Application of the balanced score card as a strategic management tool at the Kenya bureau of standards

Abstract

The Balanced score card concept was first introduced by Kaplan and Norton (1992) as a set of measures that give top management a comprehensive view of the business from four perspectives; financial, customer, internal business process, and learning and growth. The balanced scorecard is a strategic management tool used to communicate the vision and strategy of an organization, where strategy is translated into a set of performance measures that are used to monitor and evaluate the strategic direction of the organization. The purpose of this study was to examine the application of the balanced scorecard as a strategic management tool at the Kenya Bureau of Standards and the challenges faced in adopting the tool. This study was conducted through the use of a case study. An interview guide was used to collect primary data from executives charged with developing and cascading of the balanced scorecard. Secondary data was obtained from the Kenya Bureau of Standards corporate score card and the strategic plan. Content analysis was used to analyze the data. The study established that KEBS has adopted the balanced score card as strategic management tool for purposes of communicating, implementing and monitoring and evaluation of strategy. The scorecard has four perspectives as developed by Kaplan and Norton but also incorporates corporate social responsibility and sustainability within the four perspectives. The balanced scorecard also doubles as performance contract between the employees and the organization. Further, the study identified a number of challenges faced in the application of the balanced score card in KEBS. Some include; Resistance among employees, lack of understanding on how the scorecard works and ineffective reward system. This study in light of challenges faced recommends that KEBS embarks on continuous awareness trainings on the balanced scorecard and overall KEBS strategy to enhance understanding, review its reward policy and customize the BSC to suit its needs. Study limitations are also highlighted including contextual and methodological limitations, the study also recommends areas for further studies.