From Performance Measurementto Strategic Management Model Balanced Scorecard
From Performance Measurementto Strategic Management Model Balanced Scorecard
From Performance Measurementto Strategic Management Model Balanced Scorecard
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(online) = ISSN 2285 – 3642
ISSN-L = 2285 – 3642
Journal of Economic Development, Environment and People
Volume 4, Issue 1, 2015
URL: http://jedep.spiruharet.ro
e-mail: [email protected]
1.1. Performance
Performance is a concept which determines obtained things quantitatively and qualitatively as result
of intentional and planned event (Akal, 2005). On the other hand, performance can be described as ability
of producing results aimed at certain objectives and priorities within a certain time (Akman et al., 2008). In
the literature of business, performance of a business system can be described as result of specific working.
Changing Work Life: In production systems along with information age, share of items which forming
production cost occurred changes. Production transformed from labour-intensive to capital-intensive and
technology-intensive (Şimşek&Nursoy, 2002).
Increasing Competition: Today’s businesses which are operating in global markets are under a
constant pressure about decreasing their cost and increasing their quality of goods and services
(Şimşek&Nursoy, 2002).
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(online) = ISSN 2285 – 3642
ISSN-L = 2285 – 3642
Journal of Economic Development, Environment and People
Volume 4, Issue 1, 2015
URL: http://jedep.spiruharet.ro
e-mail: [email protected]
National and International Quality Awards: National and international institutions organizes various
organizations which include awards in order to increase quality. However, in order to get determined
award you must perform criteria which based on performance (Şimşek&Nursoy, 2002).
Changing Roles of Organizations: Accounting and finance departments in information age's businesses
produces not only information required for external reporting but also produces other information
required by management in order to perform activities (Akal, 2005).
Changing External Demand: Today's business faces with very different external demand now. The main
demanding parties consist of laws, regulations, customer organizations, shareholders, public opinion, the
media and civil society organizations (Şimşek&Nursoy, 2002).
Power of Information Technology: Technological advancements only did not provide easier way to
obtain and analyze data, in addition it made possible to new opportunities with regard to data. For
example, electronic sales systems produced opportunities for monitoring buying habits of individuals and
also it offered to chance for monitoring result of discounting. At the same time, software packages allowed
to use systems of balanced performance measurement (Akal, 2005).
1850-1925; The Development Process of Cost and Management Accounting: Although technology was
important during this period, it generally were used to provide an effective method for the purpose of
producing large quantities (Kaplan &Norton, 1999). Significant accounting techniques were developed and
used as performance evaluation tool in this period. Basic cost and management accounting methods such
as standard costing and budgeting techniques used today were developed and were used in this period
(Wilcox &Bourne, 2003).
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(online) = ISSN 2285 – 3642
ISSN-L = 2285 – 3642
Journal of Economic Development, Environment and People
Volume 4, Issue 1, 2015
URL: http://jedep.spiruharet.ro
e-mail: [email protected]
criteria as customer satisfaction, employee satisfaction, quality, market share, brand value in addition to
financial criterions started to be used.
1992-2000; Strategy Maps, Business Models and Developments in Cause and Effect Diagram: Since
the 1980s, in order to eliminate inadequacies of performance evaluation methods which based on financial
criteria became evident multidimensional performance evaluation methods but these methods did not
fulfill requirements of the information age. As a result, we needed to methods of covering the whole of the
business and comply with business strategy and as a result of these seeking an appeared development
which is the third stage of performance evaluation such as strategy maps, business models, and cause and
effect diagrams (Wilcox&Bourne, 2003).In the last point where we stand now in historical process of
performance evaluation methods; to remedy the deficiency of traditional performance evaluation methods
emerged multidimensional and strategy-oriented performance evaluation methods. Figure 1 shows
changes in the performance evaluation process by years.
10
(online) = ISSN 2285 – 3642
ISSN-L = 2285 – 3642
Journal of Economic Development, Environment and People
Volume 4, Issue 1, 2015
URL: http://jedep.spiruharet.ro
e-mail: [email protected]
3. Balanced Scorecard
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(online) = ISSN 2285 – 3642
ISSN-L = 2285 – 3642
Journal of Economic Development, Environment and People
Volume 4, Issue 1, 2015
URL: http://jedep.spiruharet.ro
e-mail: [email protected]
12
(online) = ISSN 2285 – 3642
ISSN-L = 2285 – 3642
Journal of Economic Development, Environment and People
Volume 4, Issue 1, 2015
URL: http://jedep.spiruharet.ro
e-mail: [email protected]
innovation (Kaplan &Norton, 1999). In financial perspective, we search for answer to question. This
question is that how should be our image which seen by our shareholders? And generally, business
objectives are determined on the axis with profitability, growth and shareholder value (Kaplan &Norton,
1992). Balanced Scorecard sees financial perspective as purpose of business (Kaplan &Norton, 2006).
Financial objectives of different departments which located in business create Balanced Scorecard and
Balanced Scorecard associate to business strategy. Financial objectives which located on Balanced
Scorecard with this aspect focus on objectives and criteria of other perspectives. Every measure located in
financial performance should be a part of cause and effect relation which play role in financial
performance. Balanced Scorecard starts from a long-term financial objective to achieve these objectives
needed financial transactions, customers, internal processes, people and systems (Kaplan & Norton, 1999).
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responsibility centres and measurement system, performance scorecard brings performance evaluation
system which include in purchasing, production, planning and control (Kaplan &Norton, 1999).
