Design and implementation of balanced scorecard in the development bank of Ethiopia
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Date
2014-06
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Addis Ababa Universty
Abstract
The purpose of the study was to assess the design and implementation of Balanced Scorecard in Development Bank of Ethiopia and thereby to see the adequacy of the procedure to design Balanced Scorecard, the extent of Balanced Scorecard implementation success and identify the major challenges encountered during the design and implementation process and then provide alternative recommendation to the identified challenges. To attain these objectives, the study employed descriptive survey method. Accordingly, survey questionnaire and interviews questions were prepared and pilot tested and administered to a sample of 134 subjects which are composed of 8 Process Heads and 126 Core Process Officers, Support Process Officers, Manual and Technical Skill employees. A total of 120 (90%) of questionnaires were properly filled in and returned. Interview and document analysis were also made to complement the information obtained. All the closed ended questions of the questionnaires were analyzed quantitatively using frequency count, percentage and Pearson chi-square test whereas the data obtained from open ended questions, interviews and document analysis were transcribed to supplement the quantitative data. The result of this study indicated that the readiness for Balanced Scorecard design and implementation made by the bank was Commendable. The designing phase was done properly in terms of strategic plan preparation, theme identification, and strategic perspectives, corporate objectives and measures preparation. The relevance of Balanced Scorecard is not questionable as response by majority of respondents’ show. In fact, it was also good in terms of corporate scorecard alignment with processes and strategy. With regards to Balanced Scorecard implementation, it was in a decent stage at corporate level and at process level; however, it was at early stage in individual level. Lack of adequate knowledge on Balanced Scorecard, insufficient participation, lack of consistent monitoring and evaluation, gaps in setting measurement and targets in the cascading process, resistance to change and in ability to automate the implementation process are the major problems. Thus, to alleviate the above challenges recommendation were forwarded. It is recommended that the bank has to create enabling environment to increase the involvement of employees, revise the cascaded objectives, automate the implementation process and organize discussion as well as awareness creation program to check and recheck the implementation process.
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Keywords
DBE, Performance Management, Balanced Scorecard