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