International Journal of Advances in Engineering and Management (IJAEM)

Volume 6, Issue 01 Jan 2024, pp: 574-578 www.ijaem.net ISSN: 2395-5252

Implementation of Balance Scorecard: A

Literature Review
Ms. Ch. V N L Krishna Sahithi, Dr. R S Ch Murthy
Chodisetty
Student of MBA (22881E0014), Department of Management studies., Vardhaman College of Engineering,
Shamshabad, Hyderabad. Telangana
Associate Professor, Department of Management studies, Vardhaman College of Engineering, Shamshabad,
Hyderabad. Telangana

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Date of Submission: 25-01-2024 Date of Acceptance: 03-02-2024
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ABSTRACT: the balanced scorecard serves as a bridge between
The balanced scorecard involves measuring four an organization’s strategic objectives and day to
main aspects of a business: Learning and growth, day activities that drive success. By aligning key
business processes, customers, and finance. BSCs performance indicators (KPIs) across various
allow companies to pool information in a single perspectives, it facilitates a strategic dialogue
report, to provide information into service and within the organization and ensures that every level
quality in addition to financial performance, and to is contributing to the realization of overachieving
help improve efficiencies.A strategic planning goals. This introduction sets the groundwork for a
framework that companies use to assign priority to deeper exploration of how the balanced scorecard
their products, projects, and services; communicate has become instrumental in fostering strategic
about their targets; and plan their routine clarity, improving decision-making, and enhancing
activities.A balanced scorecard is a strategic overall organizational performance.
planning framework that companies use to assign
priority to their products, projects, and services; II. LITERATURE REVIEW
communicate about their targets or goals; and plan  Research on application of balanced scorecard
their routine activities. The scorecard enables in Small Medium Enterprise (SME) has failed
companies to monitor and measure the success of and there is a research gap in implementation
their strategies to determine how well they have of Balance scorecard.(Rompho, 2011)
performed.  This paper aims to talk about the strategy
Keywords:Balance Scorecard; Performance known as “The balanced scorecard”. It will
Management Systems; Strategic Management; discuss why balanced scorecard systems are
Management Control System; Strategic alignment. becoming more important, investigate the
challenges organizations encounter when
I. INTRODUCTION: creating and using these systems, and share
The balanced scorecard emerges as a lessons from Australian organizations that
dynamic and versatile strategic management tool have used the balanced scorecard. Challenges
designed to help organizations navigate the related to understanding, commitment,
complex landscape of performance measurement customer focus, accountability, culture change
and strategic execution. Originating from the and adaptability. (Chavan, 2009)
seminal work of Robert S. Kaplan and David P.  This study concludes that accounting research
Norton in the early 1990s, the balanced scorecard should focus on how accounting is used in
has evolved into a widely adopted framework that today’s business and aim to make practical
goes beyond the traditional emphasis on financial improvements.(Nørreklit et al., 2012)
metrics. Its distinctive feature lies in the integration  In this paper the researchers aim to find and
of multiple perspectives, including financial, examine the benefits and positive impacts that
customer, internal processes, and learning and come from using the balance
growth, providing a comprehensive view of an scorecard.(Surgonda Patil Assistant
organization’s health and performance.In essence Professor, 2019)
DOI: 10.35629/5252-0601574578 |Impact Factorvalue 6.18| ISO 9001: 2008 Certified Journal Page 574
 International Journal of Advances in Engineering and Management (IJAEM)
Volume 6, Issue 01 Jan 2024, pp: 574-578 www.ijaem.net ISSN: 2395-5252

