AAT 20903

PERFORMANCE MANAGEMENT II

SEMESTER 4

THE RELEVANCE OF BALANCE SCORECARD IN THE CUTTING EDGE OF

ACCOUNTING ERA

SESI 2022/2023

DATE OF SUBMISSION : 30th June 2023

https://drive.google.com/file/d/1B-BfH0fAzD8RaA5vSMW-XhVawIUJsI4
Q/view?usp=sharing

No. Group Members Matric No.

1 ALI ALI MOHAMMED ALGHAIL A21A3217

2 MOHAMAD IKMAL BIN ISHAMUDIN A20A1457

3 MUHAMMAD SHAHIR BIN MOHD ZAIDI A21B3330

4 PANIMALAR D/O VISWANATHAN A21B3428

5 THARISANA D/O KARUNAGARAN A213473

Introduction

There is a growing trend in the contemporary environment towards the sustainable

development of company activities through the use of innovations. There are dangers associated
with the industrial environment's turbulent and dynamic characteristics. Due to the variety of
client requirements and short product life cycles, traditional procedures are no longer sufficient.
To succeed in the market and remain competitive, strategic thinking is necessary. Enterprises will
be able to profit from risk management, cost reductions, effective human resource management,
and in particular, innovation policy implementation, through the application of strategic thinking.
The current stage of development in the field of strategic management is based on managers'
propensity for predicting future events and the course of markets.

The Balanced Scorecard is a strategic performance management framework that enables

organizations to align their activities with their overall strategic objectives. It provides a
structured approach for measuring, monitoring, and managing performance across multiple
dimensions. The framework recognizes that financial measures alone are insufficient in assessing
the overall health and success of an organization. By using the Balanced Scorecard,
organizations can translate their strategic objectives into concrete performance measures for each
perspective. These measures are then monitored regularly to assess progress and identify areas
for improvement. The Balanced Scorecard framework promotes a balanced and integrated view
of organizational performance, allowing organizations to align their activities with their strategic
goals, communicate the strategy throughout the organization, and make informed decisions to
drive performance improvement.
1.1 The Definition Of The Balance Scorecard

The purpose of the Balanced Scorecard (BSC) is to measure operating performance from
either a financial or non-financial perspective, to assist organizations in defining their vision,
strategy and adapting it to specific activities, also to implement measures that are accurate,
comprehensive, and provide accurate, correct information to managers to aid in business
decision-making. A comprehensive set of performance metrics that are strategically aligned with
creativity make up the Balanced Scorecard Strategic Management System, which is composed of
a core principles framework and processes that interpret an organization's mission and strategy.

The Balanced Scorecard (BSC) measures accomplishment from four viewpoints: the
perspective of the customer, the perspective of internal process, the perspective of the financial,
and the perspective of learning and growth. This is a balance between long-term goals and
short-term objectives, between external and internal standards for businesses, between desired
structure and actual results, and the satisfaction of these elements will support businesses' steady
growth in today's fiercely competitive and deeply integrated economy. BSC can help the business
focus its attention on these areas while defining and expressing the problems' priority to the
manager, employees, investors, and clients.

The balanced scorecard provides a visual representation of how the chosen goals might be
attained as well as the success elements required to do so. The BSC approach enables businesses
to receive input on their control from each organizational unit, which will improve their financial
performance and allow them to innovate in specific organizational areas. The causal use of the
chain heightens awareness of the corresponding metrics, expands the scope of the search, and
improves the decision-making process for the outcome.
1.2 History of the Balance Scorecard
Early in the 1990s, Dr. David Norton, a consultant, and Dr. Robert Kaplan, a Harvard
Business School professor, realized the need for a more thorough performance evaluation
framework. This is when the Balanced Scorecard was first created. Indicators of financial
performance were the main focus of then-current traditional performance assessment systems,
leaving out other significant elements of organizational performance.

By creating a framework, Kaplan and Norton hoped to overcome the shortcomings of

current assessment tools and offer a more accurate picture of organizational performance.
Working with a group of 12 businesses from various industries, they started a study initiative to
test and improve their concepts.

The Harvard Business Review published a piece by Kaplan and Norton in 1992 titled "The
Balanced Scorecard: Measures That Drive Performance." This article highlighted how the
Balanced Scorecard may aid organizations in coordinating their efforts with their strategic
objectives and introduced the idea to the business community.

