Challenges of the Implementation of Balanced Score Card in Ethiopian Insurance Corporation

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Date

2018-06-18

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Addis Ababa University

Abstract

Organizations compete in a very complex and challenging context that is as a result many factors from globalization, aggressive competitors and rapid change in technology among others. For organizations to gain and maintain a competitive edge they must be able to develop and execute strategic plans with precision. One of the major tools that help achieve this is the balanced score card. The balanced score card was developed in early 1990’s by Kalpan and Norton and was designed to give companies the information needed to effectively manage their business strategy. It has additional perspectives other than the traditional financial perspective which include customer, internal business process and learning and growth. The implementation of the tool however, has been a challenge to many organizations. Hence the main purpose of this study was to determine challenges of the implementation of balanced score card in Ethiopian Insurance Corporation. The research approach used in this study was the mixed methodology, in which the qualitative as well as the quantitative research methods were used. In the qualitative research method interviews were conducted from the BSC project team members where as in the quantitative research questionnaire is used for the employees of the corporation. Some of the benefits of adopting the tool were that it enabled staff to focus on measurable targets, ability to focus on key objectives, assisted on putting emphasis on specific key measures, helps in monitoring of key performance. The Implementation of balanced score card has however had challenges which include but not limited to lack of clear understanding of the balanced score card, poor leadership involvement, lack of training to staff, poor IT support, lack of representativeness of the BSC project team, lack of involvement of the whole organization, poor planning and lack of proper communication and resistance of BSC. The findings of the study should be understood and valuated in light of limitation of the study. The study highlighted organizational practice recommendations to overcome challenges of implementation of the balanced score card.

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Keywords

organizational practice recommendations, Organizations compete, organizational practice recommendations

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