RECA N°2. julio –diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
Applying the Balanced Scorecard to elaborate better Business Plans (Aplicación del Balanced Scorecard para elaborar mejores Planes de Negocios)
Carlos Rodríguez1
El propósito de esta investigación fue estudiar la influencia del Balanced Scorecard en el diseño de planes de negocios con miras a su aceptación por parte de las agencias otorgadoras de crédito, como incubadoras de empresas o aceleradoras. Bajo el supuesto de que es posible incrementar la posibilidad de aprobación de los planes de negocios, mediante el diseño de estos por medio de una metodología para la administración del desempeño, se llevó a efecto un experimento con seis grupos de emprendedores. A los seis grupos se les solicitó desarrollar un plan de negocios para iniciar una empresa de consultoría en administración de procesos. Tres de estos grupos utilizaron la metodología comúnmente utilizada para la elaboración y aprobación de planes de negocios, identificada aquí como metodología Oxford-Harvard. Los otros tres utilizaron el Balanced Scorecard como metodología de diseño de planes de negocios. Los seis planes de negocios fueron sometidos al escrutinio de un panel de expertos en negocios. Las respuestas al cuestionario fueron evaluadas utilizando la prueba estadística no-paramétrica de Chi cuadrado. Los resultados del análisis muestran que los planes diseñados mediante el Balanced Scorecard, están en mejor posición para ser respaldados financieramente, que aquéllos realizados con la metodología tradicional Oxford-Harvard. El experimento confirma que un plan de negocios que incluye instrumentos de control puede alcanzar un mejor juicio para la obtención de apoyo financiero. Keywords: Business Plans, Balanced Scorecard, Computer mediated Strategic Planning, Performance Management Systems, Strategic Control. (Planes de negocio, Balanced Scorecard, Planeación Estratégica mediada por Computadora, Sistemas de Administración del Desempeño, Control Estratégico)
1 Candidato a Doctor por el Programa de Maestría y Doctorado en Ingeniería, Universidad Nacional Autónoma de México – UNAM. Profesor en el Programa de Posgrado en Ciencias de la Administración, Universidad Nacional Autónoma de México – UNAM.
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
Applying the Balanced Scorecard to elaborate better Business Plans
Carlos Rodríguez2,3 [email protected]
The purpose of this research was to investigate the influence of the Balanced Scorecard in the design of business plans toward their acceptance by funding agencies like business incubators or business accelerators. On the assumption that it is possible to increase the approval likelihood of business plans by designing them with such a performance management methodology, an experiment was carried out with six groups of entrepreneurs. The six groups were asked to design a business plan for a consultancy in business processes. Three of them used the methodology developed by the universities of Harvard and Oxford, nowadays, the most common methodology to devise business plans; the others used the Balanced Scorecard which is as a methodology less used to design business plans. Products were submitted to an expert panel, constituted by Business School professors, to referee them. Chi-Squared analysis applied to a Likert scale questionnaire submitted to such a panel, demonstrate that the plans designed by using the Balanced Scorecard aroused better perceptions of quality than the ones using the currently accepted methodology of Oxford-Harvard. Therefore, results of the experiment confirm that a business plan including strategic control tools, like the ones provided by the Balanced Scorecard, appear to be better judged for obtaining financial support. Keywords: Business Plans, Balanced Scorecard, Computer mediated Strategic Planning, Performance Management Systems, Strategic Control.
____________________
Since the birth of Strategic Management, its creator, Professor Igor Ansoff warned that
the central problem with corporate strategy was execution. He argued that it is much
more important for an enterprise to execute correctly its strategy, and that is less
2 PhD Candidate at Graduate School of Engineering, National Autonomous University of Mexico (Universidad Nacional Autónoma de México – UNAM). Professor at Graduate School of Management, National Autonomous University of Mexico (Universidad Nacional Autónoma de México – UNAM). 3 Although the overall experiment was carried out in Spanish, as all subjects were Spanish spoken people, this report is written in English, in order to expose MBA students to English written literature.
