Balance score card as a strategic management tool in the plastics manufacturing industry in Kenya
Oyieyo, Evans O
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The Balanced Scorecard (BSe) approach to performance measurement has increased in popularity due its strategic use of key non-financial measures along with the more traditional financial metrics. The purpose of this study was to establish the use of balance score card as a strategic management tool in the plastic manufacturing firms in Kenya. The study outlined the process of development, implementation, and usage of the Bse in plastic manufacturing firms in Kenya. The existing literature on the Bse concept was extensively reviewed. Questionnaires survey was conducted among Bse implementation team members in companies that have implemented Bse in the last three years. Descriptive data analysis was used to analyze the data. The study results indicate that the main objective of performance measurement system among respondent firms is to balance profit, growth, and control while minor ones include balancing opportunities, management attention and balancing the motives of human behavior. The main management motivations for implementation of BSe in plastic manufacturing firms in Kenya included initiating change process, broadening of the performance measures and facilitating the integration of business plans with the financial plans. Making visible trade-off between long-term growth and short-term improvements were ranked as the important drivers of management decision to implement Bse. The difficulty in assigning weightage to the different perspectives and establishing cause and effect relationship among them has been found to be the most critical issues in the implementation of the Balanced Scorecard among plastic manufacturing companies in Nairobi. The main conclusion is that the plastic manufacturing companies used all the four perspectives as recommended by the theory. Further, though faced with numerous challenges, implementation of BSe as a strategic management tool among manufacturing firms enhanced key organization performance dimensions. The Balanced Scorecard is therefore a very important strategic management tool which helps an organization to not only measure the performance but also decide/manage the strategies which are needed to be adopted/modified so that the long-term goals are achieved. The challenges in the current study point to the fact that Bse is not easy to implement because its complex and also involves a lot of subjectivity. This means that a lot of refinement is still required to be done on the tool so that it becomes understandable to every stakeholder associated with the organization and the subjectivity is removed to a large extent. Due to the limited scope of the present study, a large number of research issues have not been attempted but are identified in the course of the study. The role of plastic manufacturing firms culture in the successful implementation of the Balanced Scorecard and the relationship between the Balanced Scorecard adoption and financial performance of a firm are some such potential issues for future research.