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In reality, this description hardly scratches the surface of the concept. Kaplan and
Norton themselves state that:
The Balanced Scorecard translates an organisations mission and strategy into a comprehensive
set of performance measures and provides the framework for strategic measurement and
management (Kaplan and Norton, 1996b).
This simple overview is accurate, but does not quantify fully the radical approach
that the BSC provides. The BSC defines and assesses the critical success factors
(CSFs) considered necessary to fulfil the corporate goal(s) to ensure future
success. This is achieved by close scrutiny and subsequent understanding of
cause and effect relationships. Now the concept becomes both complex and
innovative. The BSC divides the business environment into four key business
areas, see Figure 1. Additional areas can be included if considered applicable and
necessary. For the purpose of illustration, The Performance Measurement Action
Team, a US governmental body formed to consider government-wide
procurement practices, successfully identified and included employee
empowerment as an additional BSC focus (Kaplan and Norton, 1996b).
Journal of Management
Development, Vol. 17 No. 8, 1998,
pp. 559-563, MCB University
Press, 0262-1711
Journal of
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Development
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Figure 1.
The balanced scorecard
key perspectives
Financial
Customer
management culture, the concept has not yet been reported on or documented
as being an unqualified success within the UK. Speculation might identify a
number of possible reasons why it has not yet been adopted in the UK, but such
conjecture could serve little purpose. The utility of the BSC within the British
hospitality industry has been considered, the hotel sector being the specific
focus (Brander Brown and McDonnell, 1995). They identified that the BSC
emphasised vision, and the need to keep the organisation moving and looking
forward, rather than focusing purely on control measures. They concurred that
this approach could assist management in understanding the many interrelationships within their organisation and it could offer a balance between the
external and internal measures by identifying the effects of trade-offs between
them. Their comments appear consistent with Kaplan and Nortons claims and
reported examples. By utilising a pilot study they developed a BSC for a real
operation, however, this highlighted a number of weaknesses that were hotel
industry specific. It was suggested that further research would be necessary in
the areas of:
common goals, CSFs and performance measurements for the UK hotel
industry;
the use of BSCs at hotel company level and the employment of differing
BSCs at all management levels within a hotel;
the identification of effective performance measures for CSFs such as
marketing, guest satisfaction and employee morale.
It is in these soft areas that the concept tends to come a little unstuck. The
application of values to such issues as service quality and guest satisfaction is
both subjective and perceived as complicated. This said, their consideration of
the concept appeared favourable, but remained inconclusive without the
support of further research. To date, the only evidence of the BSC being
employed in the UK has been within The British Army, specifically the Food
Services branch of The Royal Logistic Corps. The authors BSc (Hons)
dissertation recommended the concept as a management tool that was suited
well to the evolving food services environment (Hepworth, 1997). The concept is
now in the initial implementation stage but offers significant research potential.
Lopes did consider the BSC as one of three real estate management devices
within his PhD research at the University of Reading, however, no evidence to
support its physical application was offered (Lopes, 1996). Corrigan also offered
the BSC a favourable review from an accountancy perspective in Australia, but
again, no evidence to support its employment has been evident (Corrigan 1995).
A question of theory and application
The BSC has been applied successfully across many diverse industries and
within the public sector in the USA. The public sector applicability of the
concept has been discussed (Tonge, 1996) and numerous examples of successful
public sector applications have been documented. These were all reported in a
positive manner, no failures of the concept were identified, but many pitfalls and
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