems under the condition of ERP introduction- systems for the improvement of methods of accounting, control and analysis. It gives an opportunity to efficiently manage the resources of corporations, to regulate their production load, to control quality and push their products forward to foreign markets. It has been found out that, taking into account these tendencies, it is possible to construct a pay card of the system of indices according to the levels of acceptance of administrative decisions on the basis of all main business processes of a corporation.

scholarly journals LINKING BALANCED SCORECARD MEASURES TO SMES’ BUSINESS STRATEGY: ADDRESSING THE MODERATING ROLE OF FINANCIAL RESOURCES

2015 ◽  
Vol 3 (12) ◽  
pp. 92-99
Author(s):  
Mahshid Lonbani ◽  
Saudah Sofian ◽  
Mas BambangBaroto
Keyword(s):  
Performance Measures ◽  
Balanced Scorecard ◽  
Business Strategy ◽  
Business Processes ◽  
Small And Medium Enterprises ◽  
Financial Resources ◽  
Financial Measures ◽  
Medium Enterprises ◽  
Moderating Role

Using financial and non-financial measures, the Balanced Scorecard (BSC) approach evaluates different aspects of firms’ performance: financial, customer, learning and growth, and internal business processes. Resource flexibility and availability of financial resources are basically highlighted as separate antecedents of company’s performance. Grounded on resource based view, the role of financial resources on business strategy has been addressed numerously in previous studies.  However, there is limited study to evaluate the role of financial resources on relationship between business strategy and BSC performance measures. Especially there is no study addressing this issue according to the moderating role of financial resources among small and medium enterprises (SMEs). It is worth mentioning that such relationships and models can be more highlighted in a developing countries since financial resources has been debated to be weak in theses context. Grounded in contingency theory, an evaluation of the moderating role that financial resources plays in the relationship between SMEs’ business strategy and balanced scorecard performance measures in SMEs points to the value of providing enough resources for SMEs. External fund providers such as banks and loan providers can help SMEs in this regard since firms could pass the way from business strategy to superior BSC performance measures more successfully.

The Balanced Scorecard: Judgmental Effects of Performance Measures Linked to Strategy

2004 ◽  
Vol 79 (1) ◽  
pp. 1-23 ◽  
Author(s):  
Rajiv D. Banker ◽  
Hsihui Chang ◽  
Mina J. Pizzini
Keyword(s):  
Customer Satisfaction ◽  
Performance Measures ◽  
Balanced Scorecard ◽  
Business Strategy ◽  
Statistical Test ◽  
Performance Evaluations ◽  
Business Unit ◽  
Test Results ◽  
Financial Measures ◽  
The Balanced Scorecard

The balanced scorecard provides a framework for selecting multiple performance measures that supplement traditional financial measures with operating measures of customer satisfaction, internal processes, and learning and growth activities. An essential aspect of the balanced scorecard lies in its articulation of the linkage between performance measures and business strategy. This study conducts an experiment to assess how individuals' evaluations of the performance of business unit managers depend on strategically linked performance measures of a balanced scorecard. Statistical test results indicate that performance evaluations are influenced by strategically linked measures more than non-linked measures only when evaluators are provided detailed information about business unit strategies. The results also confirm Lipe and Salterio's (2000) finding that evaluators rely more on common measures than on unique measures. Evaluators rely more on strategically linked measures than on common measures when they are provided information on strategic linkages, but the reverse relation holds when they are not.

scholarly journals ALGORITHMS FOR EVALUATING THE EFFICIENCY OF THE BUSINESS PROCESSES OF ENTERPRISE BASED ON A BALANCE SCORE CARD

2021 ◽  
Vol 2 (336) ◽  
pp. 66-73
Author(s):  
S. Israilova ◽  
A. Mukhanova ◽  
A. Satybaldiyeva
Keyword(s):  
Balanced Scorecard ◽  
Business Strategy ◽  
Business Processes ◽  
Weighted Average ◽  
Holistic Approach ◽  
The Balanced Scorecard ◽  
Management Actions ◽  
Score Card ◽  
Efficiency And Effectiveness ◽  
Effective System

The article presents an algorithm for analyzing and evaluating the effectiveness of business processes of enterprises. Modern enterprises must have a well-thought-out and effective system of managing their activities for sustainable competitiveness, which can be achieved on the basis of certain methodological approaches. The profit that is the purpose of the functioning of Kazakhstan enterprises in many cases cannot be obtained, due to the incorrect operation of business processes and the allocation of appropriate resources. Constant modernization of enterprises is a financially costly solution to the problem of ensuring planned income. At the same time, the modernization of the enterprise should be carried out only after a deep analysis and assessment of the "bottlenecks" of the company's business processes. The purpose of the study is to determine the methodology for analyzing and evaluating the business processes of Kazakhstani enterprises in the field of service provision. The proposed methodology is designed to identify "problem" areas of specific business processes by calculating weighted average, integral and generalized indicators of efficiency and effectiveness. This allows you to assess the state of both individual business processes of enterprises and their totality, as well as to set priorities for management actions to improve them. While previous research has attempted to use tools and models to visualize technological business planning, limited previous research has focused on strategic planning modeling. Due to the problems associated with the lack of guidelines for business strategy modeling, a holistic approach is needed. Using the balanced scorecard evaluated the efficiency and effectiveness of business processes on criteria and indicators allow you to monitor current activity and to evaluate the effectiveness of its operations at any time.

