Reply to the two DB post 250 words a piece see attached (Must introduce a NEW CONCEPT)

Ciara Diehl

Discussion Board 2: Balanced Scorecard

Discussion Board 2: Balanced Scorecard

Key Concept Explanation

According to Khomba (2015), “[t]he Balanced Scorecard (BSC) model was developed to address the problems and limitations of relying solely on traditional financial measures when business executives are assessing corporate performance” (para. 1). The balanced scorecard evaluates the financial and non-financial aspects of a company, the customer’s perspective, the internal process perspective, and learning and growth within the company (Blocher, Stout, Juras, & Cokins, 2016). Evaluating a company by more than their financial assets and capital can provide a more thorough assessment of the company’s true value.

Comparison

The Meredith and Shafer (2016) text also identifies the balanced scorecard approach as evaluating the financial perspective, customer performance, internal business process performance, and organizational learning and growth (p. 205), as did the authors in the previous section. It is easy for companies and individuals when assessing firms to only evaluate their financial assets, profitability, capital, and equity, however, evaluating from a balanced scorecard approach allows for insight into the overall growth of the company; for a company can be growing in more areas that financials. One thing almost every article I read, as well as the text, did mention was that it is important for a company to be expanding financially, but without the other aspects the growth may be short lived as it is crucial for companies to expand in all four areas. The text also talked about the role of competitors in the environment and how they will affect the company and obtaining competitive advantage. Threw ways such as benchmarking, companies are able to document the level of competence of their competitors or other businesses within the market. Analyzing the firm’s competitors is essential because it allows for managers to understand why their customer performance or financial performance may need improvement.

Article Summary

The article by Constandache & Chiru (2015), evaluates performance management and how the balanced scorecard approach is able to better further these performance indications. The author noted that overall, within the past couple of years, the organizational performance within companies or firms have been improving based on simple reports that are being provided. The author evaluates Corporate Performance Management and how this approach is required to provide reports of their business strategy and how the balanced scorecard can help to achieve this as it is now “one of the most internationally used management instruments” (para. 13). The author then referred to a study that was conducted including 80 different companies and interviewed them. The study resulted in finding that 60% of those that answered revealed that there was not a consecrated management system in use, 85.6% have strategies that are set into place, 89.94% said that the operational activities that are taking place to correlate with the company’s strategies and more than 50% of these use the balanced scorecard approach, and 74.9% said that they have implemented performance managements systems, if it is something other than the balance scorecard approach. The author concluded with stating that 26.8% align their assessing from that of a balanced scorecard perspective or of one that is similar.

Biblical Integration

The relevance of a balanced scorecard to God’s law and a biblical perspective is that is allows for a company to be assessed on levels other than financial capital or their internal business processes, just as Christ does not judge us by how many mission trips we are able to go on or how many times a day we read our Bible. As Proverbs 3: 15 says, “Don’t assume that you know it all. Run to God! Run from evil!” Ecclesiastes 11:6 also says, “Sow your seed in the morning and do not be idle in the evening, for you do not know whether morning or evening will succeed, or whether both of them alike will be good.” Christ tells us that we do not know what is ahead and we should not assume that we know it all. John 7:24 says, “Do not judge by appearances, but judge with right judgment”.

Application

The balanced scorecard approach has been applied to real-world business because it is being used in businesses all over the globe to better assess their strengths, weaknesses, opportunities, and threats. It allows for companies to see where it is that they are thriving and also areas where they may need to improve. This approach is significant also because it allows for companies to not be valued based on one area of their company; if they are not excelling in training and learning but are doing well in internal business performance, there is a balance and auditors can see that there is still growth and competence in the firm.

Annotated Bibliography

Blocher, E. J., Stout, D. E., Juras, P. E., & Cokins, G. (2016). Cost management: A strategic

emphasis (7th ed.). Boston, MA: McGraw-Hill. P. 70

This source is a previous textbook, not online article. I will skip this annotated – there are 5 additional below.

