Challenges of Balanced Scorecard Implementation Strategy in Selected Banks in Ethiopia
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Date
2023-02
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Addis Ababa University
Abstract
BSC is necessary to ensure an efficient banking system that can play a vital role in the successful implementation of the monetary and economic policies of a country. This study assessed the Balanced Scorecard (BSC) implementation strategy and its associated challenges in selected banks in Ethiopia. To deal with the problem under investigation, a quantitative and qualitative research design was employed. The quantitative data and qualitative data gathered from five selected banks was analyzed using descriptive and correlation analysis. A total of 240 sampled participants were selected using the stratified random sampling technique to conduct this study. The questionnaire and interview checklist data collection methods were also used to analyze its implementation and related challenges. Thus, this study found that the dominant BSC implementation strategy was operational BSC, communication, and training but gave less consideration to monitoring and evaluation. As a matter of fact, the correlation analysis showed that implementation strategy and strategic alliance positively affected the outcome of BSC but was deterred by challenges. Further, this study revealed that the major challenges of implementing BSC in banks included a lack of developing a suitable link between the employees' reward system and the organization’s KPIs and a lack of employee commitment. This study concluded that implementation strategy and strategic alliances play a great role in effectively implementing BSC by reducing challenges. Consequently, this study suggests that banks should review their BSC implementation strategy, enhance their inclusion of well-defined BSC implementation elements, and clearly invite BSC implementation measures