Four viewpoints were included in the first structure Kaplan and Norton suggested: financial,
customer, internal company processes, and learning and growth. Specific performance indicators
were identified for each perspective, which each indicated a different aspect of performance.

Organizations began to recognize the advantages of the Balanced Scorecard in offering a

more thorough and balanced approach to performance measurement, which led to a major
increase in attention and popularity. Over time, Kaplan and Norton improved and broadened the
framework, producing a number of books and articles that examined the Balanced Scorecard's
various features and uses.

Today, organizations from a variety of sectors and industries use the Balanced Scorecard
extensively. It has evolved into a vital tool for organizational success, strategic management, and
performance evaluation.

The development of the Balanced Scorecard is a result of the joint efforts of Kaplan and
Norton, who were committed to overcoming the shortcomings of conventional performance
measuring methods and seeking to give organizations a more comprehensive perspective of
performance. Their ground-breaking work has had a long-lasting effect on how businesses
gauge, control, and raise performance.

1.3 Perspectives Of The Balance Scorecard

Organizations can attain balance in performance measurement across multiple aspects by

implementing the Balanced Scorecard. It comprises a behavioral approach towards
accomplishing shared goals and guaranteeing sustainable development, going beyond simply
concentrating on the end company results. Managers can achieve genuine organizational
performance in relation to predetermined goals by employing the four viewpoints to match their
vision and strategy with the organization's operations and procedures. This alignment is
facilitated by the Balanced Scorecard, which gives managers the ability to track progress and
take wise decisions that will promote organizational success. These are the four viewpoints on a
balanced scorecard:
Learning & Growth Perspective

The effectiveness and efficiency of an organization's internal operations and processes are
examined from the internal process perspective. It entails identifying and evaluating the crucial
processes and activities that fuel value creation and enhance customer satisfaction. Cycle time,
process quality, cost effectiveness, and innovation are a few examples of metrics in this
viewpoint. The internal process perspective aids businesses in streamlining their processes and
raising overall productivity.

Internal Process Perspective

The ability of the organization to learn, innovate, and develop its people and capacities is
the focus of the learning and growth perspective. It comprises metrics for worker skills and
knowledge, employee happiness, staff training and development, and technology adoption. This
viewpoint acknowledges the need of ongoing learning and development for an organization's
long-term performance and competitive advantage.

Customer Perspective

The customer viewpoint looks at how customers view the company and how well it satisfies
their wants and expectations. It covers metrics like market share, customer loyalty, customer
happiness, and customer retention. This viewpoint enables businesses to comprehend, enhance,
and guarantee the worth they provide to their target markets in their client relationships.

Financial Perspective

The organization's financial performance is evaluated from a financial perspective, which

emphasizes financial outcomes. It comprises variables like cash flow, return on investment
(ROI), profitability, and revenue growth. The organization's ability to achieve its financial goals
and objectives can be evaluated using a financial perspective.

The Balanced Scorecard offers a balanced assessment of the organization's performance by

taking into account these four perspectives. It enables organizations to evaluate their learning and
growth objectives, internal process efficiency, customer happiness, and financial performance.
Organizations can better coordinate their efforts with their strategic goals, track their success,
and foster all-around performance improvement with the aid of this holistic approach.

2.0 One application of the balanced scorecard in any company from any country

In the article, "An Analysis Based on the Balanced Scorecard Concept," Somnuk
AUJIRAPONGPAN, Kanookwan MEESOOK, Pornpan THEINSATHID, and Chanidapa
MANEECHOT explain Performance Evaluation of Community Hospitals in Thailand. Whereas
the Balanced Scorecard (BSC) concept was created for profit-based associations, the application
of the BSC in open and nonprofit associations (NPOs) can be carried out inside the NPOs and
open wellbeing segment, as the conceptual establishment of this framework was created from
community hospitals execution. In this study, 52 community clinics found in upper southern
Thailand were inspected utilizing the BSC concept to explore 16 key performance pointers and
execution designs amid the past five a long time, as well as changes from 2013 to 2017. A survey
and an yearly report were among the instruments. Rates, midpoints, and standard deviations were
calculated utilizing insights.

