Evaluation of Balanced Scorecard System and Its Implementation

This report evaluates the impact of the Balanced Scorecard (BSC) system on organizations, including both large companies and small and medium enterprises (SMEs). The study aims to assess the benefits of BSC implementation, considering its strategic focus and ability to measure performance across various perspectives. The research employs an inductive approach with an interpretivism philosophy, utilizing qualitative techniques such as thematic analysis. The findings highlight the advantages of BSC in focusing on key activities and its applicability regardless of company size. The report includes an introduction outlining the aims, objectives, and structure, followed by a literature review exploring BSC limitations and impacts. The methodology section details the research design, approach, sample, and data analysis methods. The report also includes findings, discussion, recommendations, and conclusions regarding the implementation and effectiveness of the BSC system in enhancing organizational performance and achieving strategic goals.

Evaluation of Balanced Scorecard
System and its implementation in
organisations

Abstract:
Aims
“To evaluate the impacts of using Balanced Scorecard (BSC) system in
the organisations and the implementation of BSC by the organisations including large companies
and small and medium enterprises (SME)”.
respondent there are many benefits of implementing the balance scorecards for their companies.
Balance scorecards which is designed for SME is included similar process with the steps which
are needed for the large organisation. Size is not the factor which decide that company should
adopted the balance scorecards or not. It benefits company through focusing on activities which
are really important for them.
In this study focus of researcher will be on moving from specific information to general.
Therefore inductive approach will be undertaken in this research. Interpretivism philosophy is
used. Qualitative technquie will be undertaken under which thematic analysis will be done for
presenting the findings
Findings
Respondent there are many benefits of implementing the balance scorecards for their
companies. Balance scorecards which is designed for SME is included similar process with the
steps which are needed for the large organisation. Size is not the factor which decide that
company should adopted the balance scorecards or not. It benefits company through focusing on
activities which are really important for them.

Contents
Table of Contents
CHAPTER 1: INTRODUCTION....................................................................................................1
1.1 Overview...............................................................................................................................1
1.4 Focus and Purpose.................................................................................................................1
1.5 Aims and objectives..............................................................................................................2
1.6 Research question..................................................................................................................3
1.3 Chapter structure...................................................................................................................3
1.7 Framework and analysis........................................................................................................4
1.8 Potential Significance............................................................................................................5
CHAPTER 2: LITERATURE REVIEW.........................................................................................6
2.1 Introduction...........................................................................................................................6
2.2 Limitations of Balanced Scorecard that the organisations would face in the application ...8
2.3 The positive and negative impact of implementation of Balanced Scorecard in SMEs and
large companies .......................................................................................................................10
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................12
3.1 Introduction.........................................................................................................................12
3.2 Research design: ................................................................................................................12
3.3 Research approach:.............................................................................................................12
3.4 Sample:................................................................................................................................14
3.5 Data analysis............................................................................................................................14
4.1 Introduction.........................................................................................................................17
CHAPTER 5: DISCUSSION OF FINDINGS ..............................................................................40
5.1 Introduction.........................................................................................................................40
5.2 Discussion based on the findings of Small business enterprises in relation to literature
review........................................................................................................................................40
5.3 Discussion based on the findings of Large companies in relation to literature review.......41
CHAPTER 6: RECOMMENDATION AND CONCLUSION.....................................................43

6.1 Conclusion..........................................................................................................................43
6.2 Recommendations...............................................................................................................44
References......................................................................................................................................46

