Balanced Scorecard as a strategy implementation tool at AAR Kenya Ltd

Abstract

The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. For most organization formulating strategy is one of the easiest part but implementing the strategy is the hardest part. The balanced score card is a tool that was developed by Kaplan and Norton in the early 1990s to help organization in implementing strategy. Balanced score can enables organizations to a align the vision and strategy with activities of each individual employee in the organization. With the use of balanced score card employees are able to see where they fit in the overall vision of the organization and their contribution towards realizing the organization strategy. The objective of this study was establish how AAR Kenya Ltd uses the balanced score card to implement strategy and also find out the challenges the organization has faced and how it has dealt with those challenges. The study found out that AAR Kenya Ltd has been using the balanced score card for the last five years and it has reap immense benefits. The organization according to the study uses all the four perspectives of the balanced score card; Internal business process, customer perspective, Financial perspective and learning and growth perspective. When developing the KPIs for each employee the organization puts a weighting that has a bias on the employees area of operation in the organization. The study recommended that there is need for further training to employees to deepen the understating of the balanced score card by all within the organization and what is expected from each of the employee in contributing to the overall organization goals. The study also recommended automation of the balanced score card process to ease the tedious process of employees filling data manually. This will also create more objectivity and avoid chances of manipulation to achieve better scores.