4. Conclusion
Performance Measurement Systems which handling results of business activity only from a financial
point didn’t survive in today's economic environment. Additionally, performance measurement systems
only which using non-financial measures apart from financial perspective didn’t full fill the needs of
business either. Economic and technological developments revealed that performance in businesses should
be measured as versatile. At the same time, it revealed that system in accordance with business strategy
should become functional. Balanced Scorecard that has experienced all processes which occurred in
performance measurement and evaluation system is a model, at same time it used as a management tool.
Learning and development perspective is a determinant of other perspectives. Performance is evaluated
with financial, customer, internal processes and learning and growth dimensions by basing on company's
vision and strategy. In addition, objectives and criteria between dimensions are connected each other with
cause and effect relationship. Financial dimension is the dimension of final performance which shown the
result of all dimension. Balanced Scorecard play an important role in determining how a strategy will be
implemented in business, who will implement this strategy and how this strategy will be implemented.
5. References
[1] Achterbergh, J. et al. (2003) Does The Balanced Scorecard Support Organizational Viability?, Kybernetes, 32 (9-
10), p. 1387-1404.
[2] Akal, Z. (2005)İşletmelerde Performans Ölçüm ve Denetimi Çok Yönlü Performans Göstergeleri, (6th edition),
Ankara: Milli Prodüktivite Merkezi Yayınları No: 473.
[3] Akman, G. et al. (2008) Strateji Odaklılıkve Firma Stratejilerinin Firma Performansına Etkisinin Analizi, İstanbul
Ticaret Üniversitesi Fen Bilimleri Dergisi, 7 (13), p. 93-115.
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(online) = ISSN 2285 – 3642
ISSN-L = 2285 – 3642
Journal of Economic Development, Environment and People
Volume 4, Issue 1, 2015
URL: http://jedep.spiruharet.ro
e-mail: [email protected]
[4] Bititci, U. S. et al. (1997) International Journal of Operations & Production Management Emerald Article:
Integrated Performance Measurement Systems: A Development Guide, International Journal of Operations &
Production Management, 17 (5), p. 522-534.
[5] Ensari, H. (2005) 21.yy. Okulları için Etkili bir stratejik Yönetim Aracı: Balanced Scorecard. (1th edition), İstanbul:
Sistem Yayıncılık.
[6] Garengo, P. (2009) A Performance Measurement System for SMEs Taking Part in Quality Award Programmes,
Total Quality Management, Vol. 20, No: 1,p. 91–105.
[7] Güner, M. F.;Memiş,M.Ü. (2007) Kurumsal Performans Değerlendirme Yöntemlerinin Gelişim Süreci:1850’lerden
2000’lere Bir İnceleme, Çukurova Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 16 (2), p. 299-310.
[8] Kaplan, R. S. ; Norton, D. P. (1992) The Balanced Scorecard –Measures That Drive Performance, Harvard Business
Review, January-February, p. 71-79.
[9] Kaplan, R.S. ; Norton, D.P.(1999)Balanced Scorecard: Şirket Stratejisini Eyleme Dönüştürmek, (Trans.. Serra Egeli),
İstanbul: Sistem Yayıncılık.
[10] Kaplan, R.S.; Norton, D.P. (2001)The Strategy Focused Organization, Boston: Harvard Business School Publishing
Corporation.
[11] Kaplan, R.S.; Norton D.P.(2008)TheExecution Premium Linking Strategy To Operations For Competitive
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[12] Kaplan, R.S.; Norton D.P.(2006)Strateji Haritaları: Gayri Maddi Varlıkları Maddi Sonuçlara Dönüştürmek, (Trans.
Şeyda Öztürk), (1th edition), İstanbul: Alfa Yayınları.
[13] Lawrie, G. ; Cobbold, I. (2004) Third-GenerationBalancedScorecard: Evolution Of An Effective Strategic Control
Tool, International Journal Of Productivity and Performance Management, 53(7), p.611-623.
[14] Neely, A. (1999) ThePerformanceMeasurementRevolution: Why Now And What Next?, International Journal of
Operations &Production Management, Vol. 19, No. 2, p.205-228.
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International Journal of Operations &Production Management,25, 12, p. 1228-1263.
[16] Pirtini, S. (2010) Pazarlamada Müşteri Odaklılık ve Balanced Scorecard, (1th edition), İstanbul: Beta Yayınları.
[17] Santos, M. F. et al. (2007)Towards A Definition Of A Business Performance Measurement System International
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[18] Şimşek, M.;Nursoy M. (2002) Toplam Kalite Yönetiminde Performans Ölçme, İstanbul: Hayat Yayıncılık.
[19] Speckbacher, G. et al. (2003)A Descriptive Analysis On The Implementation Of Balanced Scorecards in German-
Speaking Countries, Management Accounting Research,No:14, p. 361-387.
[20] Virtanen, T. (2009)Guidelines for Implementing Balanced Scorecard, QPR Software Plc.
[21] Crabtree, A.D.; De BuskG. K. (2008)TheEffects Of Adopting The Balanced Scorecard On Shareholder Return,
Advances in Accounting, incorporating Advances in International Accounting, No:24, p. 8-15.
[22] Niven, P.R. (2002) Balanced Scorecard Step-By-Step – Maximizing Performance and Maintaining Results. New
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[23] Wilcox, M.;Bourne, M. (2003)Predicting Performance, Management Decision, Vol. 41, Iss: 8, p. 806-816.
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