Get help now
  • Pages 12
  • Words 2769
  • Views 289
  • Download


    Verified writer
    • rating star
    • rating star
    • rating star
    • rating star
    • rating star
    • 5/5
    Delivery result 2 hours
    Customers reviews 234
    Hire Writer
    +123 relevant experts are online

    Related Topics

    Using the balanced scorecard for companies in Malaysia Essay

    Academic anxiety?

    Get original paper in 3 hours and nail the task

    Get help now

    124 experts online

    Historical context

    Historically, fiscal steps such as net incomes per portion ( EPS ) , return on assets ( ROA ) , return on investings ( ROI ) , and many others were used in legion administrations as their public presentation measuring system. However, these fiscal steps have been criticised as it is said that it merely reflects the past information, encourages short-termism and may actuate use of consequences. Besides that, fiscal steps besides do non take into history the other critical countries such as quality, flexibleness and other countries that the company needs to stand out in order to last in the current competitory market.

    In recent old ages, many direction models have been introduced such as Lynch and Cross ( 1991 ) “ public presentation pyramid ” , Fitzgerald & A ; Moon ( 1996 ) “ edifice blocks of public presentation measuring system ” ; Neely et al. , ( 2002 ) “ public presentation prism ” ; Kaplan and Norton ‘s ( 1992 ) “ balanced scorecard ” model ; , “ six sigma ” and “ value for money ” the to hold a wider position on the company ‘s demands to vie in the market.

    Balanced Scorecard ( afterlife known as BSC ) is a model that has been introduced to get the better of the failings of the traditional public presentation measuring systems. The BSC was created in 1987 at Analog Devices ( Schneiderman, 1999 ) . BSC became a popular strategic direction tool after a work by Robert S. Kaplan & A ; David P. Norton was published in the Harvard Business Review paper in 1992.

    Kaplan and Norton ( 2001 ) states that the BSC reflects the alterations in engineering and competitory advantage in the twentieth century where intangible assets became more of import as it became the major beginning of competitory advantage of the company. Harmonizing to the Business Dictionary ( online ) intangible assets are long term resources of an administration but they have no physical being. This includes trade name, rational capital such as cognition and cognize how, repute and client trueness. Directors would hold to larn on how to pull off these intangible assets which includes client relationship, employee preparation, high quality merchandises and many more. Therefore, it is critical that these intangible assets are measured as “ If you ca n’t mensurate it, you ca n’t pull off it ” – Peter Drucker.

    Activity-based costing ( ABC ) is said to be the original thought that led to the BSC model ( Johnson & A ; Kaplan, 1987 ; Kaplan & A ; Bruns, 1987 ) . ABC is a bing theoretical account that assigns cost to each of the activities in the administration. This theoretical account is based on a theory that activity consumes resources and therefore costs should be allocated to the activities based on the resources consumed.

    Harmonizing to Zelman et al. , ( 2003 ) , there has been an increasing tendency on the execution of the BSC as a public presentation measuring system. Examples of the adoptive parents of the balanced scorecard are KPMG Peat Marwick, Allstate Insurance, and AT & A ; T ( Chow et al. , 1997 ) . Harmonizing to The Advanced Performance Institute ( API ) , about half of major companies in the US, Europe and Asia are users of the BSC model. Harmonizing to Bain and Company, there were approximately 57 % of planetary companies that have already adopted the balance scorecard.


    Before looking in to the reappraisal of the BSC literature, it is of import to understand the term of balanced scorecard. “ Balanced ” is defined by The Free Dictionary ( online ) as to convey into or maintain in equal or fulfilling proportion or harmoniousness. Scorecard is a card which is normally used in games. It is used to enter the public presentation and advancement of the participants.

    BSC is a strategic direction tool which aims to interpret the administration ‘s vision and scheme into specific quantifiable aims that can be measured. The aims are measured utilizing these four positions which are the fiscal position, client position, larning and growing position and internal concern procedures perspective ( Kaplan and Norton, 1992 ) .