CHAPTER 1: INTRODUCTION
1.1 Overview
The balance scorecards is known as the management system as it is a way of looking an
organisation which focuses on strategic goals. Generally it is used for communicating whatever
they are trying to accomplish. Measuring and monitoring the progress toward the strategic
targets. In short balance scorecards enable the companies to set, track and accomplish its key
business strategies and objectives (Pollack and Ufimtseva, 2016). The management system view
the organisation from four different perspective and develop objectives. Financial measure is
important as it is relied by many companies for monitoring their performance. The main reason
for measuring the financial performance is that measure the performance of the company in the
past and predict how it can perform in the future. For measuring the effectiveness of the
company it is important measure return on capital employed which is mostly important for the
slow moving companies. However, there are some limitation for the such measures. It can help
in measuring the one aspect of the company and there is no link between its result and
performance. Therefore, through introducing the Balance scorecard system it becomes easy for
the firm to measure all the area of business as compare to other method such as financial
measure which focus on only single aspects.
The present dissertation is based on evaluating the impacts of using Balanced Scorecard
(BSC) system in the organisations and the implementation of BSC by the organisations including
large companies and small and medium enterprises. Therefore, it is important to understand the
importance of BSC and the way it can be implemented within the organisation. This will help
company in identifying the weak area where improvement is required.
1.4 Focus and Purpose
The present dissertation is based on evaluating the impacts of using Balanced Scorecard
(BSC) system in the organisations and the implementation of BSC by the organisations including
large companies and small and medium enterprises. Therefore, the main purpose of this research
to analyse the impact of BSC on the organisation and the way it assists in accomplishing the goal
and objective of the firm. Balance scorecards is one of the effective tool which is used for
measuring the performance of the companies in order to accomplish the goals and objectivities.
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A BSC is a structure way in order to test the hypotheses and interrelationships between action
and results, It is just not a tool for strategic formulation but it is description and interpretation of
the strategy which help in finding the link between action and their impacts. It helps manager of
the firm to focus on different that is internal business process, learning and growth. Financial and
customers. BSC is one of the effective tool and it is more than a collection of the financial and
non financial tools. It is used for communicating purpose, prioritising the product, services and
projects etc. There are many literature who suggested that use of BSC is not effective as much
for accomplishing the success and they think it has some limitation.
Therefore, the purpose of this study is to research the use of the balance scorecards and
analyse the way BSC lead to improve the strategic and performance within the organisation. This
investigation will help in developing a deep understanding related to the topic and provide
information related to defectiveness of implementing this strategy for accomplishing the strategic
goal
1.5 Aims and objectives
Aims
The broad aim is “To evaluate the impacts of using Balanced Scorecard (BSC) system in
the organisations and the implementation of BSC by the organisations including large companies
and small and medium enterprises (SME)”.
Objectives
The objectives of the study are as follows:
 To understand the importance of Balanced Scorecard (BSC) system.
 To identify any limitations of Balanced Scorecard that the organisations would face in
the application
 To evaluate the positive and negative impact of implementation of Balanced Scorecard
in SMEs and large companies
 To provide conclusion and recommendations on how organisations can be improved by
Balanced Scorecard.
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1.6 Research question
 What is the importance of development of Balanced Scorecard
 What are the limitations of Balanced Scorecard that the organisations would face in the
application
 What are the way of implementation of Balanced Scorecard in SMEs and large
companies.
1.3 Chapter structure
Scholar need to follow the sequential pattern at the time of undertaking the research
topic. This dissertation will be structure by following the series of chapter which can be
undertaken as the part of research. Chapters are as follows Chapter 1: Introduction – The chapter first provide detailed information related to the
selected topic. As it will consist of an overview which provide detailed information
related to the aim of the dissertation. The impact of using Balanced Scorecard (BSC)
system in the organisations will be explained in detail. Following these aims and
objectives and purpose of the research will be covered. At last of the introduction chapter
different research tools and techniques will be discussed with the importance of the
selected topic. Chapter 2: Literature Review – Literature review will cover the background and
the development of Balanced Scorecard. limitations of Balanced Scorecard that the
organisations would face in the application will be identified. Along with this the impact
of using Balanced Scorecard in the organisations will be analysed. This segment will lay
emphasis on covering the aims and objectives of the dissertation. It will be done through
undertaking different types of research conducted by different authors. Chapter 3: Research Methodology – In this section, different types of tools and
techniques which are required for carrying out the current dissertation will be discussed.
This will help researcher in taking the present research in a right direction. Along with
this validation of the selected techniques will be provided in this chapter. At last
limitation and ethical consideration will be presented which are used by the researcher.
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 Chapter 4: Data Analysis and Findings – It is a chapter in which all the collected
information will be presented. Chapter 5: Discussion: In this chapter discussion will be done on the collected
information and compare it with secondary information.
 Chapter 5: Conclusion and Recommendations – At the last section, all conclusions will
be provided on the basis of findings. Then appropriate suggestion will be given.
1.7 Framework and analysis Design of research– In the present dissertation descritptive research design will be used.
As it assist in gatehring rich and meaningful information related to the topic. Research approach – In this study focus of researcher will be on moving from specific
information to general. Therefore inductive approach will be undertaken in this research/ Research philosophy – Interpretivism philosophy will be used. Techniques of research – Qualitative technquie will be undertaken under which thematic
analysis will be done for presenting the findings Method for data collection – Both primary and secondary method will be used for
collecting the information. In primary research survey method will be used where
questions will be asked from employees of HK companies. On the other hand for
collecting the secondary information there are different sources such as websites, books,
and journals. In the present study literature work is based on the secondary information. Sampling technique – The sample selection for the study will be probabilistic nature
which provides equal chanced to people from the entire population. Here 50 employees
of HK companies will be selected with the use of random sampling methods. The
questionnaire will be used in respect to get opinion and view of the employees related to
the impact of balance scorecard.
 Analysis of data – There is used of qualitative method in respect to analyse the collected
data. There will be thematic approach will be used for analysing the information which is
collected from primary source.