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
important the design of it (Ansoff, 1965). Later on, Robert Kaplan and David Norton,
creators of Balanced Scorecard, assert that is better for an enterprise to execute a
modest strategy than to possess a great strategy unable to be executed (Kaplan &
Norton, 1992, 1993). From that time now, much academic work has been done to solve
such a pervasive problem or at least to figure out little more about it. For example,
Christopher Orpen studies the effects of strategic planning in performance of Small and
Medium Enterprises -SMEs- (Orpen, 1985), in the same way Leslie Rue and Nabil
Ibrahim examine the relationship between planning sophistication and performance in
SMEs (Rue & Ibrahim, 1998). Stephen Perry in turn, studies the relationship between
using business plans and the bankruptcy of US SMEs (Perry, 2001). Products of such
effort have appeared in the form of strategic control methodologies, such as Critical
Success Factor Analysis, the Balanced Scorecard (BSC), Six Sigma, Malcolm Baldrige
and EVA®, among others. Those all were designed with the purpose of monitoring the
performance of strategy execution, indeed these frameworks can be identified also as
performance management systems.
For nearly four decades now, great efforts have been done to diminish errors in strategy
execution, but less work have been exerted to enhance the quality of their design. One
of the few scholars interested in strategic plans design is Mark Adkins who performed
an experiment with the United States Air Force. The aim was to compare the quality of
plans designed in Computer mediated Strategic Planning sessions, against quality of
plans designed in a traditional affair. The scope of his research covered just the task of
collaboratively designing of plans, which once finished were submitted to a panel of
experts to evaluate their quality (Adkins, Burgoon, & Nunamaker, 2003; Adkins,
Shearer, Nunamaker, Romero, & Simcox, 1998).
Adkins’ experiment inspired the one reported here. But unlike Adkins’, all groups of this
experiment were supported by a Computer mediated Strategic Planning system. Thus,
the main difference between both experiments consists in the definition of independent
variables. For Adkins’ experiment independent variable was the presence or absence of
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
an electronic collaborative system, whereas in the one reported here, it was the
methodology applied to design business plans. It must be understood that the rationale
supporting this research implies that business plans rejection is consequence of missing
strategic control tools in the design stage.
Deficient design of business plans, elaborated with traditional methodologies becomes
patent when trying to compete for funds, being rejected systematically. Omissions
occurred in the design stage of business plans, are caused by deficient collaborative
processes by means of which the plans are elaborated. Therefore, the problem tackled
in this research is the mistaken design of business plans, as well as the mistaken
collaborative processes by means of which, business plans are designed. As a possible
solution to this problem, it is proposed to embed strategic control tools, like the ones
provide by the Balanced Scorecard in the design of business plans. The research
question underneath this study inquires whether it is possible to improve quality of
business plans by attaching visual control tools like the gauges and color progress grids
provided by a dashboard system.
The hypothesis tested, for the research question to be answered, implies that if strategic
control instruments, like the ones provided by the Balanced Scorecard, are to be
incorporated in the design, quality of business plans will be improved. As a
consequence, business plans will be better suited to be granted for financial support.
Methodology
To prove this hypothesis, a social experiment was carried out with groups performing
collaborative tasks consisting of the elaboration of business plans for the creation of
business processes administration consultancy firms. The design of such experiment
corresponds to Post-Test Only Control Group Design (Campbell & Stanley, 1970) as
appears in Figure 1. This design of experiments was selected because of its power to
carry out social experiments in diverse areas like education, medicine, group decision
making, consumers’ psychology, and business research, among others. Post-Test Only
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
Control Group Design allows to experimentally comparing two groups exposed to
different treatments, one of which is the target of the researcher, meanwhile the other is
only a placebo. In the case of this research, the BSC methodology was the target,
meanwhile the placebo was OH methodology.
1
1 X O
O
R
R
Figure 1. Post-Test Only Control Group Design.
Experimental Units
Subjects of the experiment were students recruited from the Graduate School of
Management, National Autonomous University of Mexico (UNAM). All subjects were
current and former learners with the one that subscribes in the subject matter of
Quantitative Analysis for Management. They all were already coursed the Business
Plan subject matter, which is part of the MBA syllabus, and much of them were in fact,
business consultants. The six groups created were classified into two categories,
experimental groups and control groups, subsequently; three groups of each category
were formed.
The process of recruitment of participants is considered to be random in nature (R),
since groups did not assign themselves beforehand. Experimental event (X) comprised
meetings to design business plans. In the case of experimental groups, they applied the
Balanced Scorecard (BSC), meanwhile control groups applied the currently accepted
methodology to design business plans, Oxford-Harvard methodology. Observation (O)
consisted of analysis to a questionnaire applied with the panel of experts who evaluated
the quality of the six business plans.
