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