Constandache, N., & Chiru, G. (2015). Balanced scorecard: Organizational performance

management instrument. Euroeconomica, 34(2), 97-112.

The author noted that overall, within the past couple of years, the organizational

performance within companies or firms have been improving based on simple reports that are being provided. The author evaluates Corporate Performance Management and how this approach is required to provide reports of their business strategy and how the balanced scorecard can help to achieve this as it is now “one of the most internationally used management instruments” (para. 13). The author then referred to a study that was conducted including 80 different companies and interviewed them. The study resulted in finding that 60% of those that answered revealed that there was not a consecrated management system in use, 85.6% have strategies that are set into place, 89.94% said that the operational activities that are taking place to correlate with the company’s strategies and more than 50% of these use the balanced scorecard approach, and 74.9% said that they have implemented performance managements systems, if it is something other than the balance scorecard approach. The author concluded with stating that 26.8% align their assessing from that of a balanced scorecard perspective or of one that is similar.

Janes, A. (2014). Empirical verification of the balances scorecard. Industrial Management & Data Systems, 114(2), 203-219. Doi: 10.1108/IMDS-04-2013-0195

This article seeks to overall verify the usefulness and value of the balanced scorecard approach. The article evaluated the YM Company, that is of which produces appliances, machines, and electric-motors for different various in-home appliances. The research conducted applied all four aspects of the balance scorecard approach and concluded that it is a valid study that had proven effective multiple times and provided long-term competitive capability. The author also stated that the BSC approach was easy to use and allows for effective forecasting. The author also mentioned that this approach is able to be used by either small or large businesses.

Khoma, J. K. (2015). Conceptualization of the balanced scorecard (BSC) model. International Journal of Commerce and Management, 25(4), 424-441. Doi: 10.1108/IJCoMA-12-2012-0077

This author focused on analyzing the four different areas of assessment. The author notes that the balanced scorecard approach was designed because many managements operations were frustrated in trying to assess the overall successfulness of companies. The article stated that other short-term measurements systems were not up to par and thus, the balanced scorecard approach was invented. The article notes that when observing non-financial aspects of a company, is to determine whether it is private or public but states that the priority of a company should be to “create and keep customers”. Each of the four aspects, the author analyses and breaks down for further understanding.

Sainaghi, R., Phillips, P., & Corti, V. (2013). Measuring hotel performance: Using balanced scorecard perspectives’ approach. International Journal of Hospitality Management, 34, 150. Doi: 10.1016/j.ijhm.2013.02.008

This author looked into hotel performance research that was published by seven different tourism and hospitality journals. The article looks into the previous approaches that were short-term and did not provide accurate results for companies. The author does emphasize that when it comes to companies and firms obtaining competitive advantage in their market and field it is essential to evaluate not only the financial aspects but the non-financial and the other three performance indicators. Also, the balanced scorecard approach can be used by companies that are newly established, those that have been around for many years, or those who are wanting to evaluate where their firm stands; it is not only for those firms who are in a time of difficulty.

Porporato, M., Tsasis, P., & Marin Vinuesa, L. M. (2017). Do hospital balanced scorecard measures reflect cause-effect relationships? International Journal of Productivity and Performance Management, 66(3), 338-361. Doi: 10.1108/IJ

The author of this article observed a study that was conducted in a hospital in Canada. The research was implemented to further understand how certain measures within the hospital correlated with the balanced scorecard approach and if cause-effect relationships were implicated. When researched the Ontario Hospital Association (OHA) found that 39 measures of organization had been implemented within the hospital based on the four aspects of the balanced scorecard approach. The article goes on to examine how the balanced scorecard can be implemented within a medical profession; due to medical facilities having to integrate more efficiency as well as the financial and other 3 aspects of the approach. The hospital has brought on the BSC approach as a means to “improve quality, reduce inefficiencies, increase overall organization effectiveness and maintain economic sustainability”.