The Balanced Scorecard in Decision Making

This assignment delves into the Balanced Scorecard, a performance management tool used for strategic decision-making. It examines the core principles of the Balanced Scorecard, its four perspectives (financial, customer, internal processes, and learning & growth), and how it measures organizational success beyond just financial indicators. The assignment also explores various online resources that provide insights into the Balanced Scorecard framework.

The Effect of Balanced Scorecards on Decision
Making in the Oil and Gas Industry
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TABLE OF CONTENTS
CHAPTER- 1 INTRODUCTION ...................................................................................................4
1.1 Introduction............................................................................................................................4
1.2 Problem statement..................................................................................................................7
1.3 Research questions.................................................................................................................7
1.4 Research objectives................................................................................................................8
1.5 Research contribution............................................................................................................8
1.6 Limitation of the study...........................................................................................................8
1.7 Definition of terms.................................................................................................................9
1.8 Significance of the study......................................................................................................10
1.9 Research organizing.............................................................................................................11
CHAPTER- 2 LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT.....................12
2.1 Introduction..........................................................................................................................12
2.2 Previous Studies on Dependent Variable:............................................................................12
2.2.1 Decision Making...............................................................................................................12
2.2.2 The Decision Making Process..........................................................................................12
2.2.3 Types of Decisions............................................................................................................13
2.3 Previous Studies on Independent Variable (IV)..................................................................14
2.3.1 Balanced Scorecards:........................................................................................................15
2.3.2 The Need for Balanced Scorecards:..................................................................................17
2.3.3 Types of Balanced Scorecards Perspectives:....................................................................18
2.3.4 The Effect of Balanced Scorecards on Decision Making.................................................20
2.3.5 Benefits of balance scorecard...........................................................................................22
2.3.6 Challenges of using The balance scorecard......................................................................23
2.4 Research Framework:..........................................................................................................24
2.5 Hypothesis Development:....................................................................................................24
2.6 Summary:.............................................................................................................................25
CHAPTER- 3 RESEARCH METHODOLOGY...........................................................................26
3.1 Introduction..........................................................................................................................26
3.2 Research Design...................................................................................................................26
3.3 Population and Sampling.....................................................................................................28
3.4 Instrumentation....................................................................................................................28
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3.5 Data Collection....................................................................................................................30
3.6 Scale Reliability...................................................................................................................30
3.7 Data analysis........................................................................................................................31
3.8 Research approach...............................................................................................................31
3.9 Research philosophy............................................................................................................32
3.10 Research type.....................................................................................................................33
3.11 Ethical consideration..........................................................................................................34
3.12 Research limitation............................................................................................................35
3.13 Summary............................................................................................................................36
REFERENCES .............................................................................................................................37
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CHAPTER- 1 INTRODUCTION
1.1 Introduction
Effective decision making on employee resources can lend itself to the continued
progression and growth of a specific company. For those employees that have a great amount of
knowledge and potential, upward mobility and opportunity are vital to keeping those types of
employees within the company (Campbell, Ganco, Franco and Agarwal, 2012). These business
tools have helped business units in making informed business decisions which has enhanced the
overall growth and success aspects of the business units.
In every business, employees are considered as the firm's most valuable asset. It means
that firm's productivity and profitability depends upon ensuring that the worker's performance
needs to exceed to their full potential. That profitability and performance is often based upon the
knowledge of those specific employees. It is an instrumental part of a company’s survival to
maintain a knowledgeable and effective workforce (Willax P, 2007).
To survive and prosper in current economic times, businesses can no longer manage
using financial methods alone but should focus upon improving non-financial measures such as
product quality, customer satisfaction and learning in order to attain desired objectives. Using
Balanced Scorecards is a beneficial method in order to attain sustainable development of the firm
and it will lead business to the level of success which helps management to make effective
decision making (Khedr, Abdel-fattah & Solayman, 2015).
Balanced Scorecard (BSC) refers to a “strategic planning and management system”
which is used extensively in industries, businesses, Non-Governmental Organizations (NGOs)
and even in governments across the world in order to align business activities to their strategy
and vision. (Bhagwat and Sharma, 2007).The electronic BSC scheme aims to support e-business
managers during the business strategy making process (Wang, Mora and Raisinghani, 2015).
Balance scorecard is regarded as strategy performance tool- a semi standard structured report
which is assisted by design methods as well as automation tools that can be utilized by the
managers for keeping the track of execution of activities by the staff in their control. Further it
can be utilized towards monitoring the consequences that are arising from such actions. Several
business has made adoption of balance scorecard. The experience that is being gained by them
from using it is that it has assisted in meeting the various managerial requirements. Balance
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scorecard is effective in bringing together in a particular management report, many of the
seemingly disparate elements of a company’s competitive agenda: becoming customer oriented,
shortening response time, improving quality, emphasizing teamwork, reducing new product
launch times, and managing for the long term.
Second, the scorecard guards against suboptimization. By forcing senior managers to
consider all the important operational measures together, the balanced scorecard lets them see
whether improvement in one area may have been achieved at the expense of another. Even the
best objective can be achieved badly. (Bhushan and Rai, 2007). Companies can reduce time to
market, for example, in two very different ways: by improving the management of new product
introductions or by releasing only products that are incrementally different from existing
products. Spending on setups can be cut either by reducing setup times or by increasing batch
sizes. Similarly, production output and first-pass yields can rise, but the increases may be due to
a shift in the product mix to more standard, easy-to-produce but lower-margin products (Kaplan
and Norton, 2017).
The approach of Balance scorecard possess four perspectives. This is comprised of financial,
internal business processes, learning and growth as well as customer. Each one of the four
perspective is interdependent. Further the enhancement in single area is not important recipe for
the success within other fields.
Background of the study
During the last decade, most researchers and academics have devoted some of their time
to increase attention to not only the measurements of organizational performance, but also
towards the usage of the Balanced Scorecard (BSC) on it as well as on the strategic planning.
BSC is used not only for decision making, but also for managers motivation (Agostino, Deborah
& Arnaboldi, 2012). Since it was developed by Kaplan Norton in the year 1992, the use of the
BSC has been adopted widely by various organizations across the world. It has greatly evolved
from a tool that is used in measuring performance to an instrument used in the implementation of
strategy. Norton & Kaplan published “The Balanced Scorecard: Measures that drive
performance”. This thesis described how BSC can assess the activities of both tangible and
intangible assets of an organization (Kaplan & Norton, 1992).
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Over the past 25 years there has been a revolution of performance measurement
techniques and frameworks. The BSC can be considered one of the most popular tools to be used
(Sun, Weihan, 2013). The use of the Balanced Scorecards has a significant effect on most of the
decision makers. The tool is available to managers for use in facilitating strategic decision
making and enhancing the strategy development process in their organizations (Tapinos,
Efstathios, Dyson & Meadows, 2011). This is attributed to the fact that BSC is used in respect to
the achievement of target strategic goals of operation and development by decision makers in the
oil and gas industry.
The use of BSC helps in the promotion of an organization’s strategy realization and also
helps organizations to select the most preferred strategies that can effectively be applied in their
specific organizations (Fill, Busa & Puskás, 2015). BSC is an example of such one instrument
that is used by decision makers in the oil and gas industry. It is important to note that the BSC is
capable of transforming the strategic plan of organizations in the oil and gas industry from an
attractive and passive document to provision of orders for such organizations. This is because it
provides an effective framework for the performance measurements and also helps decision
makers to identify what needs to be done as well as what needs to be measured. In Addition,
BSC is being used: to manage the strategy or to provide information for decision-making
(Banchieri, Planas & Rebull, 2011).
The balanced scorecard has evolved from its early use as a simple performance
measurement framework to a full strategic planning and management system. The “new”
balanced scorecard transforms an organization’s strategic plan from an attractive but passive
document into the "marching orders" for the organization on a daily basis. It provides a
framework that not only provides performance measurements, but helps planners identify what
should be done and measured. It enables executives to truly execute their strategies (Balanced
Scorecard Basics,2017).
The balanced scorecard revolutionized conventional thinking about performance metrics.
When Kaplan and Norton first introduced the concept, in 1992, companies were busy
transforming themselves to compete in the world of information; their ability to exploit
intangible assets was becoming more decisive than their ability to manage physical assets. The
scorecard allowed companies to track financial results while monitoring progress in building the
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capabilities needed for growth. The tool was not intended to be a replacement for financial
measures but rather a complement—and that’s just how most companies treated it (Kaplan and
Norton, 2007).
1.2 Problem statement
One of the problem statements is that some of the decision makers are not satisfied with
the end results from decision making solutions and this leads in the failure in having a clear
understanding regarding what should be measured. This has made such decision makers to
become unable to effectively clarify both the strategy and mission of their industries (Wiersma,
Eelke, 2009).
One of the tools used to improve decision making is using the application of BSC has
actually emerged as one of the most critical issues facing most of the organizations across the
world. In fact that most of the organizations across the world have adopted the use of BSC. In
addition to that, the BSC was established with the aim of helping executives and managers to
have an additional strategic “non-financial measures” to the traditional financial metrics. BSC as
being the fifth on the top ten management tools that were widely applied across the world. It is
found that some of the organizations have not yet realized the importance of a BSC (Sun,
Weihan, 2013).
1.3 Research questions
The study is to find the effect of Balanced Scorecard on Decision Making. The dependent
variable is here is the Decision Making (DM) and the Independent Variable is the Balanced
Scorecard (BSC). The study will answer the following main question: To what extend does BSC affect decision making in the oil & gas industry.
Sub questions:
1a. To what extend does the Financial Perspective of BSC affect decision making in the oil &
gas industry.
1b. To what extend does the Customer Perspective of BSC affect decision making in the oil &
gas industry.
1c. To what extend does the Internal Processes Perspective of BSC affect decision making in
the oil & gas industry.
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1d. To what extend does the Learning & Growth Perspective of BSC affect decision making in
the oil & gas industry.
1.4 Research objectives
The main aim of carrying out this thesis study is to: To examine the effect of Balanced Scorecard on Decision Making in the Oil & Gas
Industry.
Sub objectives:
 To examine the effect of the Financial Perspective of BSC on Decision Making in the Oil
& Gas Industry.
 To examine the effect of the Customer Perspective of BSC on Decision Making in the Oil
& Gas Industry.
 To examine the effect of the Internal Processes Perspective of BSC on Decision Making
in the Oil & Gas Industry.
 To examine the effect of the Learning & Growth Perspective of BSC on Decision Making
in the Oil & Gas Industry.
1.5 Research contribution
It can be said that this is the first study conducted in oil & gas industry. It focuses upon
identifying the effects of BSC so that it helps decision makers to enhance the performance of
employees and make crucial decision to attain success. As mentioned above, this study would
contributed to the body of the knowledge since this is the first study to be conducted in oil & gas.
Also, the quality and significance of research will highly depend upon the contribution that
research will help in adding it as a value. A research work could be justified thoroughly through
assessing the results and importance of study based on these considerations.
Through carrying out the present research it results in helping different individuals such
as companies, people and other related parties. The research study assists in helping the decision
makers of different sectors to identify the significance of BSC in order to implement that results
that can be attained. Also the finding of this study would contributed to the field by influencing
the regulators and policy makers to implement BSC as enhancements of decision making.
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1.6 Limitation of the study
In identifying the sample size from the oil and gas industry at the time of study is crucial
so that the thesis can be carried out effectively. Small sample size affects the thesis and thus it is
essential for researcher to enhance the target sample so that different opinion can be viewed from
them in order to enhance the results of study. Identified limitations need to be overcomed so that
success can be attained in an effective way. Another issue identified is measuring instruments in
order to improve the validity of the study.
Also, within the study of the results which assesses that outcomes identified should not
be general either they should be specific. So, limitation of variables helps firms to obtain and
bring positive results so that success can be attained.
Time is limited also to the returns of feedback in a limited period to complete the thesis in the
demanded time.
1.7 Definition of terms
For this study, the below definitions of terms are used
Decision Making: “the procedure of reducing the gap between the existing situation and the
desired situation through solving problems and making use of opportunities” (Rizun &
Taranenko, 2014).
Balanced Scorecard: This refers to a strategic planning as well as management system used in
organizations to align their business activities with their strategy and vision. defined Balanced
Scorecard is a management tool that supports the successful implementation of corporate
strategies (Figge, Frank, 2002). Balanced scorecard refers to a system by which an organization
assesses key performance measures from perspectives of performance in the financial, customer,
internal business processes, learning and growth. These are means by which each member of
staff performing key functions are expected to measure their performances on the job especially
their contribution to organization goals of increasing organization’s wealth and profitability. The
application of the balanced scorecard involves strategizing in the use of available resources such
as human manpower, finances and other resources to attain set goals. A very pertinent link to
maximizing organization wealth is profitability. Profit making is essential because it is the
measure of performance on production of goods or services and it is the means by which the
future of the firm is assured (Ester, 2013).
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Decision Maker: This refers to an individual who is tasked with the responsibility of deciding
things or issues especially at high organizational levels within a specific organization. A
decision maker can also be defined as an individual who is tasked with the responsibility of
administering a specific organization or business entity.
Management: Management refers to a process of controlling or dealing with people or things.
Management can also be defined as a composition of interlocking functions of developing
corporate policy, planning, directing, controlling, and organization organizational resources so as
to achieve the policies of a set objective. Through overcoming different limitations positive
results can be attained to obtain best results (Chalmeta & Palomero, 2011).
1.8 Significance of the study
The present investigation is suitable in making assessment regarding the effects of
balance score card on the decision making in oil and gas sector. Moreover it assist in attaining
deeper knowledge with respect to need of balance scorecard. The importance of the present
