Kanji's Business Scorecard

Abstract

The balanced scorecard was first devised by Kaplan and Norton (1992, Harvard Business Review, Jan.–Feb., pp. 71-79) as a measurement framework that was expected to overcome some of the deficiencies of traditional performance systems. It gives a holistic view of the organization by simultaneously looking at four important perspectives (financial, customer, internal processes, innovation and learning). Apart from being a measurement framework, the balanced scorecard achieved recognition as a strategic management system. The new approach to performance measurement suggested in the balanced scorecard is consistent with the initiatives under way in many companies: cross-functional integration, continuos improvement, customer–supplier partnerships and team rather than individual accountability. In this sense, it fits well into the quality management philosophy, embracing some of the business excellence principles of Kanji's Business Excellence Model. Nevertheless, the balanced scorecard, as presented by Kaplan and Norton, is not without limitations. The causality links suggested among the four perspectives are particularly problematic and ambiguous. Additionally, it fails to recognize explicitly the contributions of important stakeholders, such as employees and suppliers. Taking into account the potentialities and limitations of the traditional balanced scorecard, we propose the development of a new framework integrating the elements of Kanji's Business Excellence Model (Kanji, 1998, Total Quality Management, 9, pp. 633-643) and taking advantage of the strengths of its sound methodological support. The business scorecard may be improved by integrating the total quality management principles and critical success factors that constitute Kanji's Business Excellence Model. The Kanji's Business Scorecard (KBS) we present in this paper is not only a conceptual model, but also a measurement model. Furthermore, Kanji's approach has the potential to give a deeper understanding of how achievements in the different areas feed each other to form a cycle of continuous improvement. Finally, the implementation of KBS can help organizations to develop, cascade and implement a strategy for business excellence.