The not a template that can be

The balanced scorecard is a performance management strategy tool,   supported by design methods and automation tools, that used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. It is  a visual tool used to measure the effectiveness of an activity against the strategic plans of a company. The Balanced Scorecard developed by Kaplan and Norton in 1992 (Kaplan and Norton, 1992) is one of the most widely used management tools today. It is implemented in many large organisations, including Mobile, Cigna (Kaplan and Norton, 1996; 2001; 2004). The Balanced Scorecard is not a template that can be applied to businesses in general or even industry-wide. Different market situations, product strategies and competitive environments require different scorecards. Business units devise customized scorecards to their mission, strategy, technology and culture. In fact, a critical test of a scorecard’s success is its transparency: from 15 to 20 scorecard measures, an observer should be able to see through to the business unit’s competitive strategy. Kaplan and Norton 1993) Balanced scorecards are often used in strategic planning to ensure the company’s efforts are aligned with overall strategy and vision. It was created to help businesses evaluate their activities with more than just a straight financial eye using revenues, costs, and profits. The diagram or chart  presents a balanced view that also takes into account other perspectives of success. It  examines the initiatives of a company from four different perspectives consist of  Financial, Learning & Growth, Business Processes, and Customer. These activities are noted in the appropriate buckets with stated measures, targets, and objectives for data collection and analyzing. The activities can be measured and  evaluated and assessed properly. It also translates vision and strategy of the organisation, defines the strategic linkages to integrating performance across an organisation, communicates objectives and measures to a business unit, and aligns strategic initiatives. Balance scorecard aligns every employee and employers  within an organisation so that all employees understand how and what they can do to support the strategy. It use as a basis for compensation and provides feedback to management as to see if the strategy is working.   Dr. David P. Norton and Robert S. Kaplan (1992) started a working group to examine the challenge of reporting only on financial measures. In profit organizations, financial measures provided a lagging report but they were not able to look forward. Norton and Kaplan wanted to specifically look at what measures that look forward in time and act as leading indicators and how that could affect an organization’s strategy. Some SMEs only in some parts of PMS or modify the models without carefully investigating the impact of such modification (CIMA, 1993). Researcher  also found that SMEs rarely implement PMS as a holistic approach (Barnes et al. 1998; Rantanen and Holtari, 2000) and measures in their model are more focused on operational and financial performance and lack measures dealing with other areas (Addy et al. 1994; Chennell et al. 2000; Hudson et al. 1999). Literature reporting on the uses and limitations of the Balanced Scorecard in small and medium-sized enterprises (SMEs) is very small and rare. Most SMEs are not aware of this technique and the usage rate is very low compared to large organisations (Tennant and Tanoren, 2005).  However the Balanced Scorecard is believed to be as beneficial for SMEs as it is to large organisations (McAdam, 2000; Andersen et al 2001; Kaplan and Norton, 2001). Although there is some literature concluding that there is an absence of a balanced PMS model for SMEs or even that the Balanced Scorecard is not appropriate for SMEs (McAdam, 2000), the concept of the Balanced Scorecard has been used successfully in a number of small organisations that have employees ranging 12 person and above  to  hundreds.  (Kaplan and Norton, 2001, p. 369). In order to implement the performance measurement framework successfully in SMEs, it has been suggested that only the most critical performance indicators be selected and utilised because SMEs have severely constrained resources (Hvolby and Thorstensen, 2000). The clarification of objectives for an SME is another important factor that can affect the success or failure of its performance measurement framework (Tenhunen et al 2001). Others factors like   support and commitment from the owner and manager, the main purpose of the PMS, support from employees (Tenhunen et al 2001), good cooperation between departments, and the use of standard hardware and software systems  are important. (Fernandes et al 2006). Factors that can be barrier  to PMS implementation in SMEs are pointed out in numerous studies like  limited human resources (Noci, 1995), limited capital resources (Burns and Dewhurst, 1996; Ghobadian and Gallear, 1997; Neely and Mills, 1993), absence of supporting software (Bititci et al. 2002), lack of strategies resulting in short-term orientation (Brouthers et al. 1998), and no formalisation of the processes (Jennings and Beaver, 1997; Martins and Salerno, 1999).


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