All six groups performed their task during meetings carried out at the Institute for
Research on Applied Mathematics and Systems, National Autonomous University of
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
Mexico. They all were accommodated at a “U” shaped table for face-to-face interactions
to be allowed. All groups performed their task within schedules lasting about 10 hours,
in only one day; this way avoids spuriousness to the experiment because of
experimental mortality or absences, which could arise as rival explanations if meetings
lasted more than a day.
Groups’ arrangement is shown in Table 1. Maximum number of participants was eight
as it is permitted by the electronic meeting system utilized. Minimum number of
participants was five for the experiment to be adjusted with the small group decision
making theory, which asserts that decision making groups perform better when formed
by 7±2 members (Fisher, 1974). Column of treatment shows the methodology used by
groups, either Oxford-Harvard (OH), or Balanced Scorecard (BSC)
GROUP No. OF PARTICIPANTS TREATMENT
1 A 8 OH
1 B 7 BSC
2 A 5 OH
2 B 8 BSC
3 A 6 OH
3 B 5 BSC
Table 1. Arrangement of groups attending the meetings.
All groups were supported by MeetingWorks™ Version 7; a Java Virtual Machine based
electronic collaborative system. Temporary licenses for eight users plus a chauffeur
license were granted for doing the experiment by MeetingWorks CEO.
Application of electronic collaborative systems, also labeled as Groupware, in group
decision making has been reported since some decades now (DeSanctis & Gallupe,
1987). The use of Groupware, specifically Group Decision Support systems (GDSS)
can effectively diminish problems raised during traditional processes of group decision
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making. The anonymity of those who generate ideas is better preserved; parallel
participation makes the meetings more efficient; legitimacy of voting process is
guaranteed by means of electronic controls; and conflicts handling is improved by
discussing on the ideas displayed instead of on the authors (Nunamaker, 1989, 2004;
Valacich, Dennis, Jessup, & Nunamaker J. F., 1992).
Nevertheless, the application of Groupware in strategic planning began formally, for
only one decade. Currently such an application is known in academia as Computer
mediated Strategic Planning (Adkins, et al., 2003; Adkins, et al., 1998; Helquist, Kruse,
& Adkins, 2008).
Control groups utilized the standard methodology of Oxford-Harvard to formulate
business plans. This methodology implies the creation of a vision, a mission, a SWOT
analysis and statements for:
Information of the industry
Information of principals
Marketing plan
Financial documents
In turn, experimental groups utilized the Balanced Scorecard, which provides strategic
control tools such as gauges and color progress grids. This methodology, very recently
introduced in the design of business plans, implies designing plans taking into account
four perspectives:
Financial perspective
Customer perspective
Internal perspective
Innovation and learning perspective
Besides using MeetingWorks™, control groups used Innovateur™, which is a free Excel
based package to perform finance planning developed by a British software enterprise.
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
Experimental groups used StrategyMap™, BSC Australian application. A license for
limited cases was provided by the Firm’s CEO.
Facilitator and chauffeur were roles taken by the same person, and this person
conducted the six meetings, avoiding spuriousness of instrumentation to the experiment
because of facilitation style, which could be a rival explanation for the experiment if
groups were conducted by different facilitators. Figure 2 shows one of the groups doing
their task, being supported by the facilitator.
Figure 2. A group performing its task.
Meeting agendas were planned by using MeetingWorks™ some days before each
meeting took place. Schedule for control groups followed these steps:
1. Creation of a Vision and a Mission 2. SWOT Analysis 3. Competitive Analysis 4. Marketing Plan 5. Operations Plan 6. Financial Plan
Schedule for experimental groups followed these steps:
1. Creation of a Vision and a Mission
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
2. SWOT Analysis 3. Financial Perspective 4. Client Perspective 5. Technological Perspective 6. Learning Perspective
The strategic control tool included by control groups in their business plans was Break-
Point Analysis (Figure 3); Innovateur software was well suited to support such an
analysis. On their part, experimental groups included gauges and progress grids
provided by the BSC methodology; StrategyMap™ allows users to easily design such
instruments on the basis of what has been discussed. Figure 4 display a Strategy Map
as developed by one of the experimental groups (in Spanish, as it was the language
used during the experiment).
Figure 3. A break point graph for a business plan
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
Figure 4. A Strategy Map as designed by one of the groups.
