Balanced Scorecard Step by Step: Maximizing Performance and Maintaining Results

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Financial Measurement and Its Limitations

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(??Kaplan R.,2002,Building Strategy Focused
Organizations with Balanced Scorecard , Balanced
Scorecard Collabarative, p.7. )
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(??Niven P., Balanced Scorecard Step-by-step,
John Wiley Sons, 2002, p9.)
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?????Balanced Scorecard (BSC)

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Management translates its strategy into
performance measures that employees understand
and accept.
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BSC????
????Kaplan, R. S., and Norton, D. P. (1996). The
Balanced scorecard translating strategy into
action. Boston Harvard Business School Press.
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BSC??

• Survey 50 percent of Fortune 1000 has a
  performance management system (BSC)
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BSC???
Measurement System
Strategic Management System
Communication Tool
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BSC as a Measurement System

• Making strategy work perspective
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BSC???????

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BSC??????

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• before less than 50 understand the strategy
• after the number risen to 87

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Organizational Structure, Market Competition
and Balanced Scorecard Usage Impact on
organizational performance
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Introduction

• Balanced Scorecard Adoption
• Renaissance Worldwide, Inc. 60 of Fortune 1000
  companies have or are experimenting with BSC
  (Silk, 1998)
• Business Intelligence (A UK consulting company)
  57 of organizations surveyed had adopted BSC and
  56 of current non-users planned to adopt BSC

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Balanced Scorecard Adoption

• Speckbacher et al. (2003) 39 of the samples
  have at least adopted the first step of the BSC.
  by replied 187 samples of public firms in
  Germany, Austria and Switzerland
• The investigation of Ernst Young Taiwan 44
  of the listed companies in Taiwan have introduced
  or are in the process to introduce the BSC.

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BSC Effectiveness in Taiwan

• BSC has achieved better results in both profit
  organizations (e.g., banks, semiconductor
  companies) and nonprofit organizations (e.g.,
  hospitals).

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Motivation

• The percentage of enterprises in the newly
  industrialized economies to introduce the BSC is
  much lower than that in European and American
  countries.
• This paper investigates the listed companies of
  Taiwan and investigates the impact of the
  organizational structure and external competition
  onto the BSC usage.
• The impact of the interaction of organizational
  structure and external competition the BSC
  usage on firm performance.

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Motivation

• The contingency theory the organizational
  structure is the contextual variable.
• Organizational structures will result in the
  differences of MCS design and usage in
  organizations (Chenhall, 2003 Chia, 1995 Gordon
  Narayanan, 1984)

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Motivation

• The market competition is also an important
  variable (Hoque et al., 2001 Khandwalla, 1972
  Mia Clarke, 1999)
• Market competition will affect the design and
  usage of the performance evaluation system and
  management control system in organizations
  (Khandwalla, 1972 Lynch Cross, 1991 Otley,
  1980 Chapman, 1997 ).

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Framework
Organizational structure
H1
BSC Usage
Market competition
H2
H3H4
Performance
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Research and survey design

• Survey targets listed companies on the Taiwan
  Stock Exchange
• Large firms
• Larger firms more focused on performance
  measurement system
• 667 firms
• Mailed to executive financial officer
• After follow-up mailings and phone calls, 168
  valid responses (25.19) are received

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Characteristics of Respondent Companies
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Control variables

• Organizational size
• High-tech vs. non high-tech

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Empirical Results

• Utilized a factor analysis with varimax rotation
• Items with loadings greater than 0.5 are
  remained
• One item in the construct of organizational
  structure four items in BSC usage construct
  with loadings less than 0.5 were eliminated.
• Good internal reliability of the factor
• Cronbachs a of each common factor with greater
  than 0.7

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Organizational Structure and BSC

• The more an organization tends to be an organic
  setting, the higher usage level of the Balanced
  Scorecard.
• Hypothesis H1 are supported.

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The stage of BSC development tests
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Limitations and directions for future research
suggestion

• Cannot obtain actual cause effect connections,
  actual connection between strategies measures
• Suggest
• the subsequent research should be performed to
  study the usage of the BSC from the viewpoint of
  the internal external characteristics of the
  organization.

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• QA