The Customer Service Perspective

Aertcle Summary

The basic objective of this article is to evaluate the efficacy of the balanced scorecard within a small business context. While the list of major corporations and public institutions that have adopted some form of the balanced scorecard continues to grow, as yet there is little research into its adaptability to the small business. Because a full-scale balanced scorecard system entails a fairly intensive implementation effort, it cannot be prescribed indiscriminately across the spectrum of small enterprises. Accordingly, a stages of development framework is employed to help categorize smaller firms, assess their respective planning needs and identify segments where the balanced scorecard approach can be applied advantageously. On this basis, it is proposed that for small companies where both the degree of managerial complexity and the prospects for extensive change are high, the balanced scorecard can be a useful mechanism for managing organizational change. A number of important implementation issues are also explored and some directions for future research are identified. 2

In response to technological advances, the globalization of markets and growing demands for social accountability, business enterprises of all sizes are developing quality assurance programs, adopting more efficient, yet environmentally friendly processes, and directing more effort into the cultivation of their relationships with customers, employees and the local community. This “new competitive landscape” (Cooper, 1996) has brought about increased emphasis on accountability and performance measurement. This trend has resulted in a premium being placed on reliable and comprehensive information flows. It is within this context that the balanced scorecard (BSC) has gained widespread usage as a tool for strategy implementation.

In order to identify and maintain a position of competitive advantage, the entrepreneurial firm must be capable of gathering and interpreting relevant information (Jacobson, 1992). Accordingly, there is a need for information flows that encompass both traditional financial measures as well as the key operating measures that drive performance. The BSC provides a systematic approach to the development and monitoring of an integrated set of performance measures, both financial and non-financial, designed to translate strategy into action. The BSC has been implemented in a wide variety of organizational settings. The Connecticutbased Gartner Group Inc. has estimated as of the year 2000, the BSC system will have been implemented 40 percent of the Fortune 1000 companies. While the BSC has been hailed as one of the most significant developments in contemporary management accounting (Atkinson et al., 1997), ...