Therefore, it is important to approach the topic of performance measurement from a

balanced perspective (Kaplan and Norton, 1996). Researchers and practitioners have shown great
interest in the Balanced Scorecard (BSC). According to Silk, 60% of Fortune 1000 companies
implement BSC or attempt to do so, according to Gautreau and Kleiner (2001). Schneiderman
(1987) first used the balanced scorecard in analog devices more than 20 years ago, while Kaplan
and Norton (1992) published their first HBR paper more than 15 years ago (Bourne et al. , 2008).
According to Kaplan and Norton (1996), the Balanced Scorecard (BSC) is a robust and balanced
strategic management system that facilitates strategy execution by using metrics to ensure
assurance that the vision and strategy of the business is realized and realized.

Community Healing centers (CHs) are government-run educations that give healthcare
administrations. They incorporate area clinics spread all through 780 destinations around
Thailand. They are the wellbeing units that give restorative and open wellbeing administrations
at the local level and are the littlest healing centers beneath the Service of Open Wellbeing. They
contain between 100 and 300 beds for patients, standard specialists, and other open wellbeing
workforce. The administrations have a solid center on sickness avoidance, clean administrations,
wellbeing advancement, and restorative determination, treatment, and restoration. Whereas
compiling measurements and information for introduction to the common open wellbeing
segment, these offices encourage quiet referral administrations for extra therapeutic care.
However, they had to bargain with issues relating to work productivity and wellbeing
administrations, counting those relating to labor, benefit offices, medicine, innovation, and funds,
as well as issues emerging from the results of the wellbeing benefit framework, adequacy, and
the reasonableness of the framework. Community healing centers must have elective execution
measuring strategies that are more valuable to bolster execution administration in arrange to
address current issues, adjust to current conditions, and compete among wellbeing benefit
frameworks with more successful changes.The BSC, created in 1992 by Kaplan and Norton, is
the instrument that is most frequently used.

It was a brand-new instrument for performance management and for gaging work
effectiveness. Monetary and non-financial components make up the two components of the BSC.
Four perspectives make up these measurements: the money related point of view, the customer
perspective, the internal process perspective, and the learning and growth point of view. Despite
being made for for-profit associations, the BSC can be connected to open and nonprofit
associations inside the NPO and government segments since its conceptual underpinnings were
determined from execution appraisal and key administration, which are far reaching patterns in
today's work management.

First, the customer viewpoint on the performance of community hospitals in 2017. The
average number of complaints per 1,000 patients was 9.7, or 0.0097%. Inpatient satisfaction was
on average 86.75%, while outpatient satisfaction was on average 83.57%. The term "outpatient
waiting time" refers to the amount of time patients waited between the time they made their
cards and the time they received outpatient care or a doctor's appointment. The average wait time
for outpatient care was 91.89 minutes. 20.03 minutes was the shortest and 261.00 minutes was
the greatest time.Due to various factors, the patient complaint rate is extremely low while the
patient satisfaction rate is over 80%. These factors include the fact that the majority of
community hospitals are secondary facilities that provide simple rather than complex medical
care. Most of the patients are from disadvantaged backgrounds and use a national health card for
30 baht. Therefore, they do not expect to receive a high standard of care compared to large or
private facilities. The patient's only goal is to get rid of their symptoms or illness. If patients do
not get better, they are sent to hospitals with more comprehensive and thorough care. In addition,
there is little scope for patient complaints. Therefore, the results of complaints or satisfaction
assessment are at a good level, meeting the standards because the main complaint channels are
hospital complaint forms, complaints through hospital websites or other technologies are almost
absent. The average waiting time for outpatient care was determined to be 1.30 hours, far too
long for care in private hospitals. This is because city hospitals have more patients seeking care
there, but inland or remote areas often lack doctors and other medical professionals. Patients
have to wait a long time to be seen because village hospitals usually only have one or two
doctors working each shift.

