ISBN 978-93-5268-065-8

National Level Seminar

On

"Diverse Challenges for Business Organisation"

7th October, 2016

organised by Department of Commerce & 1QAC

FROFESSIOM oEMY OF at ACADE

MAPS

EDUCATIO NFOR LI

wwwm

MANGALORE ACADEMY OF PROFESsIONAL STUDIES

(Maps) (Affiliated to Mangalore University)

Chinmaya lane, Bunts Hostel-Kadri Road, Mangalore -575003, DK, Karnataka Contact No: 0824 2411750/2222442 Email: mapsmangalore@gmail.com

Website: mapsmangalore.com

INDEX

Titke Author PageNo

1-5Culture and Consumption- KFC's

adaptations

Deepti Jog Dr. Nandakumar Mekoth|

6-12 Best practices in HRM-with special reference to Hindustan Petroleum

Ranjini M

Coporation Limited Geetha Prabhu 13-18

Niche marketing-what s good about

being small?

19-28 Empowement of rural women through |Rajesh A.S

SHG'S - A study with reference to (Sheethal K

Chaithanya Bantwal Taluk 29-34 A study on versatility of Balanced

scorecard applications

Dr. Yathish Kumar

Rajeshwari H. S

35-40 Core banking system and Customers' |Malathy. K

challenges- A micro study in Mangaluru |Dr. Subhashinisrivatsa

City Bhagyashree M 41-45 Micro finance-as a part of rural

development Dr.Abbokar Siddiq 46-52 Health insurance literacy among rural

folk: a study in Kepu Grama Panchayat |Chandrashekara. K

of Bantwal taluk

Student's perception towards financial Mr. Rakesh T S 53-58

literacy A study with special reference |Mr. Gurudath Shenoy

to PG degree students of SDM college,

Ujire A A study on socio economic conditionsSowmyashree J of Beedi workers with special reference to women labour

59-62

63-67 Impact of celebrity endorsement on Shwetha Acharya T

Consumer Buying Behavior for FMCG sector

RDAPPLA ASTUDYON VERSATLITY OF BALANCEDSCORKCAs

Rajeshwari IHS Research Scholar University Collkge, Mangale -nail:hs.rajeshwarilayalomye.

Dr Yathish Kumar Associate Professor

University College. Mangalore E-mail:yathish31 30gmail.com

ABSTRACT

A well-defined plan in the name ol 'siratcgy rules the competitive.

dvanap organizations. Strategies formed by the qualified top-level personnel will future of any organizatlion. In modern competitive world plenty of n

alepy ther y

will come to force and some of them disappcar very soon and some e modified as soon as the decision-making environment changes. Balanced (BSC) is one of such strategy used by the organizations to tackle a problems. Even though Balanced Scorecard was introduced in 1991. it ic in its approach. Various amendments are taking place to fit the versatile neu

organizations. It is not posible to say that the Balanced Scorecard is a model to use. We need to modify further to suit the organizational problems W this background, this paper will analyse the Balanced Scorecard deruner versatility and its challenges to overcome to developa working model.

Wit tiv:

Key words: Strategy, Organisation, Balanced Scorecard

INTRODUCTION Survival ofthe fittest is the logo of the competitive world. A well-defincd plan in t name of Strategy' rules the competitive advantage of organizations. Strategie. formed by the qualified top-level personnel will decide the future of organization, In moderm competitive world plenty of new strategies will come into force and some of them disappear very soon and some other gets modified as soon as the decision-making environment changes. Balanced Scorecard (BSC) is one of such strategy used by the organizations to tackle the various problems. Even thoug Balanced Scorecard was introduced in 1991, it is still young in its approach and ha the potential to grow. With this background, this paper will analyze the balancet scorecard and its implication in various fields. LITERATURE REVIEW The tableI shows the literature review on the various dimensions of Balanco Scorecard at various time periods indicating the versatility of its usage SI Researcher Findings Versatility 01 Robert S. Kaplan

and David P Norton( 1992), (1996),(2010)

