Previously published as: Work Study
Online from: 2004
Subject Area: Performance Management and Measurement
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Article citation: Tom Burgess, John Heap, (2011) "Editorial", International Journal of Productivity and Performance Management, Vol. 60 Iss: 5, pp. -
The Balanced Scorecard (BSC) must be one of the major topics that comes to mind when thinking of performance measurement and management at the organisational level. The year 2012 marks 20 years since Kaplan and Norton (1992) published their seminal article in the Harvard Business Review about the BSC. The precursor to this contribution was the earlier book Relevance Lost (Johnson and Kaplan, 1987), which critiqued the failure of “unbalanced” accounting systems. Since its inception BSC has gone through a number of generations, or refinements, and now dominates the market for strategic performance measurement systems (PMS). BSC has certainly generated interest in the past and, more recently, enough papers for us to devote the majority of this issue to the topic. In fact we lead with four papers on BSC and then complete the issue with an academic paper on measuring performance in a steel plant, finishing with a reflective practice piece on lean thinking.
Kollberg and Elg present an interesting view of the BSC literature. They argue that much of what is written about the BSC is technical, prescriptive, and private-sector biased, but also that some disenchantment is creeping in with this approach. A more mature research agenda would include examining how managers actually design, implement and use PMS, i.e. the practice rather than the prescription. They use their experience of researching health care services in Sweden to focus on what happens in practice with the BSC. Kollberg and Elg conclude that the practice in this context is to use the BSC not in its often prescribed way, as a top-down strategic tool, but instead the organisation’s personnel should use it as a communications tool to engage in organisational change and improvement. They also emphasise that relying on a top-down approach to implementation can be problematic given the need for a high level of involvement and commitment from lower levels in the organisation in implementation’s early stages.
Barnabè, from Siena (Italy), offers an approach to mitigate one of the criticisms of BSC, namely that it is a static system. It is well known that action takes time to feed through into results, and while later generations of the BSC do have some capacity to identify connections between variables (see success maps), this does not really take into account the impact of time lags. By linking system dynamics to the BSC, Barnabè demonstrates that a dynamic approach can be developed; the example case study he provides is a service, start-up company. This additional dynamic capability looks to be a promising development that could enhance the efficacy of BSC.
Kamhawi, based in Egypt, concentrates his study on Bahrain. He examines the IT and non-IT factors that influence the adoption of BSC initiatives by companies located in the Gulf state. His investigation is particularly interesting for its use of the Delphi technique as the methodology where 67 experts on BSC provide data on the importance and capability of detailed factors that are grouped in to the two areas. Kamhawi’s view is that a key transition in BSC’s development was the recognition that management support software was critical to a successful implementation; hence his interest in the importance of IT and non-IT factors for BSC adoption. The study results show that IT factors are as important as non-IT factors.
In their paper, Valmohammadi and Servati concentrate on the topic of BSC implementation; in their circumstances the implementation of third-generation BSC. The case study they outline is a manufacturing company in their home country of Iran and they demonstrate the process of eliciting data from managers on strategic focus and measures; and use statistical techniques to prioritise and select the appropriate measures. They also show how these measures then feed into the strategy map and a strategic linkage model. The case includes the company’s destination statement and final balanced scorecard that was drawn up. As a final section of their paper the authors also carry out some benchmarking of strategic performance between the company and two competitors.
In the final academic paper, Anvari and Edwards from Manchester University take overall equipment effectiveness (OEE), a familiar concept often applied to equipment and machinery, and extend the idea to cover the overall situation in a steel plant. They argue that in contrast to OEE, their integrated equipment effectiveness (IEE) metric captures the situation in the whole plant and not just at the individual plant level. A case study is included that shows the application of IEE in a large Asian steel plant.
The reflective practice piece is authored by Posteuca, and covers his distilled experience of lean thinking and bringing about improvement in practice; experience that has been encountered through his work as a management consultant. The essence of the advocated approach is for management to adopt a consistent approach to change and improvement – management branding he calls it – and not to simply chase after the latest fashion. What seems commonsense to state is clearly not so easy to achieve – hence the need for his insightful contribution.
Tom Burgess, John Heap
Johnson, H.T. and Kaplan, R.S. (1987), Relevance Lost, Harvard Business School Press, Boston, MA
Kaplan, R.S. and Norton, D.P. (1992), “The Balanced Scorecard – measures that drive performance”, Harvard Business Review, January/February, pp. 71–9