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Use of Balanced Scorecard in Small Business Organizations


http://proquest.umi.com/pqdweb?sid=1&vinst=PROD&fmt=6&startpage=-1&clientid=29440&vname=PQD&RQT=309&did=10508873&scaling=FULL&vtype=PQD&rqt=309&TS=1226803924&clientId=29440 BSI (2007) Balance Scorecard Example for the regional Airline. Balanced Scorecard Institute. Retrieved May 17, 2010, from http://www.balancedscorecard.org/Portals/0/PDF/Regional_Airline.pdf Kaplan, R.S. & Norton, D.P. (2006). How to implement a new strategy without disrupting your organization. Retrieved May 17, 2010, from http://search.ebscohost.com/login.aspx?direct=true&db=bsh&AN=19707492&site=ehost-live The case for this PAPER involves putting together all you have learned about setting objectives for each of the four perspectives, establishing measures and targets for them, and identifying action plans that might put them into effect. As we noted in the introduction to this module, the trick in putting things together under the balanced scorecard involves creating “causal chains” linking together the objectives in such a way that achieving one objective makes it possible to achieve another in sequence. Thus, when we have a series of objectives defined for each of the perspectives, we should be able to start with actions to achieve objectives in the learning and growth domain and ultimately achieve objectives in the financial return/effectiveness domain. Our case here gives you an opportunity to put together such causal chains and see how they might work. But let’s start with some practical advice. Here’s a review of a recent book by Kaplan and Norton, the gurus of the balanced scorecard, that discusses implementation strategies. While the review is interesting in its own right, even more interesting is the wide variety of reactions to it from readers that follow the review; read through them quickly to get a sense of the diversity of opinions surrounding this topic. Silverthorne, S. (2008). Executing Strategy with the Balanced Scorecard. Retrieved May 17, 2010, from http://blogs.bnet.com/harvard/?p=397&tag=nl.e713 Armed with your new sensitivity to implementation, you’re now better equipped to look at an example. A few years ago, the journal Strategic Finance published a very interesting case describing the implementation of a balanced scorecard approach in a bank: Albright, T.; Davis, S.; & Hibbets, A. (2001, October). Tri-Cities Community Bank: A Balanced Scorecard Case. Strategic Finance, 83(4), 54-60.Retrieved May 17, 2010, from http://proquest.umi.com/pqdweb?sid=1&vinst=PROD&fmt=6&startpage=-1&clientid=29440&vname=PQD&RQT=309&did=83040028&scaling=FULL&vtype=PQD&rqt=309&TS=1226794941&clientId=29440 Basically, you are to carry out the case analysis described in the article, with some slight modifications to the questions posed in the article, as follows. Your complete analysis should involve 4-5 pages, responding to the numbered points below. Assignment Expectations: What’s referred to as “Case A” in the article tracks the initial implementation of the balanced scorecard through the establishment of the first set of objectives for each of the perspectives. As you’ll see, Table 2 in the article (p. 57) presents a list of performance measures suggested by bank personnel as intermediaries toward the achievement of the three main financial goals: loan balances, deposit balances, and non-interest income. • The first step is to categorize each of the performance measures in Table 2 as belonging to one of the four perspectives (to start you off, we’ve put the three financial goals in the table already). Here’s a table that you can copy and paste into your paper that might be helpful toward this end: Learning/Growth Internal Business Processes Customer Service Financial loan balances deposit balances non-interest income • Then, following the procedure described in Figure 1 of the article (p. 58), you are to connect these objectives and measures into two or more causal chains, indicating how the achievement of one


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