DISCUSSION OF: Testing Strategy with Multiple Performance Measures: Evidence from a Balanced Scorecard at Store24

2015 ◽  
Vol 27 (2) ◽  
pp. 67-73 ◽  
Author(s):  
Clara Xiaoling Chen
Keyword(s):  
Performance Measurement ◽  
Performance Measures ◽  
Balanced Scorecard ◽  
Business Strategy ◽  
Business Models ◽  
Performance Measurement System ◽  
Future Research ◽  
The Balanced Scorecard ◽  
Performance Measurement Systems ◽  
Using Data

ABSTRACT The Campbell, Datar, Kulp, and Narayanan (2015; hereafter, CDKN) study empirically investigates how the quality of a firm's business strategy can be tested and validated using statistical analysis of the firm's internal performance measurement system. Using data from the balanced scorecard of a convenience store chain, their study provides empirical evidence that the company's internal performance measures reveal timely information about problems with the strategy and can help identify where and why the strategy failed. In this brief discussion of the study, I first summarize the major strengths of their study, then discuss my concerns and comments, and finally point out some potential extensions. In summary, CDKN's study is important in that it makes significant contributions to several streams of literature. CDKN have inspired follow-up studies on the use of performance measurement systems to evaluate strategy and the testing of business models, and has opened up exciting opportunities for future research.

Balanced Scorecard: Myth and Reality

2005 ◽  
Vol 30 (1) ◽  
pp. 51-66 ◽  
Author(s):  
I M Pandey
Keyword(s):  
Strategic Planning ◽  
Performance Measures ◽  
Balanced Scorecard ◽  
Success Factors ◽  
Business Processes ◽  
Planning Process ◽  
Tracking System ◽  
Successful Implementation ◽  
Strategic Planning Process ◽  
The Balanced Scorecard

The performance improvement process is a critical component of the strategic planning process. Call it by any name, the process is very vital, and it has always been practised by many companies worldwide for a long time. This process has been recently dubbed as the balanced scorecard. The balanced scorecard is a system of combining financial and non-financial measures of performance in one single scorecard. It includes performance measures for four perspectives: financial, customer, internal business processes, and learning and growth (innovation). It need not be restricted to four perspectives; more may be added. The social responsibility and environmental concerns are two possible candidates. The balanced scorecard focuses on the link between business processes and decisions and results. It is considered as a device to guide strategy formulation, implementation, and communication. It also helps in tracking the performance and providing quick feedback for control and evaluation. A number of companies in the USA and a few companies in India have implemented the balanced scorecard. The success of the balanced scorecard or a similar device will depend on the clear identification of non-financial and financial variables and their accurate and objective measurement and linking the performance to rewards and penalties. The proponents of the balanced scorecard claim that it aligns with strategy leading to better communication and motivation which causes better performance. This assumption could be the single most important reason for the popularity of the balanced scorecard. However, this may or may not be true in practice. This is an empirical question. There is a need to document the experiences of the balanced scorecard companies and establish the cause-effect relationship. There are several reasons for the use of the balanced scorecard by organizations: The balanced scorecard is a comprehensive tool to understand the target customers, their requirements, and the performance gaps. The balanced scorecard provides logic for focusing on creating intangible and intellectual capital which under the traditional financial performance systems was difficult to do. The balanced scorecard is able to articulate the strategy of growth with business excellence which requires greater focus on non-financial initiatives. The balanced scorecard enables employees to understand strategy and link strategic objectives to their day-to-day operations. The balanced scorecard facilitates performance review and feedback on a continuous basis. The balanced scorecard, we strongly believe, will be useful to an organization when it is a part of the strategic planning process. A successful implementation of the balanced scorecard has the following other prerequisites: Top management commitment and support Determining the critical success factors (CSFs) Translating CSFs into measurable objectives (metrics) Linking performance measures to rewards Installing a simple tracking system Creating and linking the balanced scorecards at all levels of the organization Setting up a sound organizational communication system to harness advantages of the balanced scorecard Linking strategic planning, balanced scorecard, and budgeting process for better allocation of resources.

scholarly journals Penilaian Kinerja Berbasis Balanced Scorecards (BSC) untuk Melakukan Rancang Ulang Strategi Bersaing

