Application of balanced scorecard as a tool for strategy evaluation and control by pharmaceutical manufacturing firms in Kenya.
Wanyutu, Joan W
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The Balanced Scorecard (BSC) has evolved from an important tool used to measure the performance of an organization to a strategic performance management framework that allows organizations to manage and measure the delivery of their strategies. In order to determine the effects of strategic management elements on business performance, it is important to carry out evaluation and control on such elements. One cannot control what cannot be measured hence these elements need to be measured. The BSC has evolved into a model that aids organizations in strategy evaluation by harnessing its multiple benefits. The pharmaceutical manufacturing industry in Kenya is operating in a very competitive environment and as such it is important for these firms to apply strategies that will enable them to gain SCA. The research question in this project was to find out to what extent the Pharmaceutical Manufacturing firms in Kenya applies BSC in strategy evaluation and control of strategy. The research was a cross sectional study that aimed to carry out a census of all the nineteen pharmaceutical manufacturing companies registered by PPB. The questionnaire was directed at one senior top level manager, hence the study aimed at getting nineteen respondents out of which fourteen responded. The method of application of the questionnaire was self-administered and was distributed by drop and pick method. Data analysis for the data from the closed ended questions, that is quantitative in nature, was done by use of descriptive statistics. Data obtained from the open ended questions contained qualitative data, same to the secondary data that was reviewed. This qualitative data was analyzed by content analysis. From the findings of the study, it can be concluded that Pharmaceutical Manufacturing firms in Kenya have not fully embraced balanced scorecard as strategy evaluation and control tool, despite the fact that it has effects on their strategy. The study also found that the financial and customer perspectives of BSC were rated as evaluated to a great extent while the innovation and learning and internal business processes perspectives were rated to a moderate extent. Based on the study findings, it is recommended that employees should be involved in the whole process of evaluation of the balanced scorecard. Training should be organized for staff so that they learn more about the concept and fully buy in for the Pharmaceutical Manufacturing firms in Kenya to achieve the full benefits of the balanced scorecard. Effective and open communication with employees on the purpose and use of balanced scorecard as a tool for strategy evaluation and control should be incorporated. Communicating with the employees in the right way will help them understand balanced scorecard and how they can use it to improve their performance and more so boost their strategy. This study focused on the assessment of the effects of balanced scorecard in the evaluation and control of the strategies at Pharmaceutical Manufacturing firms in Kenya, it is therefore recommended that similar research could be replicated in other sectors and the results be compared so as to establish whether there is consistency on the effects of balanced scorecard in the evaluation and control of their strategies