thesis has been enumerated in the manner stated as below:
 It facilitates the academicians in carry out PH.D. In addition to this the present thesis
offers greater deal of knowledge regarding the feasibility of balance score card in the
process of decision making.
 There is presence of huge significance of present thesis for the organization that carrying
out operations in oil and gas sector. Such firms can get knowledge with respect to
feasibility in incorporating such tool for the measurement of organizational performance.
 The present investigation is of greater benefit for other investigators who are conducting
the research on particular subject. Through this, they are able to attain adequate amount
of knowledge with respect to effectiveness of using the particular tool in oil and gas
sector.
 The present investigation also possess huge significance for the thinkers as it
demonstrates innovative knowledge with respect to the tools which can be incorporated
within the investigation.
 The present research has importance as it is by nature complex for the organization.
Through the assistance of this investigation attention can be given over addressing the
operational issues that are associated with the firm.
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 Along with this the investigation is significant for the researcher and intellectuals as
through this they can make generalization of the new theories with respect to
phenomenon under subject matter.
Thus present thesis is regarded fountain of knowledge and further it is regarded as
important source that provide guidelines towards resolving the various social and issues relating
with the business. It is considered as the formal training that act as an aid in gaining insight to the
new developments within the sector in an appropriate way.
1.9 Research organizing
This thesis is composed of five major chapters. Chapter one of the thesis deals with the
introduction in which the definition of the BSC is given. Chapter one also deals with the
background of the study, problem statement, research objectives, research questions, research
contribution, scope of the study, operational definition of the major terms which have been used,
and finally, it presents a summary of the whole chapter.
The second chapter of the thesis is the literature review and it presents previous studies
regarding the issue of BSC and offers a discussion on why there is need for organizations to have
Balanced Scorecards. In addition to that, the second chapter of the thesis also offers a discussion
on the various types of the Balanced Scorecards and also offers a discussion on the perspectives
of the balanced scorecards. Decision making process in organizations among other aspects have
also been discussed in the second chapter.
The third chapter is the Research Methodology part the research design, population and
sampling, data collection and data analysis. The fourth chapter mostly deals with statistics and
frequencies. It continued to advanced analysis. Finally, the fifth chapter presents the
introduction, discussion, recommendations, future research and conclusion.
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CHAPTER- 2 LITERATURE REVIEW AND HYPOTHESIS
DEVELOPMENT
2.1 Introduction
This chapter is a detailed review of literature which is related or associated with the
subject of the effects of Balanced Scorecards on the Decision Making in the oil and gas industry.
Literature review is regarded as the text that is scholarly paper which involves the present
knowledge which includes substantive findings and theoretical and methodological contribution
towards specific subject. Literature review are based upon the investigation which is nearly every
academic field. It is based on previous studies, decision making processes, and the effect of BSC
on decision making. By having an improved focus on overall literature documents the experts
can attain diverse benefits. This section is one of the most significant part of the report has it
helps the researcher to assess the research outcomes of the report. Critical analysis was
conducted of all those studies and researches which are similar to the subject matter of this
report. Considering on the research questions and objectives of the report, sources which were
reviewed in this section are effect of Balanced Scorecard on Decision Making in the Oil & Gas
Industry. The particular is effective in reflecting the view points of several authors who are
carried out investigation on similar subject. This act as an aid for the researcher in conducting the
investigation in an effective manner. The gap among the investigation that have been carried out
in past and what the study will includes is determined so that research aim and objectives can be
met with effectiveness. It has been examined that review of literature assist in gathering immense
among the information that helps in carrying out the research in proper direction. In this section
various themes are developed on the basis of research and secondary information associated with
that has been collected in order to attain the objectives in an appropriate manner.
2.2 Previous Studies on Dependent Variable:
2.2.1 Decision Making
Decision Making is the Dependent Variable (DV). Decision is to achieve some result or
to solve some problem. The outcome of a process that is influenced by many forces (Gibson,
Ivancovich, Donnely & Konopaske, 2012). At organizational level, minor decisions that are
embraced today are capable of having disproportionately and unforeseen major consequences on
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an organization. That is why it is important to ensure that viable decisions are made in order to
avoid the organization in trouble in future. The decision is a choice which made to choose one
alternative among more available alternatives. (Certo, & Certo 2012) stated that; decision
making is the process of choosing the best alternative from more alternatives for reaching
objectives. If the decision taken randomly, it may affect negatively on the business.
2.2.2 The Decision Making Process
Making decisions using BSC is very important and beneficial for an organization. It is
therefore important to ensure that decision makers in the oil and gas industry makes wise
decisions regarding important issues that are prone to affect the company not only during the
present periods but also in future to increase productivity and profitability. There are processes
of decision processes (Lunenburg, 2010), Identifying the problem; Generating Alternatives;
Evaluating Alternatives; Choosing an alternative; Implementing the decision; and Evaluating
Decision Effectiveness. In Addition, the older population that has been working in a field for a
long period of time is best suited to make strategic decisions. However, in many fields this is
limited due to the average age of employees within a given sector (Hicks, Steele & Spencer,
2013). By having an appropriate decision making process the overall outcome might be
advanced in critical manner. It has been noticed that number of aspects need to be measured for
effective decision making process. If understanding aspects of key values is not appropriate then
it might be possible that effectiveness of decision making process might get affected.
2.2.3 Types of Decisions
There are various types of decisions that can be made in an organization and these
include the non-programmed and programmed decisions, strategic and routine decisions,
operational and tactical decisions, group and individual decisions, minor and major decisions,
and personal and organizational decisions. Decision can be segregated as programmed and Non-
Programmed Decisions Certo, & Certo (2012). It is important that decision makers go for best
decisions. Programmed and non programmed decisions: Programmed decisions are concerned with
the issues of repetitive nature or routine kind of matters. A standard type of procedure is
being complied with by lower level managers. Decisions of such kind might pertain to
make purchase of the raw material, granting leave to personnel as well as make supply of
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goods as well as make implementation to the personnel etc. In contrast to this non
programmed decisions relates to difficult situations regarding which there no easy
solutions. Such matters are considered very essential for the firm. For instance, opening
of the new branch of the business or larger number of personnel absenting from the firm
or making introduction of new product within the market are the decisions are being
make generally at higher level of management (Dunlap and et.al., 2016). Routine and strategic decisions: Routine decisions are relating with the general
functioning of the firm. They do not need greater evaluation as well as analysis can be
made in quick manner. Greater power is being delegated to the lower ranks for the sake
of taking these decisions in the broad policy structure of the business. On the other
strategic decision are considered important that influence the objectives, organizational
goals as well as other essential policy matters. Such decisions includes huge amount of
investments or funds. These are regarded as the non repetitive by nature as well as are
considered after careful analysis as well as evaluation of the various options. Such
decisions are taken at management's higher level (Lunenburg, 2010). Tactical and operational decisions: The decisions are being being pertaining towards
policy matters of the firm are considered as policy decisions. These are taken by the
higher management and have greater influence on the functions of the organizations. For
instance decisions in relation with location of plant, volume of production as well as
distribution channel policies are policy related decisions. In contrast to this operating
decisions are related with day to day functioning or the operations of firm. Such kind of
decisions are being taken by middle as well as lower level of managers. The decisions
that are associated with making payment of the bonus to the personnel are regarded as
policy decision. However in case the bonus is provided to the personnel, computation of
the bonus in relation to every personnel is regarded as operating decision (Chalmeta &
Palomero, 2011). Organizational and personal decisions: When the person tale decisions as an executive
within the official capacity it is referred as organizational decision. However in case the
decision which the executive take are in personal capacity are considered as personal
decision. In certain case such kind of decision can influence the functioning of the
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business. For example, in case manager leaves the firm then this can have impact on the
business. The authority regarding taking business decisions can be delegated. However
decisions that are taken on personal basis cannot be delegated (Chand, 2017). Major and minor decisions: This is referred to as another type of classification related
with decision that is major and minor. The decisions that pertains towards purchase of the
new premises for factory is considered as the major decision. These are being taken by
the top management. In contrast to this making purchase of the office inventory is
regarded as minor decision that can be taken by the superintendent of the office (Ester,
2013).
 Individual and group decisions: When a single person take the decision then it is referred
to as individual decision. Generally individual take the decision that are routine in nature
in the broad policy framework of the business. In contrast to this group decision are being
taken by the group of people which is constituted within the form of a standing
committee. Generally very important and pertinent matters for the organisation are
referred to this committee. The main aim in taking group decisions is the involvement of
maximum number of individuals in the process of decision making
(Chand, 2017).
2.3 Previous Studies on Independent Variable (IV)
In order to effectively manage as well as deploy various organizational resources to both
deliver and achieve organizational objectives or goals as was required by management and
finance professionals, different tools were evolved. Such tools, frameworks, and techniques were
evolved in order to help managers included among others total quality management, performance
prisms, values based management, and the BSC (Sun, Weihan, 2013). The Balanced Scorecard
was developed with an aim of enhancing the corporate performance of organizations. The BSC
was initially developed as a “performance measurement tool” but as of now, it is increasingly
associated or linked with the implementation of strategy. This is because it highly acts as a
framework of management that has the potential of both identifying and exploiting their major
value drivers of organizations to their own “best strategic advantages”(Kaplan and Norton,
2017). Managers and decision Makers use BSC for decision making (Wiersma, Eelke, 2009). It
has been ascertained that the using of traditional or conventional structures of BSC Scorecards
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for the national oil and gas companies across the world is rarely reasonable. The use of BSC by
management is very important because it is through it that translation of strategy into specific
measures and objectives which are effectively linked in a “causal chain” of lagging and leading
indicators that cover four major scorecard perspectives are achieved (Murby and Gould, 2005).
The oil and gas industry was faced with numbers numerous challenges which made
researchers to come up with a “significant amount” of literature regarding the issue of BSC. BSC
management tool is well positioned to support knowledge building efforts to help organizations
make their values and vision a reality. The BSC facilitates decision- making based upon values
and metrics that can be defined to support long-term benefits (Pineno, 2013).
This thesis considers some of the most recent and updated developments in the thinking
of scorecards especially in the major role of “strategy mapping”. It is important to note that the
BSC usually retains the traditional financial measures which tell the story regarding past events.
Unlike before when it was thought that investment in the long term customer relationships and
capabilities were not essential for the success of organizations; this is not the case in the
contemporary modern society. This is because despite the fact that the financial measures may be
inadequate, they are capable for both guiding and even evaluating journeys which companies,
those in the oil and gas industry included must made so as to develop future innovations,
technology, and processes.
2.3.1 Balanced Scorecards:
Balanced Scorecards is a performance measurement system that helps organizations or
companies to effectively translate their strategies and visions into action thus providing a
comprehensive and integrated overview of the organizational performance. The BSC’s greatest
strength for most businesses comes from its ability to integrate financial and non-financial
measures together by measuring both strategic and business performance across four interrelated
perspectives (Giannopoulos, 2013). BSC are essential part of a business enterprise because they
provide systems that are capable of measuring the current performance of organizations as well
as the “drivers” for an organization’s future performance.
The use of BSC models by decision makers is important because they help in the
enhancement of performance and have a significant effect on the decisions of organizations to
adopt (Malmi, 2001). This is very important because it not only helped in making the “cause and
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effect” relationships become transparent, but it also helps managers to avoid placing too much
attention on the enhancement of one specific measure at the expense of the other ones. This
process is a good method for the application of both financial and non-financial measures. This is
because it helps decision makers to communicate several and linked organizational goals. Such
goals must be reached in order to achieve the targeted long-term (Kaplan and Norton, 2007).
The key towards popularity of the scorecard lies within its flexibility as well as
adaptability. Whether for commercial organizations, governed by profits, public sector
operations governed by service delivery, or not-for-profit firms driven by commitment to a
particular cause, a scorecard that improves performance (either through performance
measurement, or via strategy refinement), can be developed. When it was initially developed the
scorecard was being positioned as holistic performance measurement framework, that can offer
useful information to the management in relation with the financial performance, internal
procedure, customer perceptions as well as internal learning and growth. As organizations
developed their own scorecards to measure performance, each generated valuable information,
relating to many aspects of organisational activity. Close analysis of this information, added to
organisational knowledge of operations and their impacts, made people aware of the potential of
the framework from a performance management perspective rather than one of performance
measurement. The underlying premise of the strategic scorecard is straightforward: that all the
actions determined by management decisions and implemented to promote strategy realization,
have an impact. To successfully contribute to achievement of an organization's mission, the
scorecard must effectively interpret strategy into operational terms. Strategy is thus
‘operationalised’ through the assumed relationships between actions and their impacts. By
measuring these impacts (via the scorecard’s identified key performance indicators),
management information – which informs decision-making – is created (Murby and Gould,
2005).
2.3.2 The Need for Balanced Scorecards:
Balanced scorecard is the strategic management tool which ensures incorporation of the
perspectives in the decision making process (Alshammari, M, 2011). BSC is important because
they help managers have a closer analysis of their business entities or organizations from four
major and important perspectives. These perspectives are financial perspectives, internal process
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perspectives, customer perspective, and the learning and growth perspectives. The use of the
BSC will improve managerial decision making by aligning performance measures with the goals
and strategies of the firm and the firm’s business units (Chavan, M, 2009).It is important to note
that the combination of customer, financial, organizational learning perspective, internal
processes, and BSC assists managers in many relationships. There is high need for having BSC
for decision makers because it helps them to in enhancing problem solving and decision making
in their organizations. BSC is a necessary tool in the design and the achievement of objectives -
the key to sustainable management and decision control. Management is able to make better
decisions when using the four perspectives of BSC (Chitu ,Alina and Opris, 2014).
Many organizations have implemented the BSC to support a wide range of strategic
organizational objectives. Some firms use the BSC as a strategic management tool to support
decision-making at the strategic management level (Martinsons, Maris, Davison & Dennis 1999),
to improve management of intellectual capital and to develop employee incentive system and to
manage. However, A majority of firms use the BSC to measure the overall (Awadallah, Emad
&Amir., 2015).
A balanced scorecard is needed by every organisation. The basic need for this is to
examine all the perceptive of organisation so, that they can take effective decision. The basic
need behind for using this is just that it is very helpful in all decision making process. It is
helpful to be determine that any financial measurement can not get scarped. Company have to
mention their on their scorecard so, it helps them in unique circumstances. It is also helpful in
establishing company and organisational strategy. They can be easily maintain their strategy
according by using that scorecard. So, that they can improve their performance at every level. It
is mainly helpful in implementing strategy. It is also helpful in making of objectives, measures,
targets. It should helpful in monitoring that how the strategy is get implemented. They are
helpful in achieving objectives because it shows that how much objectives are achieved and how
much are left (Huang, 2009). It is also maintain a balance between resources allocation and
utilisation. It promotes the financial performance of an organisation. And also helpful in
monitoring customers satisfaction.
All the four perspective are important for business and are inter related to each other.
Improvement in just one area is not necessary, it is compulsory in all fields. So, it is helpful in
18