    Company ‘s ends are broken down into specific concern unit ‘s ends which are in line with the company ‘s overall scheme. Specific aims are so set for each of these position and steps for mensurating the accomplishment of these aims are so determined. These aims and steps have to be thought exhaustively to guarantee that neither country is overemphasised nor underemphasised.

    Fiscal steps are known as slowdown indexs as they represent historical public presentation while lead indexs are public presentation drivers ( Kaplan and Norton 1992, 1996 ) . Traditional public presentation measuring systems focuses entirely on fiscal steps and this deals merely with lag indexs that merely reflects the past and is besides non linked to the organizational scheme.

    A good balanced scorecard should incorporate a mix of slowdown indexs and lead indexs in the four positions. By including taking indexs into the company ‘s public presentation measuring system, it helps directors to get the better of the job of short-termism, forces them to believe about the hereafter and non merely concentrate on the past. Therefore, the BSC is a public presentation measuring system that balances between fiscal and non-financial steps every bit good as slowdowns and lead indexs.

    Fiscal Position

    This fiscal perspective trades with how the company expression to the stockholders ( Kaplan and Norton, 1992 ) . It emphasises more on stockholder ‘s satisfaction. The typical fiscal ends are the profitableness, gross, hard currency flows, return on assets, growing and maximizing stockholder ‘s value. Historically, public presentation measuring has been concentrating on these fiscal steps. However, in the current epoch, directors recognise that over concentrating on the fiscal steps is inappropriate as these fiscal steps reflect the yesteryear and non the hereafter. Exclusive trust on fiscal steps may actuate directors to do determinations that sacrifice long term value creative activity for the benefit of short term public presentation ( Porter, 1994 )

    Customer Perspective

    This perspective trades with how the clients see the company ( Kaplan and Norton, 1992 ) . Customer ‘s trueness and satisfaction is ever linked to the long term growing and endurance of the company. Belilos ( 1997 ) provinces that by looking at the company by a client ‘s point of position, it will put the class for a successful concern and it besides helps in the planning of the company.

    Measures selected for this position should mensurate the value delivered to the clients. Companies have to distinguish itself from rivals by guaranting that they meet client demands and demands. Quality, dependability and client service has to be good plenty to keep a good relationship with the clients. This will pull new clients and besides retain the old 1s.

    Learning and Growth Perspective

    Learning and growing position is about the capableness of the company to go on to turn, better and make value ( Kaplan and Norton, 1992 ) . Harmonizing to Herbold ( n.d. ) , companies that turn their old successes into bequest patterns that they follow repetitively are put on the lining themselves by seting the company in a really disadvantageous place. He besides said that companies need to constantly move, evolve, better and introduce. This is really true as promotion in engineerings have made client ‘s penchants change quickly. Products become disused really speedy. Customers are besides more cognizant of the picks they have and best merchandises in the market because of the handiness of information on the cyberspace.

    Therefore, in order to last in the intensely competitory market, companies have to constantly learn and better for growing and endurance.

    Internal Business Processes Perspective

    This looks into the country of internal concern procedures that the company must stand out at in order to last ( Kaplan and Norton, 1992 ) . Companies will hold to concentrate and stand out in the internal concern procedures that enable the company to run into the client ‘s demand. This includes making value adding merchandises, bettering resource use and plus direction.

    Cause and consequence relationship

    Kaplan and Norton ( 1996 ) claimed that there ‘s cause and consequence relationship between the measurings of the four positions in the balanced scorecard. Kaplan and Norton argued that acquisition, preparation and invention ( larning and growing positions ) lead to better internal concern procedures ( internal concern procedures positions ) as employees would be able to execute better in their occupation.

    By holding good internal concern procedures, the company would be able to run into their client ‘s demands and this will better client ‘s satisfaction and trueness ( client positions ) . Higher client ‘s satisfaction and trueness can assist better the company ‘s fiscal public presentation as a returning client is more likely ( fiscal positions ) . Therefore, Kaplan and Norton ( 1992 ) believe that if the positions in the scorecard are excelled at, the company would hold a better fiscal public presentation. However, there is non adequate grounds and research to claim this claim of causality.