Each group work flew throughout its agenda, which included brainstorming, explanation
and voting stages. The entire discussion products, including voting graphs were saved
in an MsWord file. One group member, chosen by agreement in each group was in
charge of editing such a file. Once the document was edited, it was submitted to the
head of the experiment, who collected the six business plans.
Questionnaire
A panel of experts in strategic planning and elaboration of business plans was
constituted by invitation to participate in this research. This panel was constituted by five
persons holding a PhD in Business Administration, four of them were with the Graduate
School of Management, National Autonomous University of Mexico (UNAM); the other
one was with the Manchester Business School, U.K.
All plans were uploaded into a web site in order to stay reachable by such a panel to
review them (Figure 5). The web site (designed in Spanish to facilitate understanding of
all members of the panel, even the one from Manchester Business School, as he is a
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
Spanish-speaking person) enclosed all business plans, and also had a link to the online
questionnaire, which was hosted by e-encuesta, an online service from Spain.
Figure 5. Web site containing the business plans and a questionnaire link.
The questionnaire applied was adapted from the one used by Mark Adkins in his
experiment with the United States Air Force (Adkins, et al., 2003; Adkins, et al., 1998). It
consists of a Likert scale questionnaire composed of six Likert items, each of them
could be answered selecting one out of seven options in line with the degree of
agreement the expert confers to it. The Likert scale questionnaire is repeated for each
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
business plan; therefore, as six plans were designed, the questionnaire was repeated
six times. No one of members of the panel was allowed to know the methodology used
to design the business plans.
The head of the experiment used the name of the plans (the consultancy firms
proposed) as internal code to know which methodology was applied to design them.
Table 2 shows the six Likert items (translated into English, original questionnaire was
applied in Spanish); they were written in form of assertions that cause a reaction that
can be indicated in a seven points scale, implicating the level of agreement. This is
indeed the attitude of the surveyed subject towards each assertion (Likert, 1932).
Six quality constructs are evaluated by means of such a Likert scale questionnaire:
completeness of the overall business plan as judged by the experts; attainability as for
purposes outlined in Mission and Vision statements; viability of the plan as can be
regarded by robustness of the analyses taken by the group; clearness in explanation of
purposes and actions to reach them; measurability of the plan as it comprehends
mechanisms to monitor its performance; suitability as the plan appears to be candidate
to be funded by a financial agency. Columns to the right only indicate the levels of
response allowed for the evaluators. Each level was weighted accordingly for statistical
analysis feasibility.
Likert item Level of response Elements of the Business Plan presentation, such as title and executive summary, really called your attention and allowed you to understand the aspirations of entrepreneurs.
Str
on
gly
Agre
e
Agre
e
Weakly
Agre
e
Indiffe
ren
t
Weakly
Dis
agre
e
Dis
agre
e
Str
on
gly
Dis
agre
e Temperance in approaching objectives denotes high possibility in
accomplishing the plan.
Aspects taken into account, both internal and external (as SWOT Analysis) allow you to corroborate high viability of the plan.
Ideas on actions to be undertaken in order to reach objectives are sufficiently clear and realistic
The plan includes control instruments that appear to be useful in measuring its performance, once implemented.
In general, the plan has an adequate structure, so that only minor improvements are needed for it to be a good candidate to obtain funds in order to initiate the business.
Table 2. Questionnaire submitted to the panel of experts.
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All answer were collected by e-encuesta, the web server where the questionnaire was
hosted; this online survey service also provided a database containing all responses of
the questionnaires in a .csv (comma separated values) file that can be displayed with
Excel and other statistical packages.
The responses obtained in the questionnaire and kept on the database retrieved, were
analyzed statistically using the statistical package SPSS version 17 (Figure 6). The
nonparametric statistical method of χ2 was selected because it is used to analyze
relation between categorical variables, like the ones in this experiment, the six quality
constructs in the questionnaire, which were translated into a Likert scale item. Indeed,
the statistical proof of χ2 is regularly associated to Likert scale questionnaires to test
association of difference between two qualitative variables. Six cross tabulation tables
were produced to analyze the questionnaire. Columns variable was the level of
response the experts confered to each one of the Likert items; rows variable was the
methodologies applied to design the business plans.
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
Figure 6. SPSS Database containing the panel responses to the questionnaire.
For each construct, a null hypothesis was generated, implying the nonexistence of
relationship between the response of experts and the methodology used to design the
business plans. An alternative hypothesis was generated in such a way that if verified,
indicates relationship of difference between level of answers of experts and planning
methodology. Therefore, alternative hypotheses verify the existence of difference
between responses related to the construct under analysis and methodology to design
the business plan.