taking all the decisions regarding in this area. It is helpful in motivated employees performance.
Also, it helps a manager to check all the progress of an organisation.
2.3.3 Types of Balanced Scorecards Perspectives:
The four major BSC perspectives are:
Financial Perspective: This effectively helps in identifying how a business entity wishes to be
regarded or viewed by its different stakeholders. Financial measures are actually the oldest and
most commonly used tools of measurement in management. Under this perspective decision
makers are required to generate measures that answer the following question: "To succeed
financially, how should we appear to our shareholders?" (Al-Najjar, Sabah & Kalaf, 2012). It
makes evaluation of the profitability of the strategy and takes into account cost reduction in
relation to the competitor's cost as well as growth in sales while the financial perspective lay
emphasis over how much the operating income is resulted from the minimization in the costs and
selling greater number of units of the product.
Customer Perspectives: This represents the association or relationship between customers and
an organization. This is because the core of “any business strategy” lies in its customers.
Decision Makers are required to generate measures to answer the following question: "To
achieve our vision, how should we appear to our customers?". It makes determination of the
target market segment. Further it also involves and measuring the company’s success in the
segment. It equally considers the number of new customers and customer satisfaction rating
(Ester, 2013).
Internal Processes Perspective: this mainly focuses or places major attention on internal
processes of an organization that will not only have a great effect on the satisfaction of
customers, but also on an organization’s financial objectives. Decision Makers are required to
provide measures that answer the following question: "To satisfy our customers and
shareholders, what business processes must we excel at?" (Al-Najjar, Sabah & Kalaf, 2012).
Through the use of financial statements, prevailing prices, industrial experts and financial
analysis, it focuses on internal operations that create value for customers. Using strategic
initiative, products, services and processes are created to meet customer needs. Based on this,
quality is an additional strategy at securing the attention of customers, improving service
delivery time by way of reduction in the time taken for goods or services to reach the customer
19

