UNIVERSITY OF THE WEST OF SCOTLAND-LONDON
COURSE NAME: MANAGING
LECTURER: MERVYN SOOKUN MS
S A PALAN SP
TUTORIAL LAWRENCE MENSAH AKWETEY LA
DAVID CHITAKUNYE DCT
STUDENT NAME: PATRICK CHARLES MAKUNDI
BANNNER ID: B00337431
ESSAY TOPIC : Explain and
evaluate the contribution of Balanced scorecards to organisational performance
SUBMISSION DEADLINE: 17 JANUARY 2017
of the balanced scorecard in the OPM
LIST OF FIGURES
1. The Balance scorecard model by Norton and Kaplan(1992)5
Strategic managing processes that can be implemented in OPM8
Organisational performance management system can transfer the
organisation or a particular business to the desired level but when only if the
system is designed and implemented in a proper particular way. There are number
tools, approaches and techniques, that various
researchers worldwide have introduced to assist in the transformation of any
particular organisation’s vision and mission
into the desire action. By the introduction of various essential practical
approaches into the system and how the decision
maker may participate in conveying their knowledge and skills into the success
of the organisation, these tools have assist into the transformation of traditional
approaches into new ways of thinking, organising and
accessing organisation’s resources and people in term of the objectives
versus performances and predicting the organisation’s future. Logical processes
and easy to understand that makes performance management very important system by assisting to get into every level of the
business through way of raising critical questions and come up with desire solution.
Most organisation had traditional way of practising the
activities in their organisation by simply focus on measurement on the profit maximization,(
they concentrated more on financial measurement ). However in modern business environment
it has been proven the need of non financial measurement growing rapidly. In
early 1990s Robert Kaplan and Ken Norton
introduced the concept of balanced score which give the need organisation to
adopt into framework that will include the involvement measurement beyond non
2.1 BALANCED SCORECARD
Balanced scorecards is
the famous strategic performance management tools that can used by any
organisation environment to transform the mission and vision into the practical
action, setting up the objectives, measure performances versus objectives and
predict the future by aligning the financials part, people, customers and learning
and development. The methodology was developed by Dr.Kaplan and Dr.Norton in 1992 after series of research or examination of the
successful business around the world. Balanced scorecard plays a major role in
the performance management systems in any particular organisation by analysing different four perspective in
any given organisation.
Norton and Kaplan identified four main icon in the balanced scorecard
for the any particular organisation to analyse their current performance and
ultimately predict the future or the direction of the organisation with the first
published article by Harvard university with 4 business perspectives
Fig. 1.1 The Balance scorecard model by Norton and
The balanced scorecards above depict various essential
element that whoever who is encounters in decision making process must adhere
to, by setting goals in each perspective and set up the measure for instance in
the financial perspective one of the overall question decision maker has to
take into account it so to ask themselves how should we appear into our
shareholders mind, by setting goals on profit, growth of the organisation and profitability
and set up measures such as checking cash flow(in and out), market share and
return on equity.
PERFORMANCE MANAGEMENT MODEL
and Spa2018 discuss
that the meaning of operation performance management as the process by which
the organisation link or integrate between the plan that are strategic and
organisation practise/operation. According to these author the operation performance
management serve as a system that replace the traditional organisation way of practice
such as top down techniques in which
information flow from the high management to the rest of the
organisation with less integration in departments
or between people.
M.Bourne and P.Bourne(2011) discuss that majority of the business operation
culture is based on the ‘tick box practice’
when engaging in performance management process. Operation performance
management should have a number of people equipped with necessary skills and knowledge
to the run the organisational, the system should touch every staff and by the
way the of the integration the system
into the organisation without leading into the wrong direction of the
The salient features when organisation performance management
is put in place in any organisation it must includes expenditure control and efficiency
gain, results based management, improve performance and competitiveness, accountability, good governance,
stakeholder involvement and communication, effectiveness and success. All these
features are to ensure that the organisation run smooth in all internal affair
that is within the organisation departments relationship a and external affairs
such as government affairs and shareholders
affairs. On the words the operation
performance management will assist the relevant managers in the organisation
with overview of their current performance/trend and be able to predict the direction
of the organisation by making correct decision.
CONTRIBUTION OF THE
BALANCED SCORECARD (BSC) IN THE ORGANASTION PERFOMANCE MANAGMENT(OPM)
The balanced score provide an opportunity to bring together differences
view for managers into the internal objectives of the company. It provides broad
view of the company long term strategies and the company directions in general.
As a result it provide them with ability to transform these understandings into
the high level of commitment during the company operation
It serve as the way to signal to every employee or individual
within the organisational and stakeholder about what the company is trying to
achieve by weighting the current
objective versus the performance .
According various writers it said that it is essential that
in organisational operation performance adhere with the strategies that are achievable
and can be implemented and measure during organisation growth from time to
time. With the balanced scorecard the decision maker at all level are guided
with for strategies S.Kaplan and P.Norton( 1993).
a) translating the vision that is to say that the organisation
is provided itself with opportunity to clarify the vision and put itself in
position that there is agreed comments by the group as whole. This enable the effectives
operation performance management since that from the top level management to
the lower level everyone is aware of the company vision
b)Communicating and linking different departmental/individuals
by ensuring that education is well provided, clear goal setting and linking
rewards based on the performance of the individuals .
c)Business planning and let the members must be aware about
the current plan and future plan. The balanced scorecard provide the light by
which the organisation can set goals/target target, initiatives, allocating
resources and out clear established milestone.
d) Feedback and learning within the organisation, the
balanced scored card bring together the share vision , feedback and provide the
firms with opportunity to review their result and learn.
Fig.1.2. The figure above Depict the 4 strategic managing processes that can be implemented in operation
performance management system, originally suggested by S.Kaplan and P.Norton
The balanced scorecard has assisted into the overall linkage
in between financial perceptive and non financial perceptive especially towards
improving the organisation performance management in the developing economic
sector such as in countries like Russia, Brazil India, and China. It is important
to make utilise of the use of balanced scorecard for better result of the
operation performance management system, as the study show that in America
alone more than 60% of the companies have used the balanced scorecard R.K.
Tyagi and P.Gupta,2008.
It is expected that the top decision maker to utilise the use
of balance scorecard components in order to gain the efficiency in organisation performance management.
As discussed, the balanced scorecard has assist the firm to visualize the their
organisation performance management not only from the provider side but also
from the customer perspective as discussed by aligning the organisation
objectives and corporate objectives and strategies
Rajesh K.T and Praveen G.(2008) A complete and
Balanced Service Scorecard. Upper Saddle River, New Jersey.
Luca Q. ( 2010) Performance Measurement.(online) Available:
https://link.springer.com/content/pdf/10.1007%2F978-3-642-13235-3.pdf ( Accessed
24 December 2017).
P.Bourne (2011) Corporate Performance Management. (online) Available: https://www.dawsonera.com/readonline/9781119953470/startPage/17/1
(Accessed 26 December 2017).
Udine, U. and
Spa, S. (2018). Performance Measurement | SpringerLink. online
Link.springer.com. Available at:
13 Jan. 2018.
Steve C. and
Scott R.2008 100 Ways to Motivate Yourself
Ghaziabad, India: Clear Book Publication