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The Balanced Scorecard (BSC) approach is a method widely utilised in various organisational settings. Introduced by Robert S. Kaplan and David P. Norton in 1992, Rohm & Halbach (2005) states that “developing and implementing a balanced scorecard system is more about changing hearts and minds and sustaining new directions, rather than is about selecting key performance measures and buying and putting in operation Balanced Scorecard software with an intelligent reporting analysis tool”. The Balanced Scorecard is an all-round performance evaluation system, and is one of the emerging tools of strategic management (Pineno, 2002). It is often viewed as an attempt to

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translate strategy into action and it proposes measuring enterprise performance under four different perspectives, as shown in figure 3:1.

Figure 3:1. Balanced Scorecard Perspectives (Kaplan & Norton, 1992)

The Financial Perspective links the financial objectives of the corporate strategy of an organisation. It focuses on profitability related measures such as return on capital, return on equity, return on sales etc. (Kaplan & Norton, 1992). These figures are provided by the accounting department of the organisation, based on the accounting standards. The Customer Perspective examines aspects related to customers’ perceptions, that is, how an organisation’s mission and strategy is translated into specific objectives about targeted customers and market segments. These core measures include measures such as customer complaints, customer satisfaction, delivery time, and the measurements are derived from customer surveys (Kaplan, 1997)

The Innovation and Learning Perspective on the Balanced Scorecard expands objectives and measures related to organisational learning and growth with respect to employees, systems and organisational alignment.

The Internal Business Perspective focuses on all actions and key processes necessary for delivering the value expected by the customers in a productive and efficient way and in doing so to prioritise research, design and development processes and examine important operations process measures such as cost, quality, time, and performance characteristics.

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The BSC is also used as a communication tool between the management of an organisation connecting strategy and performance for the organisational stakeholders as described below by Atkinson & Epstein (2000):

“as managers learn to manage with a dashboard of new dials, they will align themselves, and their organisations, behind their organisation–wide strategies with a precision they have never before experienced. They will position themselves to generate the profitability and demonstrate the accountability demanded by customers, shareholders, employees, and the communities around them”

Neely et al. (2001) state that the crucial factor for an efficient BSC implementation is based on the way it integrates different classes of organisational performance – financial and non-financial, internal and external.

Rohm & Halbach (2005) suggest the following nine steps, as shown in figure 3:2 for building and implementing a Balanced Scorecard approach.

“An assessment of the organisation’s foundations.

Development of overall business strategy. The strategic objectives of the organisation are defined by the management team with main focus on customer needs and expectations;

Decomposition of business strategy into smaller components. Based on the previous steps the strategic objectives are categorised following criteria of importance and strategic themes;

Development of a Strategic Map of the organisation. This map is formalised the sources and outcomes of the strategic objectives showing how the organisation will achieve its targets;

New initiatives are identified. The Strategic Map is used for establishing the derived key performance measures and their target levels;

Automating with analysing software the Balanced Scorecard. It follows the implementation process of an intelligent reporting tool with the aim to get accurate results in proper time;

Cascading the corporate scorecard throughout the organisation. The overall balanced scorecard is distributed into the different business units of the organisation;

Figure 3:2. The Balanced Scorecard Institute’s 9 step framework (Rohm &

Hudson et al. (2001) outlined that

levelstaff, strategic scorecard and operational level measures making the development

“performance measures of the balanced scorecard approach must be complete, measurable, and controllable

link to employee’s daily operations (Inamdar, et al., 2000). balanced scorecard regarding that

competitors are ignored or that environmental and community or social issues are absent”.

3.4.2 European Foundation for Quality Management (EFQM) Excellence Model®

The European Foundation for Quality Management Model (EFQM) is widely recognised as a wide

used to assess strengths and actions. The EFQM model

performance management (Wongrassamee et al., 2003), 2006), as a support framework

integrated system (Davies, 2008), and

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The Balanced Scorecard Institute’s 9 step framework (Rohm & Halbach, 2005)

Hudson et al. (2001) outlined that “there is the lack of integration between the

, strategic scorecard and operational level measures with the line managers development of strategy problematic”. Atkinson & Epstein (2000) note performance measures of the balanced scorecard approach must be complete, measurable, and controllable”. If any of these criteria is absent, the measures will not link to employee’s daily operations (Inamdar, et al., 2000). Bourne (2002) criticisms balanced scorecard regarding that “people and suppliers are excluded and regulators and competitors are ignored or that environmental and community or social issues are

.2 European Foundation for Quality Management (EFQM) Excellence Model®

European Foundation for Quality Management Model (EFQM) is widely wide-ranging organisational development and improvement framework assess strengths and weakness areas across the organis

. The EFQM model has been used in different purposes as performance management (Wongrassamee et al., 2003), as a self-

a support framework for a teamwork development (Castka et al., 2003), (Davies, 2008), and for analysing benchmarking (Castka et al., 2004).