as scheduled. Moreover, the production process is reengineered to meet customer demands for
immediate and on the spot delivery or delivery by post. To enhance achievement of internal
processes that create value for the customers and shareholders, it is necessary to identify
organization capabilities that can enhance a successful reengineering process (Ester, 2013).
Learning and Growth Perspective: this emanates from 3 principle sources namely systems,
organizational procedures, and the people. Under this perspective decision makers must identify
measures to answer the following question: "To achieve our vision, how will we sustain our
ability to change and improve?"
Figure 2.1 Balanced Scorecards Perspectives
Source: Tech Target Website
2.3.4 The Effect of Balanced Scorecards on Decision Making
It has been ascertained that the measures in the BSC framework help managers and
decision makers to make better decisions that will lead the organization to succeed (Eric, Tanyi,
2011). BSC plays a vital role on decision making in the oil and gas industry because it helps
decision makers to have a tangible structure that can be used in guiding them during the measure
selection process. It also helps decision makers to be in a better position of identifying and
systematically considering the criteria that can be used as alternatives such as measures (Chand,
2017). Balanced Scorecards have a significant effect on the decision making process. BSC has
become the main tool of the corporate development strategy. More and more organization use
20

the BSC to design their strategy maps. The BSC has become a decision tool at the strategic
management level (Lee, Chao-Hsing & Chen 2014). BSC can help managers transcend
traditional notions about functional barriers and ultimately lead to improved decision making
and problem solving. The BSC keeps companies looking - and moving - forward instead of
backward (Al Sawalqa, Fawzi, Holloway & Alam, 2011). In Addition, BSC guides the managers
and employees to take actions and decisions that will enhance achievement of the company’s
strategy (Alao, Esther, 2013). Every firm should have to adopt this purpose form managing their
work efficiency. It is very effective way in every organisation. So, it helps an organisation check
out their own performance on weekly basis or in monthly basis. It is very effective method for
measuring all these. It represents both financial and operational measurement in a efficient
manner. It helps in taking decision related to financial resources and with operational level. By
using this technique, they can easily conclude on which area they have to work and on which
area they have to make better decisions (Bhushan and Rai, 2007).
So, it totally promotes decision making process. If, the financial resources are not
optimum utilise then, management have to take decision in this area. The balanced scorecard
includes all the financial measurement which tells about all the actions that have already taken
by them. It ensures them that those decisions are effective or not. As it gives a proper and
adequate information about all the aspects whether they are complex, negative, positive. So, for
making the scorecard balanced and effective, a manager have to adopt policies which make that
effective (Bhagwat and Sharma, 2007). So, by using this method a proper and efficient way of
decision can be taken out. Like, in a scorecard showing that company needs finance for carrying
out more activities so, it help them to take decision in this concern. It helps them to demonstrated
to meet their managerial needs. So, a balanced scorecard is helpful in decision making process.
Summary of some selected studies in BSC and DM
Table 2.1 Summary of some selected studies in BSC and DM
# Author / Date Country DV IV The main
finding
1
2
21