2021 ◽  
Vol 9 (1) ◽  
pp. 41
Author(s):  
Asdiana Dua Sumban ◽  
Diana Zuhroh ◽  
Parawiyati Parawiyati
Keyword(s):  
Balanced Scorecard ◽  
Business Strategy ◽  
Qualitative Method ◽  
Swot Analysis ◽  
Efficiency Index ◽  
The Balanced Scorecard ◽  
Satisfaction Index ◽  
Normal Period ◽  
Strategic Location ◽  
Balanced Scorecards

The objectives of this study are to evaluate the performance of the Kusuma Agrowisata Hotel during the Covid-19 pandemic and to design the business strategy for the Hotel in new normal period. This research applies the quantitative and qualitative method. The data were obtained using questionnaires and interview and analyzed by applying descriptive statistics, using the Balanced Scorecard and SWOT analysis. The result shows that the hotel was less successful in improving revenue and efficiency. However the customers were satisfied and the hotel was able to achieve the company's strategy efficiency index and the staff satisfaction index. The SWOT analysis found out that there was S-O Strategy which could be done by keeping the room prices competitive, providing children’s playground, keeping the good image, having a strategic location, maintaining the friendliness, maintaining the surrounding natural environment, keeping the guest demand fulfilled, reopening various tourist sites and setting strategies to eliminate customers boredom.

The Balanced Scorecard: The Effect of Strategy Information on Performance Evaluation Judgments

2011 ◽  
Vol 23 (1) ◽  
pp. 81-98 ◽  
Author(s):  
Kerry A. Humphreys ◽  
Ken T. Trotman
Keyword(s):  
Boundary Condition ◽  
Performance Evaluation ◽  
Performance Measures ◽  
Balanced Scorecard ◽  
Research Finding ◽  
Complex Task ◽  
Managerial Performance ◽  
The Balanced Scorecard ◽  
The Common

ABSTRACT Judging divisional performance using the balanced scorecard is a complex task, with prior research finding a bias toward measures common to two divisions when managerial performance is evaluated. We conduct two experiments investigating the role of strategy information and strategically linked performance measures in eliminating this bias and establish a boundary condition for the common measures bias. We demonstrate that when strategy information is provided to managers and only some measures are strategically linked, the common measures bias exists (consistent with Banker et al. 2004). We find that when all the performance measures are strategically linked, but no strategy information is provided, the common measures bias also exists. However, if strategy information is provided and all measures are strategically linked (a condition which did not exist in previous research), the common measures bias is eliminated.

scholarly journals The relationship between employee and customer satisfaction in the balanced scorecard

2014 ◽  
Vol 9 (3) ◽  
pp. 285-298 ◽  
Author(s):  
DG Gouws ◽  
A Habtezion ◽  
FNS Vermaak ◽  
H P Wolmarans
Keyword(s):  
Customer Satisfaction ◽  
Empirical Study ◽  
Performance Measures ◽  
Balanced Scorecard ◽  
Employee Satisfaction ◽  
Direct Relationship ◽  
Preliminary Testing ◽  
The Balanced Scorecard ◽  
Key Drivers ◽  
The Relationship

This paper reports evidence of a direct relationship between employee satisfaction and customer satisfaction as they are linked in the balanced scorecard. The objective was to propose a framework that shows the linkage between employee satisfaction and customer satisfaction and to undertake some preliminary testing of this framework. An empirical study was undertaken in an airline business which investigated these relationships between employee and customer satisfaction and the correlations between these performance measures. The relationship between the key drivers of employee satisfaction and the key drivers of customer satisfaction was also investigated. The study provides empirical evidence supporting several linkages.

scholarly journals Performance analysis of pharmaceutical installation as basic of feasibility: a self-based business unit into general services agency

2019 ◽  
Vol 6 (6) ◽  
pp. 229-238
Author(s):  
I Made Agus Yogeswara Wibawa ◽  
I. G. B. Wiksuana
Keyword(s):  
Balanced Scorecard ◽  
Public Hospital ◽  
Business Processes ◽  
Balanced Score Card ◽  
Service Agency ◽  
Business Unit ◽  
The Balanced Scorecard ◽  
The Public ◽  
Score Card ◽  
Level Of Satisfaction

This study aims to determine the performance of the Pharmaceutical Installation as a basis for becoming an independent business unit in order to go to the Public Service Agency (BLU) at the Public Hospital in Denpasar, Bali. Performance measurement is a process of evaluating work progress against pre-determined goals and objectives and the results of activities are compared with the intended intentions; and the effectiveness of actions in achieving goals. In this study using a strategic mechanism in the form of a Balanced Score Card (BSC). Data collection techniques such as documentation, questionnaires, and observations. The data analysis technique used is the financial ratios for the financial perspective, the level of satisfaction for the customer perspective, the level of satisfaction for the perspective of growth and learning, while for the perspective of internal business processes using minimum service standards. The results of the 4 perspectives from the Balanced Scorecard show that the performance of the Pharmacy Installation at the Public Hospital in Denpasar is good and deserves to be an independent business unit.

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