International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online) Vol. 7, Issue 2, pp: (1419-1424), Month: October 2019 - March 2020, Available at: www.researchpublish.com
The Balanced Score Card (BSC) approach to measuring performance in Service Firms in Nigeria: A Theoretical Perspective Lucky Izobo ENAKIRERHI1, Idowu EFERAKEYA2, Miebaka BIG-ALABO3 1& 2
Department of Accounting, Banking and Finance, Faculty of Management Sciences, Delta State University, Asaba Campus 3
Department of Accounting, Faculty of Management Sciences, University of PortHarcourt, Choba, Nigeria Corresponded author’s email: enakirerhil@yahoo.com
Abstract: The paper focuses on the Balanced Score Card (BSC) approach in measuring performance. It examines the non-quantitative measure used in measuring the performance of organisations with particular reference to service oriented businesses. It advocates that service firms should actualise their objectives through a BSC approach with more emphasis on customers’ perspective, internal operational process perspective, and learning & growth perspective. Seemingly, competition is rife in every industry, as such for a firm to remain competitive in the service industry, adoption of the Balanced Score Card approach should be a priority. Focusing on financial measures alone (which showcase the past performance of a firm in financial terms) is considered not only inadequate but also insufficient to realise long term success. Thus, it highlights several measures of assessing a firm from different perspectives which are necessary for overall performance in the future. This approach bridges the current and the future. The paper concludes that the adoption of BSC approach would affect decision management systems in a firm by improving upon and changing the traditional information system to be more modern and adaptive, thus creating systems that can be more analytic and agile. Keywords: Balanced Score Card, Decision Management System, Service Firms.
1. INTRODUCTION Researches on service business entities in recent time have reported that performance measurement often focus on easily quantifiable measures such as profitability while neglecting other dimensions which are important to competitive success of a firm. Change has not spared disruptions in service firms’ processes and activities. The system of performance measurement in organization is not in any way in a state of inertia, but steadily being tweaked to conform to new information need occasioned by change dynamics in the business environment. Interconnectedness of countries through globalization has helped to sustain the world economy which is also having a fair share of the change effect. In the world economy as of today, there are increased challenges of how organisations can successfully implement performance management framework since traditional and quantifiable measures such as profitability are no longer sufficient, whether the firm is a profit or non-profit making organisation, charity or governmental establishment. Performance is the end result of a firm activity for a given period of time, and can be measured against the firm’s target, other firms’ results in the same industry and over a period for the same firm. Measuring performance enables firms to scan through the operational process and compare goals and objectives with performance. Performance measures are normal and integral part of the management process of any organisation. It enables management to effectively evaluate operational efficiency in the course of business operation (Adeniji, 2008). For example, academic dons would normally measure performance of students by written examinations or course work. However, these primary modes of performance measures are grossly inadequate as there are other factors such as time contact with students, learning attitude of students, regularity of attending classes and the perception of the tutor on how diligent students understood and are following each lesson that could be used to measure students’ performance and which are also critical to students productivity (Adeniji, 2008).
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