Balanced Scorecard for Prof. Håkan Pihl – Non-financial Measurement
Course:BUSN62Accounting Management and Control
Authors:Andersson, Jacob – 881021-4034
Olandersson, Björn – 880113-3953
Wester, Simon – 870428-7476
Since 1990s accountability in higher education has become a challenging issue for Universities. Institutions need to provide performance indicators to their stakeholders, mainly students and governmental bodies. One effective way of making sure that an organization moves in the right direction is the Balanced Scorecard (BSC).
The Theory of the BSC was introduced in 1992 in an article written by Robert S. Kaplan and David P. Norton (Kaplan & Norton, 1992). The Scorecard is intended to create a balance between financial and nonfinancial goals in a company. The BSC mission is also to translate strategies into organizational goals and provide easily measured metrics to monitor whether the objectives are achieved. It was created as a set of measures for managers to get a quick but comprehensive view of their business in order to facilitate the control of the company. Metrics within the scorecard should be evaluated regularly and can be used as a base for a reward system. The theory is critical of the previous research mainly focused on financial metrics such as sales and profitability. Kaplan and Norton (1992) argue that financial management only focuses on the past and not the future possibilities, such as customer satisfaction and employee development. To achieve long-term profitability a company should instead be focused on four areas:
* Financial - How do we look to shareholders?
* Internal business process - What must we excel at?
* Learning and growth - Can we continue to improve and create value? * Customer - How do customers see us?
Purpose and method
This paper aims to prepare a Balanced Scorecard for Prof. Håkan Pihl Dean of Department of Business Administration. The scorecard is created by combining relevant theories with the institution´s vision and strategy. Since no empirical primary data has been gathered, we have been using assumptions and our own experiences in the creation of the Balance Scorecard.
Strategy of the Department of Business Administration
The departments overall strategy is to be “leader of the academic environment”. This strategy is dived into a group of sub targets. * Various business programs - a broad possibility to elect courses on different level of difficulties. * Diversity and profile - close connection with the society and foreign universities. It’s important for the department to create an education that reflects interest of both the private and public organizations * Interaction – responsibility and commitment
* Student influence over their studies and share the responsibility for the development of the school. (Lunds Universitet Ekonomihögskolan, 2012-0302).
“Our vision is to be among the major research driven schools of economics and management in Europe in educating and developing leaders for business and public organizations, with a distinctive competence in innovation and change processes based on cutting-edge research.” (Lund Univerity, 2011-06-16).
The Balanced Scorecard in Nonprofit organizations
Kaplan (2002), one of the creators of the BSC, claims that non-profit organizations can bring increasing focus to their vision and generate valuable information to its stakeholders by using a performance measurement system such as the BSC. A lack of performance information might result in an inefficient market for allocating human and financial capital. Kaplan claims that the financial success should not be a primary objective in nonprofit organizations; the customer perspective should instead be at the top of their BSC. One of the challenges in creating a BSC for non-profit organizations is to define...