Balanced Scorecard Implementation at Rang Dong Plastic
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International Journal of Business and Management
Vol. 5, No. 7; July 2010
Balanced Scorecard Implementation at Rang Dong Plastic Joint-Stock Company (RDP)
Luu Trong Tuan National University of Ho Chi Minh City, Vietnam E-mail: luutrongtuan@hcm.fpt.vn Sundar Venkatesh Asian Institute of Technology (AIT), Thailand Abstract From the balanced scorecard (BSC) framework, which encourages the use of both financial and non-financial measures of performance, allowing the firm to pinpoint its strategic objectives via balancing four perspectives – financial, customers, internal business processes, and learning and growth – to measure firm performance (Kaplan and Norton, 1992; Kaplan and Norton, 1996b), the paper sought to explore how balanced business scorecards were designed and to what extent of success they were implemented at Rang Dong Plastic Joint-Stock Company (RDP) in terms of its organizational structure and company philosophy. Keywords: Balanced scorecard, Performance measurement 1. Introduction Performance measurement systems aim to "integrate organizational activities across various managerial levels and functions" (McNair et al., 1989). The need for integration is supported by Hronec, who defines a performance measurement system as a "tool for balancing multiple measures (cost, quality, and time) across multiple levels (organization, processes and people)" (Hronec, 1993). Edson (1988) and Talley (1991) highlight the need for performance measurement systems to focus attention on continuous improvement. Green et al. (1991) suggest that performance measurement systems should "target the value-added activities of the company". Kaplan (1991) states that an effective performance measurement system “should provide timely, accurate feedback on the efficiency and effectiveness of operations”. Recent research has demonstrated that conspicuous links between a firm’s approach to strategic planning and its business performance exist in small as
International Journal of Business and Management
Vol. 5, No. 7; July 2010
Balanced Scorecard Implementation at Rang Dong Plastic Joint-Stock Company (RDP)
Luu Trong Tuan National University of Ho Chi Minh City, Vietnam E-mail: luutrongtuan@hcm.fpt.vn Sundar Venkatesh Asian Institute of Technology (AIT), Thailand Abstract From the balanced scorecard (BSC) framework, which encourages the use of both financial and non-financial measures of performance, allowing the firm to pinpoint its strategic objectives via balancing four perspectives – financial, customers, internal business processes, and learning and growth – to measure firm performance (Kaplan and Norton, 1992; Kaplan and Norton, 1996b), the paper sought to explore how balanced business scorecards were designed and to what extent of success they were implemented at Rang Dong Plastic Joint-Stock Company (RDP) in terms of its organizational structure and company philosophy. Keywords: Balanced scorecard, Performance measurement 1. Introduction Performance measurement systems aim to "integrate organizational activities across various managerial levels and functions" (McNair et al., 1989). The need for integration is supported by Hronec, who defines a performance measurement system as a "tool for balancing multiple measures (cost, quality, and time) across multiple levels (organization, processes and people)" (Hronec, 1993). Edson (1988) and Talley (1991) highlight the need for performance measurement systems to focus attention on continuous improvement. Green et al. (1991) suggest that performance measurement systems should "target the value-added activities of the company". Kaplan (1991) states that an effective performance measurement system “should provide timely, accurate feedback on the efficiency and effectiveness of operations”. Recent research has demonstrated that conspicuous links between a firm’s approach to strategic planning and its business performance exist in small as