The Balanced Scorecard Institute’s 9 step framework (Rohm &

there is the lack of integration between the director with the line managers . Atkinson & Epstein (2000) note that performance measures of the balanced scorecard approach must be complete, If any of these criteria is absent, the measures will not Bourne (2002) criticisms people and suppliers are excluded and regulators and competitors are ignored or that environmental and community or social issues are

.2 European Foundation for Quality Management (EFQM) Excellence Model®

European Foundation for Quality Management Model (EFQM) is widely ational development and improvement framework sation’s processes and different purposes as a tool for efficient -assessment tool (Tari, teamwork development (Castka et al., 2003), as an benchmarking (Castka et al., 2004).

Among them, self-assessment is considered as one of the most interesting topics for both researchers and companies implementing the EFQM model (Hillman, 1994; Samuelsson & Nilsson, 2002;

following in the implementation process of objective, overall assessment of

Crumley, 1997). The EFQM model covers all m

process, and output (Black & Crumley, 1997; Seghezzi, 2001). The EFQM model is to support organi

continuous improvement and deployment of processes (And The model is divided into two areas, five

criterion weights for each element if an organi shown figure 3:3.

Figure 3:3

The eight fundamental

electrons orbiting around a nucleus with RADAR.

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assessment is considered as one of the most interesting topics for both researchers and companies implementing the EFQM model (Hillman, 1994; Samuelsson & Nilsson, 2002; Black & Crumley, 1997). A self

following in the implementation process of the EFQM Excellence Model provides an assessment of an organisation’s areas of development

Crumley, 1997). The EFQM model covers all management activities composed of input, process, and output (Black & Crumley, 1997; Seghezzi, 2001). The

EFQM model is to support organisations to accomplish business excellence through continuous improvement and deployment of processes (Andersen et al., 2003).

The model is divided into two areas, five “enablers” and four “results criterion weights for each element if an organisation wants to achieve

3. The EFQM Excellence Model 2010 (Gemoets, 2010)

fundamental concepts of this model as shown figure 3:4 electrons orbiting around a nucleus with RADAR.

assessment is considered as one of the most interesting topics for both researchers and companies implementing the EFQM model (Hillman, 1994; self-assessment process the EFQM Excellence Model provides an development (Black & anagement activities composed of input, process, and output (Black & Crumley, 1997; Seghezzi, 2001). The purpose of the business excellence through

ersen et al., 2003).

results” with a specific ation wants to achieve “Excellence” as

10 (Gemoets, 2010)

Figure

Questionnaires based upon the Model and

organisation on how the nine criteria are being met. O exercises have been initiated, the organi

performance.

One of the major disadvantages identifying problems that Svensson & Klefsjo (2006) maturity level, it is most likely

assessment project”. Hides et al. (2004) time for developing business performance on the other hand, Karapetrovic &

assessment approach to the level of maturity of an effort invested in the self

existing process of the EFQM model h and practitioners as a self

organisations have faced several too generally defined

a system to assess itself using improvement issues”

depended upon good data collection

“the reliability and completeness of the collected data as a possible downside for self assessments”. Self-assessment process is a complicated process

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Figure 3:4. Fundamental Concepts (Gemoets, 2010)

Questionnaires based upon the Model and workshop approach can be used across the ation on how the nine criteria are being met. Once these

exercises have been initiated, the organisation can take action to improve its

disadvantages of the EFQM model is that there is missing methods identifying problems that effect from organisational weaknesses (Rusjan, 2005). Svensson & Klefsjo (2006) state that “if the company has not

most likely a waste of resources to develop

. Hides et al. (2004) warn that “the EFQM Excellence Model business performance makes it inappropriate

Karapetrovic & Willborn (2001) “connect the assessment approach to the level of maturity of an organisation effort invested in the self-assessment”. Li & Yang (2003) state that

of the EFQM model has been extensively accepted by both academics actitioners as a self-assessment approach, many researchers

faced several issues applying the model as the too generally defined”. Black & Crumley (1997) state that “if an organi

to assess itself using this model, it will necessarily create ”. Hides et al. (2004) claim that “the self-

upon good data collection” and Karapetrovic & Willborn (2001) highlight the reliability and completeness of the collected data as a possible downside for self

assessment process is a complicated process with necessary support

Fundamental Concepts (Gemoets, 2010)

workshop approach can be used across the nce these self-assessment ation can take action to improve its

model is that there is missing methods for ational weaknesses (Rusjan, 2005). has not achieved the required a comprehensive self- the EFQM Excellence Model needs

for immediate results”, the selection of the self- organisation and the intensity of . Li & Yang (2003) state that “although the accepted by both academics many researchers established that the methods criteria are if an organisation develops create a broad range of assessment process is and Karapetrovic & Willborn (2001) highlight the reliability and completeness of the collected data as a possible downside for self-

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of external consultants for accurate results helping to identify its strong areas as well as areas for improvement.