Abstract
The Balanced Scorecard (BSC) is a performance measurement and strategic management system which appearssuitable for use by all types and sizes of business. The BSC’s greatest strength for most businesses comes fromits innate ability to integrate financial and non-financial measures together by measuring both strategic andbusiness performance across four interrelated perspectives. Many studies have shown that the BSC can besuccessfully implemented within large-scale companies and organizations. However, there is limited empiricalevidence regarding the use of the BSC within small companies. This study adds to the existing literature byreporting the results of a comparative investigation of BSC awareness and use within small companies located inthe UK and Cyprus. In addition, the study examines the reasons for non-adoption by small companies andwhether these companies use performances measures that are similar to those typically contained within the BSCmodel. The research data was collected from self-completed questionnaires that were distributed to 500companies in the UK and Cyprus. The findings of the survey suggest that the majority of small companies,especially in the UK, are unaware of the BSC, and consequently levels of BSC usage are extremely low. Certainrespondents believed that BSC is an unsuitable tool for small companies and that its implementation is beyondthe resources available to such entities. However, the findings also suggest that even though very few smallcompanies actually use the BSC, many such companies appear to use performances measures and indicatorssimilar to those typically included within a BSC model.
Highlights
The Balanced Scorecard (BSC) is a strategic performance management system used by many companies in the international business environment
While there is an extensive literature that explores the use of the BSC in large companies, there is a lack of empirical evidence regarding the use of the BSC in small companies
This study examined whether small companies in the UK and Cyprus were aware of the BSC and whether these companies have implemented and used the technique
Summary
The Balanced Scorecard (BSC) is a strategic performance management system used by many companies in the international business environment. According to Kaplan and Norton (1992; 1996a), the creators of BSC, this tool can balance both the financial and non-financial measures that a company uses It is separated into four perspectives – customer perspective, internal business perspective, innovation and learning perspective and financial perspective. In terms of the first two questions, regarding the average annual turnover and the number of employees of the company, all of the UK companies surveyed had a turnover up to £6.5 million and no more than fifty employees This is in line with the criteria defining small sized UK companies discussed in sections 1 and 3. The principal activity for 65% of the companies was the provision of services; 15% were wholesalers, with the remainder being construction and manufacturing companies
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