As it is common in social research, level of confidence demanded in this experiment
was set at 95% for the χ2 test. So α level was set at .05. A level of P-value above α
does not permit the null hypothesis to be rejected, and this implies no relationship
between variables under analysis. On the other hand, a P-value below α, does permit
the null hypothesis to be rejected, and then the alternative hypothesis can be accepted.
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The last implies occurrence of relationship between variables, meaning that the
methodology used to design the business plan can exert influence in the response of
the experts.
Results
P-values for all Likert items are shown in Table 3. As can be noticed, none but item
about measurability (the kind of control instruments) shows statistically significant
differences in using one or another methodology. This means no matter which
methodology is used for designing business plans, quality keeps unaffected. This is not
the case considering the item of measurability, as P-value in there is far below the α
level of .05. Here, it must be accepted that a strong relationship appear between
methodology to be used for elaborate a business plan, and the improvement of quality.
The aspect of including graphical control tools in the design business plans, being
qualified far above P-value, arouse positive perception of quality in all members of the
panel of evaluators.
Likert item P-VALUE Elements of the Business Plan presentation, such as title and executive summary, really called your attention and allowed you to understand the aspirations of entrepreneurs.
.466
Temperance in approaching objectives denotes high possibility in accomplishing the plan.
.192
Aspects taken into account, both internal and external (as SWOT Analysis) allow you to corroborate high viability of the plan.
.740
Ideas on actions to be undertaken in order to reach objectives are sufficiently clear and realistic
.815
The plan includes control instruments that appear to be useful in measuring its performance, once implemented.
.006
In general, the plan has an adequate structure, so that only minor improvements are needed for it to be a good candidate to obtain funds in order to initiate the business.
.491
Table 3. P-values for the Likert scale questionnaire
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The P-value only establishes a strong relationship of difference between the
methodology in use and the quality associated to measurability (.006, that is far below
.05 requested by the experiment), but it does not show which one of the methodologies
under evaluation is better. For this to be solved, a visual inspection to Figure 7 is
sufficient. As observed in the score of responses done in each level of the scale, it is
clear that Balanced Scorecard outperforms Oxford-Harvard methodology in designing
business plans, considering exclusively the quality of control instruments.
Both, P-value and visual inspection to the graph constitute a strong argument to
statistically accept the work hypothesis of this study: incorporation of control instruments
in business plans designed during Computer aided Strategic Planning meetings,
generates improvement in the quality of these.
Figure 7. Bar graph for Likert item: “The plan includes control instruments that appear to be useful in measuring its performance,
once implemented”.
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
This result constitutes substantial difference with regard to Adkins’ experiment, which
shows this construct unaltered. Adkins wanted to probe whether introducing a
Groupware system can improve overall quality of plans. Methodology for designing
plans that was used by all his groups was the same, but experimental groups were
aided by a Groupware, while control groups performed without such an aid. Adkins
found that measurability does not depend upon the use of a Groupware.
Discussion
This research corroborates findings of Adkins’ experiment, particularly those concerned
to quality constructs others than measurability. With respect to completeness,
attainability, viability, and suitability, P-values report no significant differences in using
any of the two methodologies tested here. It was expected this result because both kind
of groups, experimental and control were immersed in an electronic environment of
Computer mediated Strategic Planning. For Adkins, plans designed by the ones that
were aided by such kind of Groupware were better qualified by his evaluators. On the
other hand, he found measurability remains the same no matter if computer aid is used
(Adkins, et al., 2003; Adkins, et al., 1998). This is where this research contributes an
advance towards quality improvement of business plans. With respect to measurability,
P-value reports high relationship of difference between methodology utilized to
elaborate business plans and the perception of quality, as judged by the members of
the panel of experts
Balanced Scorecard was better qualified against the most commonly used methodology
to develop business plans, the methodology of Oxford-Harvard. As BSC incorporates
control tools like gauges and color progress grids, it can be asserted that by attaching
such devices in the design of a business plan, it appears to perform better once it is
implemented. The incorporation of control instruments improve the general robustness
of a business plan, since embedded in the design there exist instruments by means of
which performance of the plan can be monitored during the implementation.
