The Evaluation of the Impact of using Balanced Scorecard on Strategic Performance in Small and Medium Enterprises

By

Master of Business in Strategy and Innovation Management

September 2011



ACKNOWLEDGMENT

I would like to thank almighty Lord for granting me the capability to proceed successfully. I would like to thank my supervisor, colleagues, and all those who helped me in completing this thesis, without their assistance and guidance this could not be possible. Last but not least, I would like to dedicate my thesis to all those who believe in the richness of learning



DECLARATION

I adjudge, the content of this dissertation is completely collected and done by unaided effort and the material in it, has not been published ever before. The opinion that is reflected in this dissertation is purely my opinion and does not represent any University's opinion.

Signature:

Dated:



ABSTRACT

In this research study the BSC significance has been discussed and analyzed, the organizations if implement the BSC model in the organizations only then the performance of the employees as well as the performance of the organizations will get improved. In this research study the mixed methodology has been used, in the quantities research methods the questionnaire are being filled and interviews are also be conducted from the company's managers. In this research study the close ended as well as the open ended questions are being used. Thus after analysis it can be proved that the performance of the organizations and employees can be improved by implementing the BSC model in the organizations.





TABLE OF CONTENTS

ACKNOWLEDGMENTii

DECLARATIONiii

ABSTRACTiv

TABLE OF CONTENTSv

CHAPTER 1: INTRODUCTION1

Overview1

Background of the Study2

The Balanced Scorecard3

The learning and growth perspective5

The internal business process perspective6

The customer perspective6

The Financial Perspective6

Aims and Objectives7

Aims7

Objectives7

Problem Statement8

Significance of the study8

Layout of the Dissertation9

CHAPTER 2: LITERATURE REVIEW10

Historical Foundations of Balanced Scorecard12

Theoretical background of Balanced Scorecard15

The performance of implementing the BSC21

Importance of Non-financial Performance Measures23

The advantages of adding qualitative perspective with the BSC25

Rise of tire Balanced Scorecard27

The importance of the balanced scorecard technique28

The Problems of the Balanced Scorecard30

The impact of the BSC on the organizations31

The Balanced Scorecard in the Non-Profit Setting34

The BSC's development35

Summary38

CHAPTER 3: METHODOLOGY40

Introduction40

Research Design40

Research Method and Design Appropriateness41

Research Methods42

Quantitative Aspect42

Qualitative Aspects43

Interview Questions43

Instrument44

Questionnaire44

Interview46

Role of the Researcher46

Research Ethics47

Confidentiality47

Informed Consent49

Understanding50

Voluntariness50

Competence50

Limitation of the study50

Literature Search51

Research Time Frame51

CHAPTER 4: ANALYSIS AND DISCUSSION52

Introduction52

Descriptive Analysis of the Questionnaire52

Section 155

Section Two58

Average number of competitors59

Schedules or Deadlines Regarding the Implementation of BSC60

Section Three61

Financial Returns Satisfy Shareholder Expectations61

Profitability, Economic Value Added62

Sales Growth63

Cash Flow Generated64

Return on capital employed (ROCE or EVA (Economic Value Added)65

Lead-Time Occurs and On Time Delivery (if applicable)68

The Balanced Scorecard provides management with a comprehensive picture of business operations69

Existence of measures of how well the company identifies the customers' future needs70

Existence of Cycle Time Measures73

Existence of post sales services measures - measures for warranty, repair and treatment of defects and returns74

Increase of Employee Retention75

Increase of Employee Training76

Increase of Employee Skills77

Increase of Employee Satisfaction78

Increase of Employee Morale / System availability & “front line” customer information79

Team member's cooperation maximized / Team members are focused on helping one another succeed80

Cross organizational team occur - More open channels of communications and Enthusiastic ...