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Other Critics Including Gautreau And Kleiner (2001) Have Suggested That ...

Other critics including Gautreau and Kleiner (2001) have suggested that demand for new and innovative business models combined with a degree of veneration has raised expectations of what the scorecard can effectively deliver and as a result there is a danger of using the scorecard to replace a genuine systematic set of performance measures. In other words implementation of such a system should be done only where a systematic set of performance measures do not already exist.


Case Study implementing a Balanced Scorecard

Arran Ltd is a financial services firm, who introduced a Balanced Scorecard as a Performance Measurement System for its Retail division. The objective was to provide core management information on performance of the retail branch. It was led entirely by an in house development team and built partly round bespoke performance management software. Initially it was successful, and as a result it was implemented company wide throughout the group.

Over a period of time, a corporate Scorecard and several other divisional Scorecards were developed using the retail division design and systems as their basis. It is clear that the Scorecards developed subsequent to that designed specifically for the retail division were less successful, and over time became less valuable. It is a fair conclusion that the Scorecard approach became marginalised and as only the various financial perspectives of the Scorecard were being used, therefore losing the holistic principles and many benefits the Scorecard approach is meant to deliver. It is argued that the problems derived primarily from Arrans' inability to adjust to changes in market conditions because of the disjointed nature of the performance system.

At the beginning of this report it states that there is a gap between strategy and execution when adopting these models and this is a classic example. A key component to corporate planning is the use of standardised vocabulary, and it clearly works when applying that principle to a local business area. However the adoption of a standard content for this type of model is less likely to be helpful, as it risks diminishing the local relevance of each Scorecard and therefore its important to make the application of the cards local within a wider framework to ensure maximum buy in, as suggested by Brewer (2003). This full case study is available at 2gc.co.uk.

In conclusion Balanced Scorecard

When introducing this type of business model, organisations must first become clear about their objectives, then use a design and design process appropriate to these objectives.
In the case of Arran, the reason that the Scorecard implemented in retail division was successful was because it was the right tool for the right purpose.

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