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Limitations
This research took part in an academic environment in which recruitment of participants
was realized with graduate students of Business Management. In spite of the fact that
the subjects know how to design a business plan, they all were aware that meetings
comprised simulated environments and that some aspects of a real business plan
cannot be done in a short period of time. On the other hand, they all were motivated by
the fact that products of the meetings can be regarded as robust templates that, with
only little additional work, will take form of real business plans.
Six groups of entrepreneurs, five to eight in size each are really a short population, so it
would be better to recruit more individuals, but this also would be time consuming.
Hence, despite of shortness of population, it was preferable to carry out the experiment
rather than wait for more groups to be constituted. Being a nonparametric test, χ2 allows
statistical analyses with rather small populations, as it does not claim data to possess a
mean and a standard deviation.
The scope of the research did not permit real implementation of plans, which indeed
was not the purpose. As in Adkins’ experiment, the main purpose was to produce a step
forward in academic efforts towards improvement of quality in the design of business
plans.
Conclusions
This research proves the influence of the Balanced Scorecard in the design of business
plans that are supposed to compete for funds. The motivation to carry out the project is
founded in the assumption that low likelihood for business plans to be better judged, is
caused by the absence of instruments that can support the plans in implementation and
control stages. Regularly, in collaborative processes of plans design, strategic control
instruments are not part of the overall design. Such instruments could assist
entrepreneurs during plans execution. Absence of control instruments that are
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integrated in the design of business plans, causes uncertainty during the
implementation, and condemning planning efforts to failure.
As a possible solution to this ancient problem entrenched in strategic planning, it was
proposed to increase opportunity for the business plans to be accepted by exerting an
improvement in quality business plans, consisting of incorporating strategic control
instruments, like those provided by the Balanced Scorecard. All groups generated their
business plans immersed in an electronic environment of Computer mediated Strategic
Planning. Computer support substantially augmented the pace of meetings.
This is not the only benefit in using Electronic Meeting Systems. Other notable benefits
are: preservation of anonymity during the phases of ideas generation; participation in
parallel, made possible by the generation and sharing of ideas simultaneously; and the
guarantee of a legitimate processes of voting thanks to the security mechanisms that
avoid duplication of individual votes (Nunamaker, 1989, 2004). This study upholds these
benefits.
Thus, this experiment was carried out to compare Balanced Scorecard, which is
commonly utilized in developed countries, against the most commonly used
methodology to design and evaluate business plans, the Oxford-Harvard methodology.
Three plans were designed with Balanced Scorecard, and three with Oxford-Harvard
methodology.
Results of this experiment corroborate that embed strategic control tools, like the ones
provide by the Balanced Scorecard in the design of business plans, the likelihood for
plans to be better accepted, can be increased.
Quality of business plans was measured by means of six hypothetical constructs of
quality, each of them was turned into a qualitative variable that could be measured to
find relations between them and methodology used to design business plans. Five out
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of six quality constructs remained invariable, which mean that completeness,
attainability, viability, clearness and suitability are not influenced by the methodology
used and therefore quality does not depend on them. On the other hand, the construct
of measurability, which evaluates whether the plan comprehends mechanisms to
monitor its performance, denoted strong relationship with regard to the methodology
used.
As judgment from the panel of experts favored Balanced Scorecard over Oxford-
Harvard methodology, it can be verified that incorporation of strategic control
instruments produce an improvement in business plans quality.
As a result, the main contribution of this research is an innovation proposed for the
design of business plans, elaborated in an electronic atmosphere of Computer mediated
Strategic Planning. Such innovation consists in utilizing a performance management
system, the Balanced Scorecard, as a methodology to design business plans, in such a
way that advantages in incorporating strategic control instruments can be materialized.
The Balanced Scorecard, though launched in 1992 (Kaplan & Norton, 1992), is being
slowly introduced to our country, but only big organizations are capable to get such a
management tool. Yet, its use as a methodology to elaborate business plans, is even
more novel, even in developed countries. Regarding this, the BSC software applied
during the meeting of this experiment, it is indeed an inexpensive option for Mexican
SMEs to implement it.
Although Balanced Scorecard is not commonly know yet as a methodology to evaluate
business plans by funding agencies like business incubators and business accelerators,
results of this experiments can be taken by such agencies as suggestion to improve
their procedures to approve business plans.
RECA N°2 julio – diciembre 2010 Certificado de Reserva de Derechos al Uso Exclusivo del Titulo núm.: 04-2009-063011133400-203
References
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