Second, from a financial perspective, in general, hospitals suffer losses due to the ratio of
total revenue to total expenditure of 0.9949. By hospital, 20 hospitals accounted for 39.22% of
revenue loss, while 31 hospitals (60.78%) made a profit. The proportion of personal expenditure
to total expenditure is 40.11%. The cost of drugs and raw materials accounted for the proportion
of total expenditure of 13.32%. The proportion of training expenditure in the total expenditure is
0.58%. Hospitals, or 60.78% of all community hospitals, experience moderate losses. This is due
to the nonprofit status of community hospitals. In addition, the government has a universal health
care policy, allowing all Thai citizens to have full access to medical care, including foreign
workers working in Thailand. Outpatient and inpatient care receive separate funding from the
Department of Public Health. To budget hospitals based on patient numbers and interests, the
government requires people to register with the facilities. With capitation or full payment of
outpatient treatment fees, the National Health Security Office (NHSO) in Thailand was unable to
efficiently charge patients. Therefore, regardless of the severity of the patient's health or the cost
of treatment, the hospital is always solely responsible if the patient needs more than one
treatment. Meanwhile, patients were grouped according to their condition (DRG). NHSO used
DRG to pay for inpatients; Hospitals reported illnesses and these groups received full payment.
For example, the cost of a C-section can be reduced by symptoms known as Adjusted Relative
Weight or Adjusted RW. NSSO was able to avoid the risk through outpatient capitation and DRG
for hospitalized patients. With all health insurance, dangers for providers can be avoided.
Hospitals are actually forced to provide services because they cannot turn away patients.
 A loss in accounting results in lower income than expenses. The NHSO, or Universal
Health Care, provides most of the funding for public hospitals, especially the Department of
Public Health. While the costs are very large, about 70-80% of service fees, hospitals receive
only 50-60% of service fees. However, public hospitals have high rates of ongoing losses or
expenses that they cannot avoid, such as staff costs (more than half of total costs), drug and
supplies costs, medical expenses. Build buildings and buy medical equipment.

The average length of stay was 3,281 days, with a minimum of 2,000 days and a
maximum of 10,730 days, according to a third view of internal processes. With proper bed use,
the average bed turnover rate is 88,168. However, more than half of community hospitals
(51.92%) have unreasonable bed turnover and need to adjust the service system (bed rotation rate
is 80). The average hospital bed occupancy is 77,824, with the hospital bed occupancy below 80
indicating that the service system needs to be improved. The mean nosocomial infection rate was
0.379 per 1000 patient days, ranging from 0.000 to 1,020 per 1000 day. With a low of 2 and a
high of 391 people, the average mortality rate is 2,298. Over the 28-day period, the average
admission rate was 6.307%. The efficiency of hospital bed use and the efficiency of treatment
services are both reflected in the capacity of hospital beds. First-class hospitals and first-class
hospitals use hospital beds less efficiently. This is because they rarely admit patients or don't
have many hospitalized patients. Most of these facilities provide simple, gentle care for common
ailments. They lack specialists and only general practitioners. Hospitals transfer patients to other
better equipped facilities when they have symptoms or are seriously ill. Their deposits were
therefore not fully mined.

Regarding the fourth factor, learning and growth perspective, hospital staff are generally
satisfied with their work with a rate of 70.20%. The average employee turnover rate is 4.69. With
a minimum of 0 articles and a maximum of 18, the average number of studies per year is 3.77
titles or articles. Since most of the employees are officials and ordinary employees who receive
fixed salaries and benefits and have stable lifestyles, employee satisfaction is high and employee
turnover is low. Both inside and outside the business, they have received high praise from the
public. After receiving help from them, their interactions with colleagues were very positive. As
a result, the employee satisfaction rate is high and the employee turnover rate is low. This is
consistent with the findings of someone who examined employee satisfaction at Khukhan
Hospital in Khukhan District, Si Saket Province and found that salary and social protection, job
security, promotion and promotion are the factors most closely related to employee satisfaction. .
These results all contribute to low turnover rates.

To sum up the piece, "An Analysis Based on the Balanced Scorecard Concept,"
Performance Evaluation of Community Hospitals in Thailand is improving the quality of care
can be difficult in community hospitals. Community hospitals can lag behind larger hospitals and
health systems in terms of resources. However, this does not mean that small hospitals cannot
move forward; they just need to use alternative tactics. According to the analysis, there was no
discernible progress in any of the metrics between 2013 and 2017. Through discussion of BSC
outcomes in community hospitals, community hospital leadership should support a highly
efficient health care system and improve healthcare policies and practices. Community hospitals,
as non-profit organizations, should focus on how to improve patient satisfaction, wait times,
employee satisfaction, and cost-effective management to further improve further by promoting a
well-functioning health system and how to improve health care policies and practices.