    ( Kaplan & A ; Norton, 2004 ) came up with Strategy Maps: Converting Intangible Assetss into Tangible Outcomes to provides elaborate method on how to associate the scheme of the company with the aims. This scheme maps can be used to help directors and advisers to develop their ain BSC.


    The BSC has received many regards and besides unfavorable judgments. Many instance surveies have been done in this country which includes executions in private organisations ( Yang et al. , 2005 ) , major public corporations ( Niven, 2003 ) , authorities bureaus ( Kirby & A ; Smiesing, 2003 ) , and big transnational corporations ( Wonder, 2005 ) but there are merely a few researches done to measure the impact of the execution of BSC on the company ‘s public presentation.

    Ghosh and Mukherjee ( 2006 ) province that one of the troubles in the BSC measuring system is that there is no burdening given to the steps of the BSC. It is suggested that weights should be assigned to each steps depending on their importance to the administration. This is nevertheless, a complicated undertaking.


    The BSC is criticised by Atkinson et Al. ( 1997 ) , amongst others as they are in a position that the BSC does non adhere to the stakeholder attack to public presentation direction as it fails to take into history of the issues associating to employees and providers.

    There are besides concerns on the cost for the execution of such systems whether the benefit of execution of such system outweigh the cost of implementing it. There are besides inquiries on the prosperity of such execution to accomplishing the intended end.

    Besides that, BSC is viewed as non more than a public presentation measuring system. Some companies think that they are a strategy-focused administration by holding adopted the BSC model as their public presentation measuring system, developed their ends, aims and steps. Harmonizing to Kirby and Smiesing ( 2003 )

    . The Balanced

    Scorecard is a public presentation planning and measuring model, with

    similar rules as Management by Aims, which was publicized by

    Robert S. Kaplan and David P. Norton in the early 1990s.

    Implementing Balanced Scorecards typically includes four procedures:

    1. Translating the vision into operational ends ;

    2. Communicating the vision and associate it to single public presentation ;

    3. Business planning ;

    4. Feedback and acquisition, and seting the scheme consequently.

    Research Methodology

    The research methodological analysis used and chosen is selected based on the purposes and aims of this survey. The choice of the appropriate research methodological analysis is important to guarantee that purposes are achieved and the right line of research is pursued.

    Beginnings of informations

    The beginnings of informations can be loosely categorised into two classs viz. primary beginning informations and secondary beginning informations. Primary information is the informations collected first-hand whereas the secondary information is the informations taken from other parties. The informations used for this survey would be a combination of both beginnings.

    Primary beginning informations will be informations collected from the questionnaire sent to the companies sing the acceptance of the balanced scorecard. Secondary informations used in this survey will be the fiscal consequences of the company published on the cyberspace.

    Types of informations

    There are two chief types of informations which are quantitative informations and qualitative informations. Quantitative informations are the informations that is in numerical signifier whereas qualitative informations are the informations that are non numerical and expressed in other signifier. For the intent of this survey, quantitative informations would be more to a great extent employed in the analysis of this survey.

    Standards for choice of the companies

    Samples would be non-random samples as companies that have adopted balanced scorecard would be selected from list of balanced scorecard adoptive parents prepared by the Balanced Scorecard Institute. Companies which have non adopted the balanced scorecard model would be selected based on their similar sizes and industry with the adoptive parents from the list.

    There will be forty to fifty United States companies selected for the intent of this survey. These companies will be from a few different industries.

    Standards and analysis process of informations

    The process and methodological analysis for this survey will be largely based on the theoretical account specification from Lee ( 1987 ) , Hashim M.K ( 2000 ) and Mok ( 2009 ) .

    The old research reviews suggest that it is non possible to take a individual public presentation steps that is every bit appropriate for all concern houses. Based on the literature, this survey concludes that in order to depict SMEs public presentation more to the full, combination or multiple steps are needed so that they are able to supply more unequivocal reply on how expeditiously and efficaciously SMEs is being managed.