3
4
5
6
Figure 2.2 Independent and Dependent Variables
Table 2.2 Balanced Scorecard and Decision Making
BSC
Perspective
Corporate Goal KPI Decision Made
Financial
Perspective Step up exploration
activities.
Number and Cost of
Exploration
Activities.
Increase Oil & Gas
Exploration Activities.
Customer
Perspective Promote a positive and
strong image of the
company.
Expenses (USD) on
the Community
Development.
Increase the budget for
the Community
Development Program.
Internal
Processes
Perspective
Develop and implement
improved business and
operating processes
Number of Processes
developed
Develop policies,
procedures for each
department.
22

Learning and
Growth
Perspective
Improve manpower
productivity through
skills and competency
development
Training Cost (USD)
and Number of
employees trained.
Train additional
employees to replace
the retired ones
Figure 2.2 and table 2.2 shows the relationship between the BSC and decision making
2.3.5 Benefits of balance scorecard
 Better Strategic Planning - The Balanced Scorecard provides a powerful framework for
building and communicating strategy. The business model is visualized in a Strategy Map
which forces managers to think about cause-and-effect relationships. The process of
creating a Strategy Map ensures that consensus is reached over a set of interrelated
strategic objectives. It means that performance outcomes as well as key enablers or
drivers of future performance (such as the intangibles) are identified to create a complete
picture of the strategy (Campbell, Ganco, Franco and Agarwal, 2012).
 Improved Strategy Communication & Execution- The fact that the strategy with all its
interrelated objectives is mapped on one piece of paper allows companies to easily
communicate strategy internally and externally. We have known for a long time that a
picture is worth a thousand words. This 'plan on a page' facilities the understanding of the
strategy and helps to engage staff and external stakeholders in the delivery and review of
strategy. In the end it is impossible to execute a strategy that is not understood by
everybody (Willax P, 2007).
 Better Management Information- The Balanced Scorecard approach forces
organizations to design key performance indicators for their various strategic objectives.
This ensures that companies are measuring what actually matters. Research shows that
companies with a BSC approach tend to report higher quality management information
and gain increasing benefits from the way this information is used to guide management
and decision making (Bhagwat and Sharma, 2007).
 Improved Performance Reporting - Companies using a Balanced Scorecard approach
tend to produce better performance reports than organizations without such a structured
23

approach to performance management (The Balanced Scorecard- A complete
introduction, 2017). Increasing needs and requirements for transparency can be met if
companies create meaningful management reports and dashboards to communicate
performance both internally and externally(Bhushan and Rai, 2007).
 Better Strategic Alignment- Organizations with a Balanced Scorecard are able to better
align their organisation with the strategic objectives. In order to execute a plan well,
organizations need to ensure that all business and support units are working towards the
same goals. Cascading the Balanced Scorecard into those units will help to achieve that
and link strategy to operations (Fill, Busa & Puskás, 2015).
 Better Organizational Alignment- Well implemented Balanced Scorecards also help to
align organisational processes such as budgeting, risk management and analytics with the
strategic priorities. This will help to create a truly strategy focused organisation (Dunlap
and et.al., 2016)
2.3.6 Challenges of using The balance scorecard
To Employee: The balanced scorecard as a measure of performance challenges the
employee to marry his or her goal in line with organization objective and to execute his roles
such that attainment of objectives is enhanced. Failure in this wise may determine the job,
promotion and otherwise of the employee. This however may serve more as a motivation to
perform for the employee since he would rather prefer remaining employed than lose his job
(Lunenburg, 2010).
To Management: Taking advantage of strategic decision making and measuring
performance using the balanced score card requires a good top management. The task of setting
plans strategically by the organization is a crucial one that requires the management team
harmonizing their plans since it cuts across basic departments whose functions are involved in
attaining the goals of the organization. Equally, the use of the balanced score card is enhanced by
the strategic plans thus management cannot afford to treat business issues with levity. The
application of the balanced scorecard requires adequate communication procedures and means to
enhance interaction that affects the operational perspectives of the organization (Ester, 2013). To
overcome some of these challenges of implementing the balanced scorecard framework,
management has to put in place an enabling environment such as equipments, motor vehicle,
24

policies, line of communication, job conditions etc. for all concerned in the execution of the
goals of the activities of the organization. Each of these factors actually impact the employee
function and by implication affect the organization overall achievement. As suggested by the
motivation theorists such as Herzberg, employees need to be encouraged to perform, therefore
management should do its best in this wise to motivate its workforce in order to encourage
maximum performance (Chalmeta & Palomero, 2011).
A frequent error in scorecard adoption, is to pursue an organisation-wide exercise
involving strong executive leadership and wider involvement through workshops to build a
causal model of the business, and then stop the process. Once developed, adopted and fully
integrated into the organisation, the scorecard arguably facilitates improved performance at the
front-line. Furthermore, regular review of performance levels and performance metrics is vital
overtime. Evaluating results and testing the way people think about the business should be
regular. Over time an organisation will gain a deep understanding of its value drivers.
Consequently, both the value and nature of the selected performance measures need to be
reviewed frequently, at the very least through the planning and forecasting/budgeting process
(Ester, 2013)
2.4 Research Framework:
It is considered as one of the significant part of the research. It is essential as with the
help of this, one can reach to a specific conclusion. An approach is being employed as the study
involves formulation of hypothesis. Data collection will be carried out through both primary and
secondary sources. This analysis would be done through qualitative technique.
2.5 Hypothesis Development:
As per the above analysis, one can frame hypotheses so that data analysis can be carried
out in an effective way-
The main hypothesis is:
H: BSC has a positive effect on decision making.
The sub main hypothesises are:
H1a: The Financial perspective of BSC has a positive effect on decision making.
H1b: The Customer perspective of BSC has a positive effect on decision making.
25

H1c: The Internal Processes perspective of BSC has a positive effect on decision making.
H1d: The Learning & Growth perspective of BSC has a positive effect on decision making.
2.6 Summary:
Based on the above information, it is apparent that the issue of BSC started in the 1990’s
and that it has been undergoing tremendous changes to what it is today. It is apparent that any
organization which exists in the contemporary society cannot underestimate the importance
associated with the implementation of BSC in ensuring organizational success. Based on this
chapter, it can also be truly asserted that decision making is a critical process in any
organizational because it affects how the organization will be in present and in its future form. It
is therefore important that decision makers in the oil and gas industry embrace the best BSC that
will help them achieve their set objectives. It is an obvious fact that BSC plays a vital role in
ensuring organizational success and therefore it is important for all decision makers and relevant
people to ensure that they embrace the best tools that can be used in decision making processes.
BSC plays a vital role on decision making in the oil and gas industry because it helps
decision makers to have a tangible structure that can be used in guiding them during the measure
selection process. Every firm should have to adopt this purpose form managing their work
efficiency. It is very effective way in every organisation. So, it helps an organisation check out
their own performance on weekly basis or in monthly basis. Balanced Scorecard provides a
powerful framework for building and communicating strategy. The business model is visualized
in a Strategy Map which forces managers to think about cause-and-effect relationships. It can be
assessed from the particular section that decision makers within oil and gas industry needs to
make fair decisions with respect to issues that can influence the organization not in the present
but in future course of time. It has been assessed that there are several kind of decisions which
are being developed within the firm. Such is comprised of programmed and non programmed,
operational and tactical, personal and organizational decisions, minor and major as well as group
and individual decisions. On the based of research it has been determined that Balance Scorecard
is regarded as tool of management which is managed at supporting the knowledge for assisting
the business in developing their values and vision of reality. The usage of the model assist the
decision makers in enhancing the performance and has influence on the decisions of the firm.
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27