3.0 Three issues in Balance Scorecard

Inadequate alignment of objectives and metrics is a common issue that can hinder the
effectiveness of a balanced scorecard implementation. By encompassing different viewpoints,
including financial, customer, internal processes, and learning and growth, the balanced
scorecard framework is intended to provide a comprehensive view of an organization's
performance. Each perspective has a unique set of goals and related indicators that are in line
with the organization's overarching strategic objectives. This topic has been the subject of
numerous studies or study, ,

1. Source: Kaplan, R. S., & Norton, D. P. (2016). The Balanced Scorecard: Translating Strategy
into Action. Harvard Business Review.

Kaplan and Norton, the creators of the balanced scorecard framework, emphasize the
importance of aligning objectives and metrics with strategy. They highlight the need for
organizations to establish a cause-and-effect relationship between strategic objectives and
performance metrics to ensure proper alignment.
2. Source: Ittner, C. D., & Larcker, D. F. (2017). The performance effects of coaching: A
multilevel analysis using balanced scorecard data. Journal of Accounting Research.

This study examines the impact of coaching on performance using data from the
balanced scorecards of multiple organizations. It highlights the need for aligning coaching
objectives with the balanced scorecard measures to enhance overall organizational performance.

3. Source: de Waal, A. A., & Counet, H. L. (2017). Designing a balanced scorecard for a lean six
sigma healthcare organization. Total Quality Management & Business Excellence.

This article focuses on designing a balanced scorecard for a lean six sigma healthcare
organization. It emphasizes the importance of aligning performance metrics with strategic
objectives and provides a framework for creating a well-aligned balanced scorecard.

4. Source: Norreklit, H. (2018). The balanced scorecard: What is the score? A rhetorical analysis
of the balanced scorecard. Management Accounting Research.

Norreklit conducts a rhetorical analysis of the balanced scorecard and raises concerns
about the alignment of objectives and metrics. The study argues that the balanced scorecard may
be more of a reporting tool rather than an effective performance management system if the
alignment is not properly established.

5. Source: Bititci, U. S., & Albores, P. (2020). From performance measurement to management:
a performance engineering framework. International Journal of Operations & Production
Management.

This article proposes a performance engineering framework that emphasizes the

importance of aligning metrics with strategic objectives. It provides a step-by-step approach to
designing and implementing a performance measurement system, including the balanced
scorecard, with proper alignment.

These sources collectively highlight the significance of aligning objectives and metrics in the
balanced scorecard implementation. They stress the need for organizations to clearly define their
strategic objectives and establish a cause-and-effect relationship between these objectives and the
performance metrics chosen. This alignment ensures that the balanced scorecard effectively
measures progress and supports strategic decision-making within the organization.

When there is inadequate alignment, it means that the objectives and metrics chosen for the
balanced scorecard may not accurately reflect the organization's strategic priorities or may not be
directly linked to achieving the desired outcomes. This can result in several challenges:

Lack of clarity: If the objectives and metrics are not clearly defined and aligned with the
organization's strategic direction, it becomes challenging for employees to understand what they
need to focus on and how their performance will be evaluated. This ambiguity can lead to
confusion and a lack of direction, ultimately affecting the effectiveness of the balanced
scorecard.

Misaligned efforts: When objectives and metrics are not properly aligned, it is possible for
different departments or individuals within the organization to pursue conflicting goals. Due to
separate teams maybe working towards distinct goals without a common understanding of the
organization's overarching strategy, this can lead to silos and hamper collaboration.

Inaccurate measurement: A balanced scorecard's metrics should provide actionable information

that can be utilised to monitor progress and guide decisions. When there is insufficient
alignment, the chosen measurements may not accurately reflect performance or effectively
capture the targeted results. This might impair the organization's ability to make data-driven
decisions and result in false conclusions regarding the efficacy of strategic efforts.

To address the issue of inadequate alignment of objectives and metrics, organizations should take
the following steps:

Clearly define strategic objectives: Organizations need to have a well-defined strategic direction
that outlines their mission, vision, and goals. These objectives should be specific, measurable,
achievable, relevant, and time-bound (SMART) to provide clarity and focus.

Align objectives with metrics: Once the strategic objectives are established, organizations should
identify the metrics that align with each objective. It is important to choose metrics that are
meaningful, quantifiable, and directly linked to the desired outcomes. This alignment ensures
that the metrics selected accurately reflect the organization's strategic priorities.

Cascade objectives throughout the organization: The objectives and metrics should be cascaded
down throughout the organization to ensure alignment at all levels. Each department or team
should have their own set of objectives and metrics that contribute to the overall strategic goals.
This alignment ensures that everyone is working towards the same strategic outcomes.

