Balanced Scorecard as a Tool of Strategy Implementation at Kenya Commercial Bank Kenya Ltd

Abstract

Many organizations formulate good strategies but fail to implement them successfully, Lynch (2000). Some reasons given for this predicament include failure to link the strategy to the vision and mission of the organization, lack of dedicated top leadership, lack of resources, objectives that are not linked to departments or individuals doing them. The balanced scorecard is a performance management tool developed by Kaplan and Norton in 1992 to assist organizations to implement strategy. It has four distinct perspectives which are crucial in the 360-degree view of the strategy. The four perspectives include financial perspective, which focuses on profitability and financial growth of the organization. Secondly is the customer perspective which focuses on the customer satisfaction, retention and growth of customer base numbers. Thirdly is the internal processes which focuses on efficiency and effectiveness of the internal systems with the aim of process reengineering. Lastly the learning and growth perspective which focuses on the continuous improvement and the sharing of knowledge in organizations. The objective of the study was to establish how Kenya Commercial Bank Limited uses the balance scorecard to implement strategy. The study found that it uses the balanced score card with all the perspectives carrying weighting depending on where and what the staff is doing. The corporate strategy is communicated to staff and this informs the decisions on the development of the personalized balance scorecards. Staff is given targets at the beginning of the year which is reviewed on quarterly and yearly basis. There is need to involve all staff in the development of the balanced scorecard.