Application of balanced score card in creating competitive advantage at Kenya commercial bank limited
The main objective of this study was to determine the competitive advantage associated with the application of balance score card by Kenya Commercial Bank. The Kenya Commercial Bank adopted this tool to manage performance and implement strategy in the year 2005. The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals thus creating a competitive edge. The objective of this study was to determine the application of this tool to this end and if there are any challenges that have been faced in the process. To achieve this purpose, a qualitative research design was carried out. The interviewees were human resources director, the chief finance officer, the corporate banking director, the country head of treasury and the chief operating officer. The findings indicate that the balanced scorecard has been a useful tool for bringing the attainment of the mission of the Bank. This was explained by the ability of this tool to bring consensus around the vision and therefore chart the way for its execution. Some challenges have been faced including resistance to change, lack of sufficient knowledge of the staff, aspects of operation that are difficult to measure and lack of objectivity in appraisal of staff. The study concludes that Kenya Commercial Bank serve as a good example of effective application of Balanced Scorecard. The Balanced Scorecard adopted at Kenya Commercial Bank addresses strategic issues regarding beneficiary/ stakeholders, financial stewardship, building processes and organization capacity. This Balanced Scorecard seeks to point the organization towards improved performance and increased contribution to social values. The study recommends that the Kenya Commercial Bank continuously improves on the balanced scorecard technique in order to remain relevant not only to its own operations but also to the changing macro-environmental dynamics. Some of the inadequacies of the technique have been attributed to lack of sufficient training of staff involved, in order for them to derive from the vision of the bank measures that not only reflect what their day to day work entails, but also ensure that these are SMART. To this end, it is suggested that more training of staff is required. The study suggests that further research can be done to determine whether the separation of rewards (bonus payment) from performance management via the balanced scorecard can help achieve the process of performance management through strategy implementation.