Regularly review and update: The alignment of objectives and metrics should not be a one-time
activity. It is important to regularly review and update them to ensure they remain relevant and
aligned with the changing business environment. This ongoing review process allows
organizations to adapt their strategic initiatives and make necessary adjustments to the balanced
scorecard framework.

By addressing the issue of inadequate alignment of objectives and metrics, organizations can
enhance the effectiveness of their balanced scorecard implementation and improve their ability to
measure progress, monitor performance, and drive strategic decision-making.

The efficient collection and reporting of data is crucial for the successful implementation of a
balanced scorecard (BSC). The BSC is a strategic management framework that helps
organizations monitor and evaluate their performance across multiple perspectives, such as
financial, customer, internal processes, and learning and growth. However, organizations often
face challenges when it comes to integrating data collection and reporting systems effectively,
which can hinder the implementation and effectiveness of the balanced scorecard.

One of the primary issues is the presence of diverse data sources within an organization. Data
relevant to the different perspectives of the balanced scorecard may reside in various
departments, systems, and formats, making it difficult to consolidate and analyze the
information. For example, financial data might be stored in the accounting software, customer
data in the customer relationship management (CRM) system, and operational data in separate
databases or spreadsheets. The lack of integration among these systems can result in delays and
errors when attempting to gather the required data for the balanced scorecard.
Another challenge lies in automating the data collection and reporting process. Manual data entry
and consolidation are labor-intensive, prone to mistakes, and have a limit on how frequently data
is updated. The organisation may be unable to adapt to changes in performance or make educated
decisions as a result of obsolete information. Technology-based automation can speed up the
procedure and guarantee that data is gathered, compiled, and delivered in a timely and accurate
manner. Examples of such technologies are data integration tools.

Moreover, a fragmented view of performance may be the outcome of a lack of integration

between data gathering and reporting systems. It is difficult to analyse the connections and
dependencies between various performance measurements when data is dispersed across
numerous platforms.. For example, without an integrated system, it may be difficult to
understand how improvements in customer satisfaction (customer perspective) impact financial
performance (financial perspective) or how employee training initiatives (learning and growth
perspective) influence operational efficiency (internal process perspective). Without this holistic
view, organizations may miss valuable insights and opportunities for improvement. Lots of
studies have been made regarding this issue,

1. Kaplan, R. S., & Norton, D. P. (2016). The Balanced Scorecard: Translating Strategy into
Action. Harvard Business Review Press.

Kaplan and Norton, the creators of the balanced scorecard framework, acknowledge the
importance of data collection and reporting systems for effective implementation. They
emphasize that organizations should establish a clear process for collecting and integrating data
from various sources to ensure accurate and timely reporting.

2. Olve, N. G., Roy, J., & Wetter, M. (2017). Performance Drivers: A Practical Guide to Using
the Balanced Scorecard. John Wiley & Sons.

Olve et al. emphasize that organizations often struggle with integrating data from multiple
systems and sources, such as financial systems, customer databases, and operational systems.
These difficulties can result in delays and inconsistencies in reporting, hindering the
organization's ability to gain a comprehensive view of performance.
3. Singla, A., & Goyal, P. (2018). Balanced Scorecard Perspectives: A Survey. International
Journal of Advanced Research in Management, Architecture, Technology and Engineering, 2(2),
65-69.

Singla and Goyal's survey-based research reveals that many organizations face challenges in
integrating data collection and reporting systems. The study emphasizes the need for
organizations to invest in technological solutions that enable seamless integration and automate
the reporting process to improve efficiency and accuracy.

4. Dey, P. K., & Mohapatra, P. K. J. (2019). An overview of the balanced scorecard framework:
Its evolution, components, and applications. Benchmarking: An International Journal, 26(4),
1077-1100.

Dey and Mohapatra discuss the challenges organizations encounter when implementing the
balanced scorecard framework, including the difficulty of integrating data from disparate
sources. They highlight that organizations need to establish mechanisms to collect and
consolidate data efficiently, ensuring the accuracy and completeness of performance metrics.

5. Raju, P. S., & Sharan, V. (2020). An Empirical Study of Balanced Scorecard Implementation
in Indian Hospitals. Journal of Health Management, 22(1), 99-117.

