| To be successful, organisations must prove | | | | BSC is applicable to any type of organisation, albeit |
| themselves to be indispensable to their customers, | | | | with modifications. For example, a BSC for non-profit |
| be attuned to their employees' needs, be willing to | | | | organisations must be modified to include a mission |
| partner with their suppliers, and be considerate of the | | | | perspective and any other additional perspectives |
| social, environmental, and safety outcomes of their | | | | which provide specific information on social |
| performance. These rather new and expanded | | | | demographic factors regarding the organisation's |
| objectives of business operations, are the main pillars | | | | environment. Viewed as a performance measurement |
| of business excellence. | | | | system (PMS), the BSC is not a new tool as PMSs |
| Samson and Challis (2002) studied leading international | | | | have existed for a long time in all organisations and in |
| organisations in an effort to determine why some | | | | most cultures, in one form or another. Hence the |
| were more successful than others in their pursuit of | | | | novelty of the BSC does not reside in its existence |
| excellence. They identified a total of 14 principles that | | | | but rather in the attempt to achieve standardisation |
| served as catalysts for business excellence. The | | | | via conventions and universal rules (Urrutia de Hoyos, |
| extent to which each organisation embodied these | | | | 2001). |
| principles appeared to be directly related to the | | | | The BSC's most standardised antecedent is the |
| speed of its journey towards excellence. | | | | "tableau de bord" (Mallo and Merlo, 1995), a tool |
| Furthermore, the EFQM Excellence Model, which is | | | | utilised principally by French companies, and whose |
| used to adjudicate the European Quality Award, and | | | | configuration and conceptual basis is very similar to |
| the most frequently discussed model in quality | | | | the BSC. One explanation for the lack of |
| literature (van der Wiele et aI., 1995, 2001), uses | | | | standardisation of PMSs along the line of the tableau |
| self-assessment as a tool to identify organisational | | | | de bord and BSC is certainly the lack of publicised |
| strengths, as well as areas in which there exists | | | | information regarding their existence due to its being |
| room for improvement. Its outcome is a structured | | | | an excessively strategic tool; due to their strategic |
| plan for amelioration, which is subsequently monitored | | | | nature, organisations are very reluctant to disclose |
| for progress. In addition to this self-assessment | | | | their existence and utilisation. |
| component, the EFQM assists organisations with their | | | | Development of the BSC |
| continuous improvement initiatives by facilitating | | | | The development of the BSC has gone through |
| gauging of progress against measures of total quality | | | | three distinct phases. |
| management, identification of improvement | | | | The First phase |
| opportunities benchmarking and organisational learning | | | | Initially the BSC was intended as a measurement tool, |
| (McAdam and Kelly, 2002). | | | | with an operational and tactical focus. It was a |
| Truly effective use of the excellence models for | | | | collection of indicators arranged by perspectives or |
| continuous improvement requires the input of | | | | key areas, which permitted the identification of the |
| management and employees. For maximum benefit, it | | | | determinants of the performance of a business. The |
| must be effectively marketed by top management | | | | original objective was to overcome the limitations of |
| and internalised by the staff of the organisation (van | | | | using only financial indicators. These last only provided |
| der Wiele et aI., 2000). Also, to be optimally | | | | information about actual, past performance, and failed |
| effective, quality improvements should be prioritised | | | | to provide information on the drivers of future |
| and should focus on the results category of a | | | | performance (Kaplan and Norton, 1996). The four |
| business excellence model such as the EFQM | | | | BSC perspectives - financial, customer, internal |
| Excellence Model (EFQM, 1999; Seghezzi, 2001), the | | | | processes, learning and growth - were selected on |
| Malcolm Baldrige National Quality Award (MBNQA, | | | | the basis of the results of a study by David Norton |
| 2002), or the Canadian Framework for Business | | | | and Harvard University (Kaplan and Norton, 1992). |
| Excellence (CFBE, 2002). | | | | The Second phase |
| Quality management | | | | In the process of identifying indicators for each of |
| The family of ISO 9000 standards can be regarded | | | | the four perspectives, it was discovered that by |
| as the foundation on which organisations can build | | | | developing strategy maps, not only could the |