Paints the picture of BSC with its four dimensions. Linking organizational Scorecard unit and Individual scorecard Implementation process of Balanced Scorecard in the General Electric Company

Exploratory research on Balanced Scorvand

focus on the Stratey Development andd Implementaton

5SC as the strategic management tool for the Competnnv selected universities of Giemany(Hladchenko,| advaunag

02 |Myroslava Hladechenko ve

2015) 29

wwwwm. mo

uha Kethunen Ismo Combined efforts of Management Information | Management (2005) System and Infommation Technology 04 Ahmed Al-Ashaab,BSCmodel to the collaborative research in

Myma Flores, et al between USCompanies and the Universities 05 Sameer Pingle and Conceptual study and the comparison of

Information System Collaboration

Communication and global institution to Indian Institution Kaul Natashaa

K Abd Rahman Ahmad |BSC as a concrete measure to translate the fecdhack mechanism Translating tool of mission and the objective into objective and Mission and Vision

measures of an organization and Ng Kim Soon

(2015) 07 Fahmi Fadhl Al-

Hosaini et al (2015)

8 lHarold F.O'Neil, Jr., Academic Scorecard' in consistent with the Individual et al

Inclusion of spirituality in the BSC model Ethics measuring tool

Balanced Scorecard in educational institutions Perfommance Evaluation Tool

09 Rajiv D. Banker,et all | Comprehensive version of BSC as a strategic Strategic Business

(2004) Business Unit (SBU)perfomance evaluating Unit tool tool

10 Christopher D. Itner.| Linking the BSCto the reward management Reward Management et al (2003)

11 W.H.Tsai, W.C. Chou The Sustainability Balanced Scorecard as a Evaluating Investmend

and W. Hsu (2008) framework for selecting Socially Responsible Decision

Tool

Investment

12 FrederickM. Hess andBSC as a management accounting tool (the Data Collection Tool

Jon Fullerton (2009) |intention of which is to provide manager the

needed information)

Table 1:Literature Review Source: Authors Composition

OBJECTIVES

To understand the Balanced Scorecard perspectives

To know the versatility of the Balanced Scorecard Applications 1. 2.

The study is conceptual in nature which analyse the implications of Balanced

Scorecard to various functional area.

METHODOLOGY

Imagine that you are a driver of a car. If then, what are the eriteria's to judge its

performance? Is it the price?, Is it the mileage? Is it the comfort? ls it the durability?

We are sure that decisions will based on all the above and nmany more factors. In

C same way, if you want to evaluate an organization, are the mere financ

diements enough? Definitely the answer is no. To solve this problem, Balancea

Scorecard technique emerged.

Balanced Scorecard

Orton Institute sponsored a

multi-company study, "Measuring Performance

30

Ormal beginning of the work is traced back to 1990 when research wing or

in the Organizations of the Future. DavidP Norton sers

Robert S Kaplan as an academic consulta

companies met bi-monthly to develop a new performanco ves fro

the carly period it was named as the 'Corporate Scorecard' uremen

led to an extension of the word to "Balanced Scorecard' Rol

ed as the stu altant and representa

and long tem goals, financial and non-financial result, lagging and lea

through a series of articles in Harvard Business Review anda lote oeWas rele rk was rele external and internal pecrformance communication. Their further ung indi

of companie adopted the same gradually.

Since then it has been used for various purpose by various institutionc. accordin their requirement and the quality of Balanced Scorecard is like water which

the shape of container it is poured into.

It is highly difficult to give a concrete and specific definition of h Scorecard by incorporating all its functions. People modify it as and wher 2

and find new implication of it. That's why some authors call

System' rather than a "Management Strategy'. Balanced Scorecard provides the companies to invest in long term-customa employees, in new product development and in system-rather than managin bottom line to pump up short-term ecarnings (Kaplan and Norton 1996).