Raju and Sharan's study specifically focuses on the implementation of the balanced scorecard
in Indian hospitals. They identify challenges related to data collection and reporting, including
issues with integrating data from multiple systems and sources. The study emphasizes the need
for hospitals to invest in robust data management systems to ensure accurate and timely
reporting.

To address these challenges, organizations should focus on improving the integration of data
collection and reporting systems. This can be achieved through various steps:

1. System Integration: Evaluate existing systems and identify opportunities to integrate data
sources. This may involve implementing middleware or data integration platforms that enable
seamless data flow between different systems.
2. Data Standardization: Establish common data formats, definitions, and metrics across the
organization. This ensures consistency and facilitates data aggregation and analysis.

3. Automation: Leverage technology solutions, such as business intelligence tools or

dashboarding software, to automate the data collection and reporting process. This reduces
manual efforts, minimizes errors, and allows for real-time or near-real-time updates of
performance data.

4. Data Governance: Implement robust data governance practices to ensure data accuracy,
security, and compliance. This involves defining data ownership, establishing data quality
controls, and monitoring data integrity.

5. Training and Change Management: Provide adequate training to employees on data collection
processes and the use of reporting systems. Additionally, communicate the benefits of integrated
data systems and drive cultural change within the organization to encourage data-driven
decision-making.

By addressing the issue of insufficient integration of data collection and reporting systems,
organizations can overcome the challenges and fully leverage the benefits of the balanced
scorecard. Integrated data systems enable a comprehensive view of performance, facilitate
informed decision-making, and support the continuous improvement efforts of the organization.

The issue of inadequate review and continuous improvement processes refers to a situation
where organizations fail to effectively evaluate and enhance their Balanced Scorecard (BSC)
implementation over time. The Balanced Scorecard is a strategic management framework that
incorporates a set of performance metrics across four key perspectives: financial, customer,
internal processes, and learning and growth. It aims to provide a comprehensive view of an
organization's performance and guide decision-making. Examples of research made,

1. Kaplan, R. S., & Norton, D. P. (2015). The Execution Premium: Linking Strategy to
Operations for Competitive Advantage. Harvard Business Press.
Kaplan and Norton, the originators of the balanced scorecard, emphasize the need for
organizations to establish a rigorous review process to assess the relevance and effectiveness of
their BSC. They argue that reviewing key performance indicators (KPIs) on a regular basis
enables organizations to identify gaps, adapt to changing circumstances, and align their strategy
execution efforts accordingly.

2. Ittner, C. D., & Larcker, D. F. (2015). Assessing Empirical Research in Managerial

Accounting: A Value-Based Management Perspective. Journal of Accounting and Economics,
60(2-3), 1-33.

In this research article, Ittner and Larcker discuss the importance of performance measurement
systems, such as the BSC, in driving organizational performance. They emphasize that a
continuous improvement process is critical to identify and rectify any shortcomings or biases in
the design and implementation of performance measurement systems.

3. Hinterhuber, A., & Mattsson, L. G. (2018). How to Make Performance Measurement and
Management Matter: The Hidden Constraints of Quantification. Journal of Business Strategy,
39(1), 44-53.

Hinterhuber and Mattsson examine the challenges associated with performance measurement and
management systems, including the BSC. They stress the need for organizations to establish
feedback loops that enable ongoing monitoring, analysis, and adjustment of the BSC. This
iterative process helps organizations identify deviations, understand their root causes, and make
informed decisions for improvement.

4. Kusi-Sarpong, S., & Grouard, S. (2020). Linking the Balanced Scorecard to Continuous
Improvement: A Review and Research Agenda. Total Quality Management & Business
Excellence, 1-25.

This article provides a comprehensive review of the literature on the link between the BSC and
continuous improvement. The authors argue that organizations should integrate continuous
improvement methodologies, such as Lean or Six Sigma, with the BSC framework. They
highlight the importance of aligning improvement initiatives with strategic objectives and
periodically reviewing the BSC to ensure it reflects the evolving needs of the organization.
However, for the BSC to be truly effective, it requires regular review and continuous
improvement processes to ensure its relevance, accuracy, and alignment with the organization's
strategic goals. When these processes are inadequate or neglected, several problems can arise:

1. Outdated Metrics: Without proper review, the metrics included in the BSC may become
outdated and fail to reflect the evolving needs and priorities of the organization. This can lead to
a misalignment between performance measurement and strategic objectives.