 This paper talks about the balanced scorecard, successfully completed projects related to
which gained a lot of attention from building design and electromechanical studies
researchers and businesspeople since it was that had been ongoing for nearly a decade.
introduced. Many articles and events discuss (Koumpouros, 2013)
the BSC , but there’s not much research on  This paper aims on studying the application of
how its used in the hospitality and tourism balanced scorecard in higher education. In
industry. The paper concludes that there’s not recent years, educational institutions have
much research on how balanced scorecard used adopted various methods from commercial
in the hospitality and tourism industry.(Fatima organizations to enhance quality.(Fooladvand
& Elbanna, 2020) et al., 2015)
 This article talks about how the banking
(Charu N Thakur, Dr Nayantara Padhi ,2022): industry is constantly changing, not only in
This paper says that while the balanced India but globally. The way banks provide
scorecard is a flexible and useful system for services to customers and stakeholders are
measuring performance in telecom industry, it’s not crucial for their survival and growth. The
simple to introduce in any organization. Besides balanced scorecard is a specific collection of
careful planning there are many challenges during financial and non-financial measures derived
implementation that can cause the whole system to from an organization’s vision, mission and
fail. strategy. These chosen measures not only assist
This paper discusses that not all managers in conveying the results and
businesses using information and technology are performance indicators but also help
doing it well. Even when organizations have these communicate how the organization plan to
systems in place, they might not be very effective achieve its vision, mission and strategy to both
or efficient. This paper uses a strategic planning employees and stake holders. (Sharma, 2016)
model by (Ward and Peppard,) focusing on how  This paper aims to demonstrate how a
well the organization align its strategies and the performance management system called the
impact it has on staying competitive.(Setiawan & balanced scorecard can be applied to a
Yulianto, 2017) business college. The authors use their own
business college as an example to illustrate
(Dr. Prashant Surgonda Patil ,2019): what a successful balanced scorecard might
The researcher analysed how the balanced look like.(Papenhausen & Einstein, 2006)
scorecard is used as a tool for management control  This paper gives an overview of studies
in a medium scaled textile industry that contributes discussing the development of new ways to
to the organization. measure performance. The way we measure
This research states that balance scorecard performance has changed significantly over
is a performance measurement and strategic time. Accurate comparisons are possible only
management system which can be used by any when looking at similar
company whether it is small, medium or a large things.(MEASUREMENT OF
company. It has its significance for its ability to CORPORATE PERFORMANCE
integrate both financial and non-financial aspects of THROUGH BALANCED SCORECARD,
the company.(Giannopoulos et al., 2013) 2019)
 In this paper Kaplan gave his insights on the  This paper shares the findings of a study that
five papers of balanced scorecard about his aimed to investigate the performance impact of
papers published on balanced scorecard. In this balanced scorecard . The study used a quasi-
paper the author observes a tendency in experimental design for this purpose.(Neely,
academic discussions surrounding the balanced 2008)
scorecard to overlook its significance in the  (Manisha Choudhary ,2019):
implementation of strategic o This paper discusses the use of balanced
initiatives.(Kaplan, 2012) scorecard, which is a tool in strategic
 The main aim of this article is to find out the management to evaluate and enhance different
application of the balanced scorecard in a aspects of a business. It helps organizations
Greek public health sector. This result of this measure and give feedback on their
article shows that the outcomes of performance.
implementing the balanced scorecard are  This paper talks about the widespread of the
positive. The results show that the hospital balanced scorecard as a highly regarded tool

DOI: 10.35629/5252-0601574578 |Impact Factorvalue 6.18| ISO 9001: 2008 Certified Journal Page 575
 International Journal of Advances in Engineering and Management (IJAEM)
Volume 6, Issue 01 Jan 2024, pp: 574-578 www.ijaem.net ISSN: 2395-5252

for performance management by many  This paper discusses the strategic planning of
organizations globally. According to studies by the South African Revenue Service, which
Bernard marr and Dr. Elijah Ezendu, the shows similarities to the balanced scorecard
balanced scorecard consistently ranks among approach. The authors found that SARS
the top eight management tools strategic planning had showed that they are
worldwide.(Vandana & Sehgal, 2022) using the BSC approach even though the same
 This article emphasizes the crucial role of is not formally and explicitly acknowledged.
higher education in the progress of any (Kumar et al., 2023)
country. Currently, India s ranked third
globally in terms of providing higher education 3. Research Objectives
, with numerous universities and  To explore use of balance score card on
colleges.(Raju & Prasad, 2018) employee performance.
 The article was a part of a research project that  To study significance of balance scorecard on
involved studying how companies measure organizational productivity.
performance, especially those where intangible  To identify the application of balance
assets are crucial for creating value. (Kaplan, scorecard in different industries.
2010)
 This paper aims to examine the practical 4. Research questions:
application of the balanced scorecard across  What are the parameters in balance scorecard?
various industries. The focus is mainly on  How balance scorecard influences employee
theoretical discussions, and the paper relies performance?
heavily on existing literature. Here the author  What are the industries that uses the balance
compared organizations from 4 different scorecard to measure its performance?
industries and the results have shown to be  What are the challenges faced by the
favourable for implementing balanced Organizations in implementation of Balanced
scorecard.(Hasan, 2017) Scorecard (BSC)?
 The focus of this study is on understanding the
academic production and research trends III. RESULT & DISCUSSION
related to the using of balanced scorecard for Parameters in balanced scorecard:
evaluating the performance of supply chains. Developed by Robert S. Kaplan and David
This study uses bibliometrics to examine the P. Norton the balanced scorecard serves as strategic
various papers published in scopus and web of performance management framework. Its primary
sciences. The study showed that as though objective is to synchronize business activities with
there has been few ups and downs, there has an organization’s vision and strategy. The Balanced
been a general increase in studies focusing on scorecard is structured around four interconnected
balanced scorecard to evaluate the perspectives, each featuring specific key
performance of supply chains.(Botelho de performance indicators. The four perspectives are:
Sousa et al., 2020) Financial perspective, Customer perspective,
 In this study, the balanced scorecard model is Internal business process perspective and learning
applied to analyse key business strategies in and growth perspective. (Kaplan and Norton 1992).
the healthcare industry in China. Their Balanced scorecard is the amalgamation of
research confirms that the balanced scorecard financial and non- financial aspects of the
is highly adaptable and can be effectively organization. It serves as a dynamic amalgamation,
implemented in a global scale.(Lee et al., aligning individual and collective efforts with the
2023) strategic vision of the organization.
 The study focuses on explaining how the
balanced scorecard method is used to access Balance Scorecard and employee performance:
the overall performance of economic unit, The balanced scorecard has a profound
specifically in the context of total productive influence on employee performance by providing g
maintenance. Using the total productive a structured framework that aligns individual
maintenance started involves bringing together efforts with organizational objectives. Through its
machines, workers, equipment, and supporting emphasis on multiple perspectives, the balanced
processes to ensure the quality and integrity of scorecard encourages a holistic approach to
production. (Abidmuslim Hraiga et al., 2023) performance management. This framework enables

