Application of balanced score card as a strategy management process tool by Kenya petroleum refineries limited
The importance of strategy in the current dynamic and turbulent business environment cannot be overemphasized. The world has moved from the stable environments of the mid twentieth century to fast changing and turbulent business environment that needs organizations to have continuous and consistent strategies to survive. Strategy management process comprises strategy formulation, strategy implementation, and its evaluation and control. Various methods have evolved to assist firms in the strategy management process. The Balanced Scorecard method is one such method that has taken root from its early inception by Kaplan and Norton in 1992 to the current third generation that has evolved into a fully dedicated institution worldwide to assist firms in the strategy management process. The Balanced Scorecard consists of four perspectives that is, financial, customer, internal business process and learning and growth. It is a management tool that provides stakeholders with a comprehensive measure of how the organization is progressing towards the achievement of its strategic goals. It has been used as a means to clarify and translate vision and strategy, provide communication and linkage, plan and set targets and provide strategic feedback and learning. Kenya Petroleum Refineries Ltd has been using the BSC since 2007, a tool that has enabled the company to monitor progress in the implementation of its five year business plan. The objectives of this study were to establish how Kenya Petroleum Refineries Ltd has applied the balanced scorecard as a strategy management tool across its business and to establish the factors influencing the application of BSC. To this end, a case study was carried out and management staff interviewed. The findings indicate that the balanced scorecard has enabled the company to link corporate strategy with key performance indicators (KPIs) at the departmental, and employee level, and communicate them across the company and has revolutionized the staff appraisal system. Some challenges have been faced including inadequate training on the BSC, lack of sustained effort to remind employees on its importance.