CHAPTER- 3 RESEARCH METHODOLOGY
3.1 Introduction
The concept of research methodology can be utilized for the sake of gathering the data in
order to make decisions related with the business. The methodology involves publication
research, interviews, surveys and other tools of investigation. In other words it is considered as
systematic plan that assist in carrying out the research. Along with this research methodology is
designed as a philosophical framework upon which the research study is based and provides the
parameters for conducting the research, such as a science-based and/or publicly informed
decision-making process. In the present section the tools of research are being discussed. Further
the appropriate tool for the investigation are applied so that research aim and objectives can be
attained an effective manner. Research methodology is employed for the sake of carrying out the
investigation in particular direction. Here theoretical analysis of the tools that are being applied
to the field of investigation is done. The section includes the theoretical assessment of the body
of methods as well as principles attached with the branch of knowledge. Justification to selection
of specific tool has also been provided in the present section.
3.2 Research Design
The research framework helps in identifying and analyzing different aspects of the study
which allows the research issues to be effectively defined and designed. It develops a detailed
framework of analyzing the research problems and considerable solutions for the same.
In order to accomplish the gathering and analysis of research results, it is demanded that
the researcher develop an appropriate path to successfully to attain the end results for the study.
It will help in developing a well-defined base for undertaking the research and developing a clear
idea about tools and techniques adopted for the analysis.
Research design helps in developing a clear aspect of defining research problems and
measures to attain results for the study. It will help in effectively defining the tools and
techniques which must be adopted to undertake the research and attain valid results for the topic.
It is defined as different styles applied in the study to effectively attain the research objective.
Different designs to effectively attain the aim of the study.
The present study will adopt a descriptive research method for attaining the aim. A
descriptive study focuses on analyzing the research issue and will carry out a detailed analysis on
28

the subject mentioned. It focuses on collective data about the mentioned topic and evaluate the
same as per the research problems.
Some methods are the most common types of researches adopted for the analysis.
Qualitative methods are adopted for the social researches, which demand effective involvement
of human perspective for attaining the well-defined results for the study. This research type helps
in developing a detailed analysis of different methods and tools which provides an interpretative
overview of research problems. Qualitative methods are based on words, perceptions, feelings
etc. rather than numbers and include experiments, interviews, focus groups, and questionnaires
with open-ended questions. This method is effective for attaining the general perception about
the research problems and issues. It has been stated to be an effective means of attaining results
from different point of view. Quantitative methods, on the other hand, are rigid research types
which attain accurate and reliable results by applying scientific or mathematical measures to
attain the results. This method measures the level of occurrences on the basis of numbers and
calculations. It is a research type which reflects the results in the form of numerical data and
results. For conducting this research type, different methods such as correlation and regression
analysis questionnaires, SPSS methods etc. are applied in the study.
The purpose of this research study is the analysis of the effectiveness of BSC methods in
the decision-making aspect of the business. For attaining the stated aim, the qualitative method
will be applied in the study. This method will help in developing a detailed and well-defined
analysis of the research data for the current study. In addition to this, the data for the study will
be collected from employees of Oil and Gas industry. Thus, the qualitative method will be
effective for interpreting the results and data attained by the employees of the company. This is
important in the determination of sustainability practices, commonly decided through decision-
making processes (Abdalla, Yousif & Siti-Nabiha (2015).
3.3 Population and Sampling
The analysis of the population is significant for understanding the overall research results
and effectively collecting the data for further analysis. The study is conducted in an Oil & Gas
company. The total number of employees working in the main office is about 300 employees. A
survey instrument is self- administered questionnaire was adopted in this study.
29

The endeavour is to understand the effect of BSC on decision making in the Oil & Gas
Industry. The data was collected through questionnaires (Appendix A). Ninety questionnaires
were distributed, but only 52 are valid for analysis.
3.4 Instrumentation
Research analysis and data collection plays a significant and well-defined role in
attaining the research results for the study. Research instruments involves surveys, questionnaire,
check list, flowcharts, etc. This allows for the development of an effective and detailed analysis
for the results and evaluation methods. Research instruments help in analyzing the research
evaluation aspects and also in attaining valid results for the study.
To design the questionnaire, there are three methods developed, adopted and adapted. In
this study, questionnaires have been adapted from previous studies (Wiersma, Eelke, 2009; Alao,
Esther, 2013; Eric, Tanyi, 2011; Giannopoulos, George; Sun, Weihan, 2013; Alshammari,
Abdulsattar, 2011).
In this study, the survey method was used by asking respondents closed-ended questions
included in a questionnaire. The questionnaire is written in English language only because all
employees in the oil & gas companies can speak, read and write English, so that the employees
can easily understand the language of the questionnaire.
Table 3.1 Principal Sections of the Study’s Questionnaire – Questionnaire Design
Section Content
A Demographic
(General) data
B Balanced
Scorecards
C Decision Making
The questionnaire consists of three sections shown in table 3.1. Section B and C of the
questionnaire measures the respondent’s subjective or perceptual level of agreement or
disagreement with each item comprising the balanced scorecards and decision making. The first
section is dedicated for asking about the respondent demographic data such as gender, age,
qualifications, position, experience and department. Section B is dedicated to the independent
30

variable which is balanced scorecards and its perspectives ( the financial perspective, customer
perspective, internal processes perspective and Learning and growth perspective). Section C is
dedicated to the dependent variable. Questionnaires were formed by using 5 points scale for
section B & C ( 1 for strongly disagree, 2 disagree, 3 neutral, 4 agree and 5 for strongly agree).
The full set of questionnaire can be seen in Appendix “A”.
Before distributing the questionnaire to the employees, they were first distributed to four
professional experts to be judged. After the judgement completed, the questionnaires were
amended and then came up with a final questionnaire. Ninety questionnaires were distributed to
employees, but only 52 are valid for analysis.
The study will attain the sample from an Oil and Gas company. The random sampling
method will be used to select subjects from managerial and supervisory positions in order to
attain clear and well defined results.
The study will attain subject-based instruments for attaining accurate and reliable
information for the study. The secondary research will be conducted through in-depth analysis
and snowball sampling approach. However, for the primary research analysis, the survey method
will be adopted. The survey will be conducted with the top employees of an Oil and Gas
Company. This will help in developing effective data for the stated aspect. The questionnaire
instrument will be used for the study in the given case, which will help in developing a well-
defined aspect for the study. This will develop a well-defined means of attaining the detailed
plan for the present analysis and attain effective results for the study as well. It can be evaluated
that the analysis on the present topic will be undertaken in a good manner to attain significant
results for the analysis. Observation forms and time and motion logs will be another crucial
aspect of developing detailed and well-defined plans for research analysis and evaluation for the
study.
3.5 Data Collection
Data collection is treated as one of the significant parts of research. Data for the given
study can be collected through primary or secondary sources. These sources are effectively used
in order to meet the objectives of the study. Secondary research for the study will help the
researcher in developing a clear as well as detailed base for the study. This will also create
detailed analysis of the past results. Primary data are those data which are collected directly from
31

respondents and they are usually collected through means of questionnaires. These data are also
known as an initial information and are relatively fresh. Secondary data are those data which has
been collected by the researcher from existing sources through different books, journals, online
sources, magazines, newspapers, articles, etc. In the present study, data was collected from both
primary as well as secondary sources so that effective results can be gained. Research conducted
by Ratnayake (2012) suggests that technical integrity can be maintained through effective
decision making. In relation to it, sound information base will be developed and with this
appropriate results will be attained. Primary and secondary data will give the researcher the basis
to develop the effective outcome and also to fulfill the aim of the present study. Questionnaires
(Appendix A) where distributed to 90 employees heading managers, Team Leaders, Supervisors,
Engineers and Senior Analysts in different departments. Out of the 90 questionnaires that were
distributed only 52 employees returned well clear papers.
3.6 Scale Reliability
Research usually requires high amount of information and this needs to be collected
effectively so that best of the results can be derived in a cost-effective manner. This helps for
deriving the valid data from mass of individuals who are selected for data analysis. Validity and
reliability is the two most important constituent of any research study for delivering effective
findings and conclusions of the study. In the current research study, researcher has focus on both
these aspects. In deliberation to the validity of the information detail in the report, initially
precise amount of reviews accessed in the literature review section and it also helps to underpin
the topic in more elaborate way.
Data is also undertaken need to be from valid grounds and should not state any sort of
false statements. For collecting the data, interest of management are also taken into consideration
as their prior approval is taken before involving them in the case study. Safety of data which is
collected from respondents is very important and it needs to be kept confidential in order to
achieve the aim of the present study. The work has been completed as per the academic
guidelines only and no breach of the same is made. The data collected from management is not
for personal use and has been only used for fulfilling the needs and requirements of the report.
The secondary data were also collected from valid, as well as reliable sources, so that best of the
information can be gained in order to make report effective.
32