DOI: 10.35629/5252-0601574578 |Impact Factorvalue 6.18| ISO 9001: 2008 Certified Journal Page 576
 International Journal of Advances in Engineering and Management (IJAEM)
Volume 6, Issue 01 Jan 2024, pp: 574-578 www.ijaem.net ISSN: 2395-5252

employees to understand how their daily tasks to measure performance in the telecom industry ,its
contribute to broader organizational goals. not easy to bring into any organization. Apart from
Research indicates that implementing the careful planning , there are many challenges during
balanced scorecard positively impacts employee implementation that can make the entire system fail
performance. Kaplan and Norton 1996 argue that (Charu N Thakur, Dr Nayantara Padhi ,2022).
by linking performance measures to the
organizational strategy, the balanced scorecard IV. CONCLUSION:
enhances communication, improve focus, and In conclusion, this article delves into the
stimulate continuous improvement. multifaceted application of the Balanced Scorecard
The balanced scorecard has been widely (BSC) framework in assessing and enhancing
used in manufacturing sector namely textile employee performance, highlighting its pivotal role
industry (Dr. Prashant Surgonda Patil ,2019) , in shaping organizational productivity across
plantation industry (Hasan, R.U, and Chyi, T.M diverse industries. The analysis underscores the
,2017), construction industry (Hasan, R.U, and versatility of the BSC in providing a
Chyi, T.M ,2017), and also in service sector namely comprehensive and strategic approach to evaluating
accounting sector (Hanne Norreklit, Lennart various aspects of employee contributions,
Norreklit, Falconer Mitchell, Trond Bjornenak fostering a holistic view of performance. Through a
,2012), banking sector (Bhawna Sharma ,2016) thorough exploration of its application in different
(Hasan, R.U, and Chyi, T.M ,2017), tourism sector industries, the study demonstrates the adaptability
(Tahniyath Fatima a, Said Elbanna b ,2020), and effectiveness of the Balanced Scorecard in
Information technology sector (Awan Setiawan and tailoring performance metrics to the unique
Erwin Yulianto ,2017), Education sector (Maryam challenges and goals of each sector. Ultimately, this
Fooladvand, Mohammad H Yarmohammadian, research illuminates the significance of the
Somaye Shahtalebi,2014), (Chris Papenhausen and Balanced Scorecard as a dynamic tool for
Walter Einstein ,2006), (Dr. B.S.N. Raju, Mr. organizations seeking a nuanced and integrated
K.H.K. Prasad ,2018), Health care industry (Hasan, approach to managing and optimizing their
R.U, and Chyi, T.M ,2017), health care industry in workforce, contributing to sustained success and
China(Bernard Lee, Anthony S. C. Tsui & Oliver competitiveness in today's dynamic business
H. M. Yau,2023), supply chain and logistics landscape.
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DOI: 10.35629/5252-0601574578 |Impact Factorvalue 6.18| ISO 9001: 2008 Certified Journal Page 577
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