1.8 Potential Significance
.The present research is important as it helps in developing the knowledge regarding the
present topic that is the impacts of using Balanced Scorecard (BSC) system in
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the organisations and the implementation of BSC by the organisations including large companies
and small and medium enterprises. It will help in identifying the way balance score card system
lead to improve the performance of the firm and help them in reaching the goals and objectives
on time. This research will provide potential significance related to the followings:
The HK companies will be provided assistance form this research. They will easily use the
balance scorecards system for measuring the performance of different areas within the
organisation.
Further the research will helpful in developing deep understanding related to the BSC and
its impact of the organisations.
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CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
Literature review chapter is one of the important section which provide information
related to the present topic. It help researcher in collecting the large amount of information and
apply it for getting valid result. The present study is based on evaluating the impacts of using
Balanced Scorecard (BSC) system in the organisations and the implementation of BSC by the
organisations including large companies and small and medium enterprises. This section provide
detail in information regarding the importance of BSC and its effectiveness which help in getting
the valid result. The literature review is prepared on the basis of aims and objectives which make
easy to accomplish the main aim of the research. Apart from this, themes are prepared on the
basis of which all the collected information is presented in systematic manner. However, it
provides background and the development of BSC and analyse the impact of the BSC on
organisations.
2.2 To understand the importance of Balance scorecards system
According to the view of Cooper, Ezzamel, and Qu, (2017) The balanced scorecard is
developed in the 1990s and it is a performance measurement system. It is basically used within
the organization for measuring the performance of different areas. It is more effective as
compared to the other measuring tools such as financial measures etc. The BSC Suggest that it
view organization from the different perspective that is financial, internal process, organisational
capacity, and customer/stakeholder. Financial are used in order to measure the financial
performance of the company and the use of financial resources. Further customer perspective is
the view of the organisation performance from the point of customers which a firm has designed
to serve. The third perspective of BSC system is the internal process in which the performance of
the organisation is the view from the lense of quality of product and services which are
developed for the customers. At last the organisation capacity in which performance is the
measure of the technology, human capital, culture and other capacities. As per the view of Lin,
Hu Tseng and Lin, (2016) the main of the scorecard is to measure the financial and nonfinancial
performance in a single report. Therefore, it provides information to the manager which is
relevant and important for the organization. There is three distinct generation of the balance
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scorecard design. In the first generation, BSC had only 4 boxes for approaching the performance
measurement. While in second generation BSC it is linked with the first generation but it
identifies two different areas of the concern that is filtering and clustering. Therefore, BSC is
very effective for the organisation as it leads to provide the area within the organisation which is
required to improve. Along with this, the company can easily accomplish its aims and objectives
with the use of BSC system. However, there is some limitation for such measures. It can help in
measuring the one aspect of the company and there is no link between its result and performance.
This will help the company in identifying the weak area where improvement is required. Balance
scorecard is responsible for creating, popularising and expanding the number of terms and
concepts which are used in management strategy. There are many large organisations who
basically used balanced scorecard for the purpose of management tools as there are many among
them who unable to find its usefulness. There are many small business enterprises who gain
profit from implementing the balance scorecards as compared to large companies who get failed
in implementing it successfully. In the recent time, there are many publications which are related
to the balance scorecards which have been appeared in recent times. Balance scorecard is
popular as because of its products and general techniques which is enhancing gradually and is
surely useful at present.
It is evaluated that there are more than 50% of companies who are using BSC in their
decision-making process. It is also found that the techniques of BSC have been translated into 19
different languages. Therefore, it reflects that techniques related to the balance scorecard cards
and its version are more widely accepted by small and large business enterprises. As these
techniques are introduced in the corporate world then there are more large and advanced firms
who adopted to them. While there are small enterprises who are slow in adopting BSC
techniques. In respect to the bridge, these gaps in management techniques the SME are
encouraged to gain knowledge regarding this and adopt them. Through training and development
programme in which benefits of implementing the BSC are highlights is effect in order to
improve the popularity of them among smaller organisation. One of the important aspects of
introducing balance scorecards in the SME is lead to involvement of job creation.
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The concept of BSC is related to conventional thinking about performance metrics. It
help manages in developing better understanding related to how well the company is performing
as compared to the traditional method of measuring performance. According to the opinion of
Hoque, (2014) the main aim of balance scorecard is to bring the mission, vision, and objectives
of the firm into perspective with the use of key performance indicators and decision making. In
BSC there are four major categories that are as follows:
Financial perspective
Customer services
Internal business process
learning and growth
Through keeping these four perspectives of balance score card model in view
management need to ensure that they not only focus on one aspect and ignore other aspects. For
an organisation, it is not easy to incorporate new techniques of management with the less number
of people. Therefore, it becomes difficult for the firm to reduce the challenges which they face
while implementing Balance scorecard system. Bhattacharya, Mohapatra and Nudurupati, (2014)
state that impact of balance scorecard is larger on the small enterprises. There are many functions
in the organisation for which balance scorecard is used such as HR scorecards, stakeholder
scorecard etc. but they are not states as balanced scorecards. As because balance scorecards is
known as the performance measure which is basically used for managing and controlling the
strategy in the firm. After developing and mission and vision of the firm the role of balance
scorecards are started as it help in making sure that the firm is tracking measures which represent
progress in carrying out the strategy. There are two popular kinds of measures are lag measures
which show the end of a time period and other one is financial measure.
2.2 Limitations of Balanced Scorecard that the organisations would face in the application
According to the view of Valmohammadi and Ahmadi, (2015) the balance scorecards
have several limitations which organisation can face at the time of implementing. It becomes an
end itself as it required lots of time and expenses for implementing properly in the system. Cost
included in the implementation is related to the designing the scorecards and communicating
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