Perspectives of Balanced scorecard Balanced Scorecard provides a comprehensive framework where mission staterne of an organization translated into objectives and measures of perfomance. Balance Scorecard provides four major perspectives to fulfill its said objectives. Eac

perspective indicates the sub-divided objective, measure to gauge the same, se target and future initiatives. These were discussed in detail in the following wa (Kaplan R. S., 1996). a. Financial Perspective

"To succeed financially, how do we seen to our shareholders"

The Balanced Scorecard retains the financial measures in its approach. Finani. measures were substitutable but they were not complemented. Every work

organization will end with their contribution to the bottom line. Balanca Scorecard includes the financial measures like Cash Flow, Financial Result

Return on Capital Employed, Return on Investment, Economic Value Ade etc. Satisfaction of the shareholders is the main objective here.

b. Customer Perspective "To do our Vision performance, how should we seem to our customers The core outcome measure used was customers' satisfaction. Custome satisfaction is measured through customer retention, new customer acquisiton customer profitability, market and account share in targeted market.

c. Internal Business Perspective "To satisfy the shareholders and customers, what business process mu ust

alan requi

mers. t

mer

excelled at?" It comprises of two major approaches i.e. innovating product design deveioth and operationalize (manufacturing, marketing and post-sale servic innovation. Ultimate aim is to satisfy the stakeholders. d. Learning and Growth Perspective

th

31

ochieve the vision, how to sustain, change and improve?"

u bradges the gap between the present capabilities and future challenges. It tries prove the pertormance to meet the future competitive needs in terms of

people system and organizational rules. This focuses on investing in re-skilling

employees, enhancing technology and system, aligning organizational procedures

and routnes. L nk ing the multiple approaches to single measure can be noticeable in the Chart

The long term plan will ultimately end with the finaneial improvement and the shareholders satisfaction and the

accomplishment of vISIon statement

Chart 1: BSC Model

Return On Capital

Employed Financial

Perspective

Customer Customer Loyalty Perspective

On time Delivery

Intenal Process Process QualityProcess Cycle Time Perspective

Learning and

Growth Perspective Employee Skills

Source: (Kaplan R. S, 1996)

Versatility of Balanced Scorecard Applications Once the Balanced Scorecard is implemented in the organization, then the application Can reap outcome from multiple angles in the organizations. The versatility of

Balanced Scorecard applications are listed below

a. Balanced Scorecard used as a performance evaluation technique where it measures the performance of the individual, department and the organization as

a whole.(O"Neil, Bensimon, Diamond, & Moore, 1999) b. Balanced Scorecard can act as a communicating tool where it transforms the

VISIOn and the mission statement as individual's objective. The feedback can

also be share by the stakeholders through Balanced Scorecard as it is a pallet of information about the organization. It can also be used as the performance evaluation reporting tool by the different departments.(Pingle & Natashaa, 2011) Balanced Scorecard is a learning tool to learn about the organizations strategies,

past performance and the future initiatives. d Some organizations had used the Balanced Scorecard as a reward management ey link the employee's performance to the achievements against the

Standards of the respective objectives. (Ittner, Laracker, 2003)

Is palette of information about the organization, manager can take more

mlormed decisions.(Hess&Fullerton,2009

Budget management

can be easie as it shows

organizational growth.

be easier as it shows the projects contribulion antage.

organization.l Ralanced Scorevard can also be used to get the competitive advanto. ( 2

hallenges of Balanced Scorecard

Bulanced Scorecard faces challenges as presented here

Balanced Scorecard is subjective in nature as originally devel

measure each aspect in quantitative torm, Ilacks measurability

comparablity with other institutions.

Provides equal importance to each measures and objectives.