    In this survey, public presentation is the dependent variable that is presented in the theoretical model. This survey measures concern composite public presentation index ( BPCI ) as the public presentation steps as in Lee ( 1987 ) ‘s and Mok ( 2000 ) ‘s survey. Gross saless, assets, gross net income, employment, equity, return on gross revenues ( ROS ) , return on investing ( ROI ) , return on plus ( ROA ) are used to measure the SMEs ‘ public presentation. The BPCI is developed from the average values of ROS, ROI and ROA ( BPCI = ROS + ROI + ROA/3 ) . Data for this step was collected for the old ages 2005 to 2009.

    Statistical methods used

    This survey used statistical methods to prove the hypotheses of the research theoretical account. The hypotheses were tested utilizing the multiple arrested development analysis. The multiple arrested development is used to prove hypothesis 1, 2 and 3. Furthermore, the multiple arrested development is used to prove the important average differences between the SMEs finance and its consequence on house concern public presentation.

    Research inquiries

    The research inquiries are as follows:

    Is there a relationship between the acceptance of balanced scorecard model and the fiscal public presentation of the companies?

    Make companies which have adopted the balanced scorecard perform better in footings of fiscal public presentation than the companies that have non adopted the balanced scorecard by industry?

    In the literature on marketing research the term success has many different readings. In the simplest definition success is tantamount to continued concern operations and the antonym, failure, means traveling out of concern. ( Simpson et al. , 2004. ) Traditionally the construct of success is defined in footings of fiscal public presentation, such as growing, net income, turnover or return of investing, or figure of employees ( see Walker and Brown, 2004 ; Simpson et al. , 2004 ; Paige and Littrell, 2002 ; Greenbank,2001 ) .

    Fiscal facets of the constructs of success are compiled as below:


    Fiscal steps E.g. growing, net income, turnover, ROI, addition in employees

    Restrictions of methodological analysis proposed

    There are a few restrictions of the methodological analysis proposed which includes:

    There are many companies that are utilizing balanced scorecard but the sample size of this survey will merely be a little part of the whole figure.

    Samples are non strictly random samples as they are from a list published by the Balanced Scorecard Institute.

    This survey is besides limited by its remarkable focal point on balanced scorecard as the lone independent variable and fiscal public presentation as the result variable. There are really many other factors act uponing the fiscal public presentation of a company. The acceptance of the balanced scorecard is non the lone factor that can act upon the fiscal public presentation of a company.

    Research Ethical motives

    Ethical motives is most normally defined as the values associating to human behaviors and regulations regulating it. Ethical motives trades with ‘right or incorrect ‘ . Research ethics is the application these regulations of behavior to a research. Ethical motives are taken into history in this research to guarantee that every person are respected and there is no misconduct.

    Structure of the Study

    Chapter 1 – Introduction

    This chapter is the debut of the survey. This includes background of the public presentation measuring system in companies, purpose, aims, principle and restrictions of this survey.

    Chapter 2 – Literature reappraisal

    This chapter paperss the reappraisal of theoretical and empirical literature of the balanced scorecard and its consequence on the company ‘s public presentation in footings of fiscal public presentation.

    Chapter 3 – Methodology

    This chapter describes the research method and survey design utilised in this thesis. This includes the trying method chosen, informations aggregation method used, informations analysis method used and the restrictions of the research method chosen.

    Chapter 4 – Analysis and reading

    This chapter elaborates the manner used to analyze the informations, treatment of the consequences and deductions of the survey.

    Chapter 5 – Decision

    This chapter summarizes the findings of the survey with recommendations for future surveies.

    This essay was written by a fellow student. You may use it as a guide or sample for writing your own paper, but remember to cite it correctly. Don’t submit it as your own as it will be considered plagiarism.

    Need custom essay sample written special for your assignment?

    Choose skilled expert on your subject and get original paper with free plagiarism report

    Order custom paper Without paying upfront

    Using the balanced scorecard for companies in Malaysia Essay. (2018, Oct 20). Retrieved from

    Hi, my name is Amy 👋

    In case you can't find a relevant example, our professional writers are ready to help you write a unique paper. Just talk to our smart assistant Amy and she'll connect you with the best match.

    Get help with your paper
    We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy