Challenges and Prospects of BSC Implementation in Ethiopian Airlines
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Date
2024-12-07
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A.A.U
Abstract
Originated by Kaplan & Northern in 1990, Balanced Scorecard has become one of the
most widely accepted and used performance measurement and Strategic Management
and translation tool. BSC is a model with four perspectives having set of measurements
for each ones. Its theoretical theme is basically to create a balance between financial
and non-financial measures and then to achieve a comprehensive approach to manage
the organization in general and its activities in particular. There have been ample of
studies conducted on the theoretically sound concepts of BSC and the benefits that an
organization could derive from. However, the practical aspects of and challenges
encountered in implementing in specific socio-economic environment seems getting
insufficient literature coverage. It Would, thus, very interesting to examine the specific
challenges a company, like Ethiopian Airlines, actually encounters while deciding to
adapt and implementing BSC and look for rooms/ prospect for improvement by making
it better applicable.
This case study is based on the information gathered from semi-structured interview of
three most senior management persons and semi-structured questionnaires
disseminated to HR Managers, Operational Directors and Managers of MRO and
Ethiopian Aviation Academy. Based on the discussion and the written responds of
purposeful non-random samples, the writer of this paper wanted to address the
challenges and prospects of Ethiopian Airlines in adapting and implementing Balanced
Scorecard. The empirical materials are analyzed in the form of qualitative study using
more of interactive approach.
Academic literature about Balance Scorecard have been reviewed in theoretical part of
this study. Considering it as a system, this study attempted to establish the relationship
between a company and Balanced Scorecard system
. The empirical study. result revealed that Ethiopian Airlines took longer time than
required to actually implement BSC as its performance management and strategic
execution tool. It is a way behind mainly because the level of preparation and BSC
developmental process in conceptualizing its very essence to all involved were not
sufficiently explored to generate the desired positive impact.
Based on the BSCs theoretical review and the empirical study result, the writer has
concluded that implementation of BSC in Ethiopian Airlines needs to be deeply nurtured
so that conceptualizing its core essence would enable those involved to properly and
effectively implement it. It also need to strongly work on aligning BSC with long-term
strategic implementation process by concretely applying Kaplan and Norton 's four step
model of how to manage the company strategy.