3.7 Data analysis
Once the data were collected, the information was coded and appropriate data analytical
techniques was applied. As the purpose of this study is to find out the effect of BSC on Decision
Making, it is necessary to choose the most suitable methods of data analysis to ensure that the
data is treated thoroughly and the conclusions drawn can be understood. The data analysis
consisted of examining the surveys for correctness and completeness. The data was analyzed
using IBM Statistical Package for Social Science (SPSS). The analysis of data began with the
dependent variable (DM) for ten items and then for the independent variable (BSC) for twenty
items. Frequency analysis were conducted concerning the demographic information collected
from the respondents such as gender, age, qualifications, position, experience and department.
Further analysis was done such as Correlation, Regression, ANOVA and Coefficients.
The research methodology assists in developing a clear and effective understanding
regarding the data collected from the sample of the study, which results in knowledge
management, useful in the understanding opportunities and challenges (Ramanigopal, 2013). It is
very significant part of the research as it helps in understanding the overall analysis of research
by adopting different tools and techniques. Qualitative research involves theoretical description
of the data for the purpose of achieving desired results. Mathematical expression and statistical
tools are applied in quantitative data analysis techniques commonly used for the implementation
of feedback within the oil and gas industry. Such analysis helps in carrying out positive
outcomes and identify the effect of BSC that helps management to make effective decision-
making within oil and gas industry. It is theorized that decision-making leads to operational
excellence, which increases the reputation of the company and industry (Bertocco, Riccardo &
McCreery, 2014).
3.8 Research approach
It implies for the manner in which issue will be resolved by the scholar. Hence, all the
techniques including data collection and analysis is highly influenced from the type of
investigation undertaken. Hence, there are mainly three kinds of philosophies that can be
undertaken by the researcher in accordance with the type or nature of investigation. Such
approaches include inductive, deductive and abduction. Selection of approaches is highly
influenced from the type of study. Inductive approach of research highly suits to the qualitative
33

investigation where known premises are used by the scholar to generate untested conclusion
(Flick, 2015). On the basis of this aspect, researcher presents solution of issue by making
analysis of specific pattern or observation. In this, generalization moves from specific to general
aspects due to the nature of investigation. Under such approach, data is used to derive suitable
solution by exploring the specific phenomenon. Hence, researcher places high level of emphasis
on the creation of conceptual framework by identifying the specific pattern or themes. Thus,
inductive approach of research helps in building or generating new theory on the basis of
qualitative data analyzed.
On the other side, inductive approach is used by the researcher to evaluate quantitative
facts and figures. In this, researcher places more emphasis on testing the hypothesis by taking
into consideration the existing theoretical framework or aspects which are related to the issue. In
this, data is gathered by the scholar to evaluate propositions or hypothesis which is highly
associated with the theory already existing. Hence, inductive approach places more emphasis on
the verification of theory (Mackey and Gass, 2015). In contrast to this, researcher undertakes
abduction approach when mixed investigation is undertaken. Hence, by considering this, it can
be stated that generalization is between the specific and general aspects. Such approach includes
theory medications, verification and building. Thus, researcher needs to keep in mind the type of
investigation at the time of making selection of approach.
In the present investigation, to analyze the effect of balance scorecard on decision making
in the context of oil and gas industry deductive approach of research has been selected by the
scholar. By considering this, hypothesis has been developed by the scholar in relation to balance
scorecard and its impact on decision making has been identified. Such approach best fits to the
present study because quantitative investigation has been selected by the researcher.
3.9 Research philosophy
In research, philosophy provides deeper insight to the researcher about the manner in
which they need to gather or analyze data. Hence, philosophies of the research can be divided
into three parts such as positivism, interpretivism and pragmatism. All these philosophies also
highly vary in accordance with the type of study conducted. Moreover, positivism philosophy is
undertaken when researcher conducts quantitative investigation. Hence, deductive approach and
positivism philosophy are highly associated with each other (Dunlap and et.al., 2016). In this,
34

ontology is objective and researcher places high level of emphasis on assessing solution from the
given or realistic numeric facts. Such philosophy offers value free solution to the researcher and
thereby helps in presenting suitable values.
On the other side, interpretivism philosophy helps in identifying suitable solution when
qualitative investigation is undertaken. Along with this, in the case of interpretivism philosophy
research approach must be inductive. Unlike positivism, in interpretivism philosophy ontology is
subjective in nature (Silverman, 2016). However, outcome which is generated by the researcher
on the basis of such philosophy is biased to some extent. Moreover, in this, researcher makes
analysis of qualitative facts on the basis of existing theories and own knowledge.
By taking into account the type of investigation and research approach positivism
philosophy has been selected by the scholar. Moreover, in the present investigation, researcher
has selected quantitative research type. Hence, according to such type and deductive approach
positivism philosophy has been selected by the researcher to assess the of balance scorecard in
the decision making aspect of oil and gas companies. In this, unbiased solution of the problem
has been presented by the scholar by making in-depth evaluation of qualitative aspects.
3.10 Research type
Qualitative and quantitative are the main two types of research that can be conducted by
the scholar to evaluate the issue or problem going to be investigated. It is prior aspect of
research methodology which in turn provides assistance to the researcher in making selection of
data collection and analysis technique. Further, approach or philosophy of the research also
highly affected from the type of study selected. Thus, researcher needs to undertake proper care
while making selection of research type. Hence, qualitative investigation may be defined as one
which in turn helps in understanding the problem by exploring each and every aspect. It is highly
significant and assists in developing suitable hypothesis for further research by providing
information about the underlying reasons, opinions and motivations (What is the Difference
between Qualitative Research and Quantitative Research, 2017). Qualitative study helps
researcher in covering the unanalyzed trends. It lays emphasis on the collection of data through
the means unstructured and semi structured techniques. Thus, focus group, observation and
interview are the most techniques which are undertaken by researcher in the case of qualitative
investigation. Such kind of investigation offers suitable solution only when sample size is small.
35

On the other side, quantitative investigation is highly concerned with the analysis of
numeric facts and figures. Hence, it helps in generalize suitable results when study is conducted
on large sample size. By this, researcher can determine suitable solution from the defined
variables in an effectual way. Under such kind of investigation, researcher undertakes high
structured technique for the collection of data such as survey etc. Hence, from these two types
researcher can select suitable research type in accordance with the nature of issue.
Hence, with the motive to present highly suitable and realistic solution researcher has
selected quantitative research design. In accordance with such aspect, researcher has gathered
data regarding the use of balance scorecard technique by undertaking survey technique. Hence,
by using such technique researcher has evaluated each and every aspect in-depth.
3.11 Ethical consideration
This is considered as the most significant aspect by the investigator while the research is
being conducted. Through ethical norms the research can be completed in an effective manner.
When conducting the present dissertation the Effect of Balanced Scorecards on Decision Making
ethical norms that are being taken into account are as follows: Prior approval: The respondents that are attached with the investigation might not accept
towards participating within the research. The principle related with voluntary
participation demonstrates that participants need not to be forced in becoming the
participant of the research. In this regard the investigator is required to take approval in
advance from the respondents (Seringhaus, 2005). It has been taken care that none of the
participant is being forced to take part within the research. The purpose due to which the
investigation is being conducted was made understood to them. This is due to the reason
that such might to create hurdle while conducting the research. Restricted access: In the present thesis secondary data has been gathered from the past
studies that are being carried out on the particular subject matter. The presence of such
studies was over several sites (Kumar, 2002). Further the access to some sites was
restricted. In this regard permission was being taken by analyst in advance for the sake of
getting access to specific sites.
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 Proper citation of the work: Within the present dissertation the work of several authors is
being taken into account. Through citation of the work in an effective manner proper
citation of the work taken from several studies have been made sure.
 Confidentiality: The investigator makes sure that data that is collected by the investigator
is not be shared with any one else who is not the part of the investigation. The principle
related with anonymity demonstrates that investigator has made sure that respondents
have remained to be anonymous in the entire investigation.
3.12 Research limitation
The process in relation with attainment of the investment is regarded to be challenging
one and thus the investor is facing several kind of problems. In the present thesis the
investigation possess certain limitation that are enumerated in the manner as under: Prolonged procedure: Lengthy procedure has been complied with in order to accomplish
the entire investigation. Greater amount of time is being consumed in collection of the
information by means of books as well as Journals (Welman, Mitchell and Huysamen,
2005). As the entire investigation is required to be accomplished within particular
duration of time thus every aspect is required to be covered by the investigator in the
research. Inadequacy of the secondary information: In the present investigation secondary data is
needed. Such is because of the reason that it assist the investigator in attaining effective
knowledge regarding the subject under investigation. This possess major limitation in
terms that data was not attained in an appropriate way (Scarpa and Azzalini, 2012). Such
is due to the constraints in relation with the use of several sites. Thus there is presence of
greater chances that specific data is missed out when conducting the research. Absence of depthness in the responses attained by means of questionnaire reflecting
lower validity: This is considered as one of the main limitation of the present thesis. AS
the questionnaire is comprised of close ended questions thus employees are bound
towards answering within the option set that is being offered to them. This demonstrates
lower validity as there is lack of depthness in the responses used for the research.
 Problem in gaining understanding of the questions that are complex: For the purpose of
collecting the data regarding the opinions of the personnel with respect to balance score
37

