The Balanced Scorecard and Enterprises’ Performance Evaluations: The Saudi Context

Abstract

The balanced scorecard is one of the most important and effective tools for evaluating the performance of companies by combining financial and non-financial measures. The research aims to study the effect of applying the balanced scorecard on evaluating the performance of small and medium-sized Saudi companies. Despite the benefits of applying the balanced scorecard, previous studies on this topic are limited. In particular, there is little research on small and medium-sized enterprises in the developing countries, such as Saudi Arabia. A questionnaire was developed and distributed to a random sample that consisted of 76 respondents from various sectors (the commercial, service, and industrial sectors). Using a descriptive analytical method, the results showed that applying the balanced scorecard has an impact on the process of evaluating the firm performance, which is reflected positively in the competitive advantage. The companies under study are keen to adopt the scorecard in order to attain first the customer dimension, followed by internal processes, learning and financial dimensions. The balanced scorecard is being implemented more in medium-sized companies as compared with small ones. This study contributes to providing a clear vision for managers, decision-makers, and researchers to help them understand the importance of implementing the balanced scorecard to improve the performance of companies.