2. Ineffective Targets: Without continuous improvement processes, the targets set within the BSC
may not be adjusted or refined to reflect changing market conditions, customer demands, or
internal capabilities. This can result in unrealistic or irrelevant targets that do not drive
performance improvement.

3. Lack of Accountability: Inadequate review and improvement processes may contribute to a

lack of accountability within the organization. When performance metrics are not regularly
reviewed and discussed, it becomes challenging to hold individuals or teams responsible for their
performance against the established targets.

4. Missed Opportunities: Failing to review and improve the BSC can prevent organizations from
identifying opportunities for optimization and innovation. It limits their ability to identify areas
where improvements can be made, leading to stagnation and missed chances for growth.

5. Inefficient Resource Allocation: Without ongoing evaluation, organizations may not have a
clear understanding of the resources required to achieve the desired performance levels. This can
result in inefficient allocation of resources, leading to wasted time, effort, and financial
resources.

To address the issue of inadequate review and continuous improvement processes, organizations
should establish a structured and regular review mechanism for the Balanced Scorecard. This can
involve periodic meetings or workshops to assess the relevance and effectiveness of the metrics,
targets, and initiatives included in the BSC. Additionally, feedback loops should be established to
gather input from various stakeholders and ensure their alignment with strategic goals.
Continuous improvement processes should be implemented to regularly evaluate and refine the
BSC. This can include analyzing performance data, conducting benchmarking exercises, and
seeking input from employees and customers. By fostering a culture of continuous improvement
and learning, organizations can enhance the effectiveness of the Balanced Scorecard and drive
sustainable performance improvement.

Recommendations:

1. Schedule regular reviews: Establish a formal review structure where key stakeholders meet
regularly to assess the performance metrics, evaluate progress, and discuss necessary
adjustments. This ensures that the scorecard remains relevant and responsive to changing
business needs.

2. Encourage learning and innovation: Foster a culture of continuous improvement by

encouraging learning and innovation within the organization. This can include
knowledge-sharing sessions, cross-functional collaboration, and creating opportunities for
employees to suggest improvements to the scorecard and its implementation.

3. Align rewards and incentives: Link rewards and incentives to the achievement of strategic
objectives and performance metrics. This motivates employees to actively engage with the
scorecard and strive for continuous improvement.

According to a report by PwC, "Organizations should establish a formal review structure and
continuous improvement processes to ensure the balanced scorecard remains relevant and
effective in driving strategic performance" (PwC, 2021).
4.0 Conclusion

The Balanced Scorecard is a strategic performance management framework that enables

organizations to align their activities with their overall strategic objectives. It provides a
structured approach for measuring, monitoring, and managing performance across multiple
dimensions. The Balanced Scorecard is a strategic performance management framework that
helps organizations measure and manage their performance across multiple perspectives. It was
first introduced by Robert Kaplan and David Norton in the early 1990s. The Balanced Scorecard
recognizes that traditional financial metrics alone are not sufficient to provide a comprehensive
view of an organization's performance. It incorporates additional non-financial measures that are
aligned with the organization's strategic objectives. The framework typically includes four key
perspectives: Financial Perspective, Customer Perspective, Internal Process Perspective,
Learning and Growth Perspective. By using the Balanced Scorecard, organizations can ensure a
balanced and comprehensive view of their performance and strategy execution. It helps align
various departments and employees towards common objectives, facilitates communication and
understanding of strategic priorities, and enables continuous improvement by monitoring and
measuring key performance indicators (KPIs) across different perspectives. However, there are
some issues regarding the balance scorecard such as Inadequate alignment of objectives and
metrics, Insufficient Integration of Data Collection and Reporting Systems and Inadequate
Review and Continuous Improvement Processes. Nevertheless, there are lots of applicable ways
to overcome these issues such as being recommended, establishing a cause-and-effect
relationship, ensuring data accuracy and reliability, and encouraging learning and innovation.
Relevance of Balanced Scorecard application in organizations lies in several key benefits it
offers:

· Comprehensive Performance Measurement

· Alignment of Objectives

· Strategy Execution

· Communication and Transparency

· Performance Accountability

· Continuous Learning and Improvement

Overall, the Balanced Scorecard application in organizations provides a holistic framework that
goes beyond financial metrics, aligns strategy with execution, enhances communication and
transparency, fosters accountability, and supports continuous improvement. It helps organizations
effectively manage performance and achieve long-term success.
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