card use in decision making tool of survey is employed. With respect to such
questionnaire is devised. In the preset dissertation on the Effect of Balanced Scorecards
on Decision Making structured questionnaire has been developed. This includes close
ended questions (Scruggs and Masotropieri, 2006). The major drawback in relation with
such is that in certain cases the participants are unable to attain better knowledge
regarding the complex questions which are included in the questionnaire. Because of
such some important aspect in the research gets missed out. To some extent the present
thesis is influenced as participants were unable to develop better understanding of the
questions that were complex in nature.
3.13 Summary
The use of the quantitative data analysis is beneficial in the aim of this study, which
involves the identification of the effect of the BSC that lead to effective decision-making within
the oil and gas industry. Through the use of quantitative data, it will be possible to develop in-
depth data results, which can then be compared to existing literature and used to provide answers
to the research issue. This study focuses on the use of primary source in order to collect the
relevant data. The data analysis, as a result, will be comprehensive through results attained by
respondents, as well as through other academic sources. In order to analyze the effect of balance
scorecard on decision making in the context of oil and gas industry deductive approach of
research has been selected by the scholar. By taking into account the type of investigation and
research approach positivism philosophy has been selected by the scholar. Moreover, in the
present investigation, researcher has selected quantitative research type. Motive to present highly
suitable and realistic solution researcher has selected quantitative research design. In accordance
with such aspect, researcher has gathered data regarding the use of balance scorecard technique
by undertaking survey technique. It can be summarized that the research design which is being
employed in the section above is descriptive. This is because of the reason that it is effective in
attainment of the aim. Further lay emphasis on analysis of the issues related with investigation
and thus detailed analysis is conducted on the subject. In the present thesis in order to analyze the
effectiveness of the Balance scorecard methods within the aspect of decision making for the firm
application of the qualitative method has been done. Thus well defined analysis of the
information can be conducted. Method of survey has been used in the present investigation. This
38

has been examined that through use of suitable methodology research methodology can be
conducted with effectiveness. The sampling is carried out on random basis. As through such
every person can be given chance towards becoming part of the investigation in an effective
manner.
4.1 Introduction:
Analysis of data is considered as the most critical part of the whole investigation. Further
the report includes the analysis and interpretation of the information. This leads to development
of part in which several tools are employed over the data in order to carry out analysis over the
resources available. Based upon such the outcomes are gained wherein attempt is being made
towards covering several aims and objectives of whole investigation. In the present report
analysis of the data has been carried out by the means of SPSS in which regression is being
performed. Based on the analysis several interpretation is developed that assist in
accomplishment of the pre-determined set of target and attain the conclusion. Balanced
Scorecard is the one of the most important method that is used by the managers to make different
types of decisions. There are four components of BSC which help managers in making business
decisions. Current thesis is focused on the effect that BSC method have on the decision making.
In this regard descriptive statistics is applied on the given data. Further, regression and
correlation analysis are also applied on data set in order to derive useful conclusions. By the
application of the tools the outcomes can be attained in effective manner that has huge influence
on the performance of the investigation to a greater extent. This assist in drawing valid
conclusion from the investigation.
4.7 Summary:
It is concluded that there is significant mean difference among independent variable which are
components of the BSC. It can be said that the degree of impact of all components is different
from each other. It is observed as value of Durbin Watson test is revealing that there is no
autocorrelation among the variables on which study is undertaken. It has been gained from the
present thesis that balance scorecard is being carefully utilized by the managers as it to a greater
39

extent affects the decision making. It can be summarized that standard deviation is low and all
the variables possess either average FP or any other variable. From the analysis it has been
examined that FP that is part of balance scorecard heavily influence decision making of the
organization. In addition to this it has been summarized that CP influence the decision making of
the organization over the balance scorecard. Such customers are the one from whom the
company is earning greater amount of revenue. It can be concluded that IP being the part of the
balance scorecard influence the decision making of the organization to a greater extent. It has
assessed that variable that is LG is regarded when making decisions by the firm.
5.1 Introduction:
The aim objective of the thesis is the effect of BSC on decision making. Questionnaires were
distributed to all targeted people. Regression and Correlation analysis have been conducted. It
was found that the BSC has positive effect on decision making. The particular section is the last
part of thesis which presents a summary of whole the thesis or research study investigated by the
scholar. It is very important to take proper precautions while summarizing the entire reports
because appropriate solution as well as recommendation for the resolving the chosen issue is
totally depends upon the right conclusion. In the present report, this chapter will present the
overall findings and analysis of the researcher conducted in order to analyse the effect of
balance score card (BSC) on the managerial decisions in the oil & gas industry. Along with this,
on the basis of the evaluation or findings, organizations will be recommended with the best and
unique advices to make smarter decisions for bringing growth and success. Lastly, the section
will also introduce the area of future research in the current field that can be conducted by other
scholars in the forthcoming period.
5.3 Recommendations:
It is recommended for all oil & gas companies as well as other employees to implement
the Balanced Scorecards tool in all their departments. The companies are being suggested that
they need to construct their own BSC to track their financial as well as non-financial progress.
Every commercial establishment targeted at getting maximum return on their turnover, therefore,
40

in this respect, managers & executives must analyze and evaluate the financial perspective to
find out their corporate performance, profitability, cost management strategies & others. Also, it
is recommended to purchase the BSC software in order to easily facilitate the implementation of
this tool. Firms can be recommended to make excellent & smarter decisions to control their
expenditures, promote saving, expand their stream of revenue, which in turn, will deliver
maximum return to the business. It is being recommended to the firm that in order to increase
internal efficiency through proper and effective corporate functionality, better routine
arrangement, and inventory management, optimum utilization of resources, quality control
mechanism, sustainable environmental initiatives and waste management as well. This is being
recommended the BSC helps in the process of decision making thus implementation of such can
assist the organization in making suitable decisions for attainment of the targets in an effective
manner.
5.4Future Research:
Since this study focuses on the effect of Balanced Scorecards on Decision Making, it is
suggested to replicate this study in other sections such as banking, private industries, logistics,
etc., use other measurements, such as secondary data and do a study of the effect of BSC on
Performance. In future, there are various fields in which researchers can conduct investigation
such as evaluating the practical use of BSC in other industries. Moreover, scholar can investigate
the critical implication of BSC system and how it is managed by the companies in the real
complex corporate world. Apart from this, scholars can also analyze the comparative
effectiveness of all the four perspectives of BSC to bring competitive advantage in the market.
By conducting investigation in all these fields, investigator can develop an in-depth
understanding towards the topic and suggest unique and innovative ideas, advices and
suggestions to meet their defined targets. Apart from this, scholar can investigate the problems
and difficulties which business may face in their BSC creation and management, so that;
appropriate strategies and decisions can be made for the performance enhancement.
41

REFERENCES
Journals and Books
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process. Springer Science & Business Media.
Dunlap, G. and et.al., 2016. Contributions of Single Case Research Methodology to Early
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Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research
project. Sage.
Huang, H.C., 2009. Designing a knowledge-based system for strategic planning: A balanced
scorecard perspective. Expert Systems with Applications. 36(1). pp.209-218.
Kumar, A., 2002. Research Methodology in Social Science. Sarup & Sons.
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Scarpa, B. and Azzalini, A., 2012. Data Analysis and Data Mining: An Introduction. Oxford
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Seringhaus, F. R., 2005. Selling luxury brands online. Journal of Internet Commerce. 4(1). pp.1-
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Silverman, D. ed., 2016. Qualitative research. Sage.
Welman, C., Mitchell, B. and Huysamen, G., 2005. Research methodology. Oxford University
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