Scorecard

customers by is a

Creating

tool of the Blue

things Ocean

with

Strategy. a long term

It focus foresight

on the satisfacs

chenko, 21 Balan. hallen nature as o asurability of succes eveloped. It will

ility of success

Balanced Scorecard needs well detined-strategies to implement. The

It takes time and money to implement. It is not just a strategy it is a mana nagem

Succe stateme of the Balanced Scorecard depends on the strength of the mission ctuece

system hence needs time and money for implementation.

It does not suggest on its own. It oniy indicates where we are lagging

Lower level of awareness among the managers about the utility and the u

of Balanced Scorecard may result in the wrong usage. g.The Balanced Scorecard designed for one organization cannot be generali

to other organizations as the mission statement of each organization differs

SUGGESTIONS The challenges can be overcome through the following measures a. To avoid subjectivity use percentage of achievement against every objectiv based on the standard performance set earlier. b. Weights can be used to decide the importance of each measure and objectiv based on their contribution to achieve mission statement. c. Identification of the question is half solved. d. Develop Balanced Scorecard with atmost care and caution involving all th stakeholders after analyzing and understanding the major strategies. CONCLUSION Balanced Scorecard is a single tool with multiple advantages. Its challenges ar mild and can be overcome. Still the success of the Balanced Scorecard depenu on the care and caution taken at the time of implementation to make it unique an suit the organization.

REFERENCES Ahmad, A. R. & Soon, N. K. (2015) Balanced Scorecard in Higher Eduea

stitutions: What should be Considered'? Technology Management and Emerging Technologies Al-Ashaab, A., Flores, M., Mahyar, A., & Doultsinou, A. (2011, July) A Da Scorecard for Measuring the Impact of Industry-UniversityCOllab Production and Planning Control, 22(406), 554-570 A-Hosaini, F. F., & Sofian, S. (2015) An Exploration of Inclusion of Sup

into the Balanced Scorecard

atio

lance oration

eriori

33

Fimatcual Perfomar A Review Asian vsial viener, 1\0 eved from hmp. dra LAL 1055% as 1I

C2002. January ) Ha.anced oard Erhics ness and

fessal Ethucs Joumal 21. 129-1

erss F M. & Fulleron ny The Yamiter we nezd ingng Palanca

so Educaton Data e Phs cita Kappan, 136AES M 2015 Baiarcert orai A raeg Maraanent ysern

Hher Edtuacaor T m ia. Jait A.wurarcrthsan, 242, 2

CD. Laracker. D F.&*M (293 Sul rrzevty ard he aning

Pan ance Measures Eidence fr a Ralanncot csz T he

uE Reew. 7325-754. Penrev i knz. wwsrI Saie

Managamemt lndomatin. Sy wem Based on e Palatss KaTnola Scorecar

Kra 5 196. Fal) Limng Balatcet Sorsad . sraeg ena

Managememt Peview 3153-7

KariR5.(199, Tae Baatcai Sorcar-Measra ta ie manc

Hiarwad Business Reiew, 71-7 KapianRS.(19.na-frar Lsig Baanca sria agc

Manzpemet Sy sem Hzmrd Busine eiew 71-15

riR5. 2012, The Baiarcei Sreari C erts r Baacs reat

Comenzies Jomal ot Acn g &Orgariaticra. Charge

Kapiam5.áNoo D. P.(196, Trasang Sre nu. e An The

Balamced Soorecard assarhe Haward BTen cirsi s Sn

Modev R Cappoi C-& Soiomon 2 Sraeg keaiacn n

AcaiereA Bzancai Sooreczi Apprac remara omai of EacAINa

Manzgemenr 221L 24

.ONel H F. Bens E M Damoné M. & Mre M 2 Nonemiher-Decemiter Desigg d eeing a caieri Sreari

Change 316L3240 PingieS& Nz2stez K 2011. anar-re Pariomatc: Managemet n

mSsiHger Eårzir ro Baancai Sircaré 4 Cmcepzi Sc

263-274