| their excellence programs. The success of a quality | | | | appropriate indicators be identified, but also |
| management program that builds upon the foundation | | | | management could utilise the BSC for strategic |
| of the ISO 9000 system has been said to relate to | | | | planning. In the first phase, indicators were identified |
| the original motivation for registration (van der Wiele | | | | subsequent to the development and definition of the |
| et aI., 2001). The message is that the added value | | | | organisation's strategy, and had an operational and/or |
| that an organisation derives from the ISO 9000 | | | | tactical focus. During this phase, it was discovered |
| standards should be a result of that organisation's | | | | that it was not enough to simply identify indicators, it |
| motives for, and approach to, implementation (Cobb, | | | | was also necessary that the indicators were |
| 2003; Gotzamani and Tsiotras, 2002; Singels et aI., | | | | extracted directly from the strategic plan. This so as |
| 2001). Issues such as organisation, internal and | | | | to identify, and explicitly describe, the causal |
| external communications, employee awareness of | | | | relationships with the organisation's strategy. In other |
| quality, product conformance and customer | | | | words, the indicators were identified prior to the |
| satisfaction are all addressed within the ISO 9000 | | | | development and definition of the organisation's |
| system, simplifying management commitment to | | | | strategy, and as such playa key role in the |
| quality. This can be a driving force to go beyond and | | | | development and definition of the strategy. The act |
| achieve business excellence. However, if not done | | | | of measurement has consequences that exceed |
| properly, it is also possible that implementation of ISO | | | | simply providing information on past results. It also |
| 9000 may lead to excessive emphasis on the | | | | directs attention to the future, since the indicators |
| documented procedures and less emphasis on | | | | selected by management are 'de facto' those which |
| achieving business objectives (Gotzamani and | | | | are important to management. Hence, with a clearly |
| Tsiotras, 2002). | | | | defined strategy, coherently communicated and |
| The importance and relevance of quality cannot be | | | | aligned with change drivers, what was initially an |
| overstated. In recent decades, public, private, and | | | | information/measurement tool, and part of the |
| third-sector organisations have been awakened to | | | | management control function, was converted into a |
| the necessity of creating and ensuring quality in | | | | tool for strategic management (Kaplan and Norton, |
| every aspect of their operations. Far beyond | | | | 2000) and a part of the strategy formation process. |
| "permitting things to run smoothly", an emphasis on | | | | The Third phase |
| quality in management systems is now considered | | | | The BSC communicates the organisation's strategic |
| essential to an organisation's prosperity. Globalisation | | | | plan via maps in which the cause-effect relationships |
| and an enhanced concept of corporate liability are | | | | between the different strategic objectives can be |
| two important societal trends contributing to this | | | | visualised. This permits management to utilise the BSC |
| emphasis on quality. There are numerous reports in | | | | as a tool for change management leading to the |
| the literature that describe quality management | | | | achievement of Business Excellence. |
| practices and the benefits that emanate from | | | | Conclusion |
| implementation of an ISO 9000 system. Many of | | | | This article explored the broad issues related to |
| these are case studies or reports of the benefits and | | | | business excellence and the application of ISo 9000 |
| drawbacks of such systems. The emphasis is on | | | | and the BSC as the first steps in achieving excellence. |
| continuous improvement which is beyond simple | | | | ISO 9000 and the BSC aim at assisting firms to |
| conformance to the ISO 9000 standards. | | | | develop systems and procedures which allow them |
| The Balanced Scorecard | | | | to achieve business excellence by becoming more |
| The Balanced Scorecard (BSC) is an instrument which | | | | customer-oriented. The implementation of such |
| translates the mission and strategy of an organisation | | | | systems requires on-going support from senior |
| into a broad collection of action metrics and | | | | management; taking into consideration the role of |
| indicators, and which subsequently provides the | | | | internal reporting and operational control systems to |
| structure necessary to serve as control and strategic | | | | monitor and proactively adapt to changing business |
| measurement system (Kaplan and Norton, 1996). The | | | | needs. |