The Development of Middle Eastern Companies

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Journal of Small Business Management 2006 44(3), pp. 407–425

Entrepreneurs Use a Balanced Scorecard to
Translate Strategy into Performance Measures
by Andra Gumbus and Robert N. Lussier

Although 50 percent of Fortune 1000 companies currently use a balanced scorecard (BSC), few small businesses are using a BSC. A review of the literature finds no BSC papers in leading small business/entrepreneurship journals. This article begins with a discussion of the BSC and why a small business should use it. Three small to medium-sized enterprise (SME) case studies are presented, with a copy of their BSC, to illustrate how Hyde Park Electronics, Futura Industries, and Southern Gardens Citrus use a BSC to set strategy and align operations to achieve breakthrough results. Implications are, that like large businesses, SMEs can also benefit from using a BSC. Entrepreneurs of SMEs can use the case studies to develop their own BSC to improve performance. Implications for practice and research are discussed.

Introduction
The balanced scorecard (BSC) is one of
the most highly touted management tools
today (Staff 2002; Atkinson and Epstein
2000; Frigo and Krumwiede 2000), and
Fortune 500 companies are increasingly
using it. A survey found that approximately 50 percent of Fortune 1000 companies in North America and 40 percent in Europe use a version of the BSC
(Kaplan and Norton 2001a). The editors
of the Harvard Business Review (HBR)
identified the BSC as one of the most significant management ideas of the past 75 years (PR 2003). The BSC is now being
listed as a value methodology along with

cost–benefit analysis and return on investment (Field 2000); it is being used to help change organizational culture (Simpson
and Cacioppe 2001); and several companies have reported improved operational efficiency and profitability as a result of
using the BSC (Atkinson and Epstein 2000;
Gumbus, Bellhouse, and Lyons 2003).
Researchers have clearly stated that
companies of all sizes are good at developing mission statements and strategies but poor at implementing operational
strategies to achieve them, and that they
are poor at measuring whether they are
achieving their mission and strategy. The
BSC addresses this problem by linking

Andra Gumbus is assistant professor of management, Sacred Heart University. Robert Lussier is professor of management and former director of Israel programs, Springfield College. Address correspondence to: Andra Gumbus, gumbusa@sacredheart.edu. ©2006, International Council for Small Business

GUMBUS AND LUSSIER

407

the mission to strategy and then translates the strategy into operational objectives and measures. The BSC can be used with five or 5,000 employees working
toward the same goals (Gumbus and
Johnson 2003; Green et al. 2002). However, a review of the literature, from January 2000 to September 2003, of the
Journal of Small Business Management,
Journal of Business Venturing, Entrepreneurship Theory and Practice, International Small Business Journal, and the Journal of Small Business Strategy
resulted in no papers with BSC in the
title. A general BSC search throughout
entire articles also did not find any of
these journals, nor any other small business/entrepreneurship journals, including the topic of the BSC. Thus, this empirical case study of three small to
medium-sized enterprises (SMEs) using
the BSC fills a gap in the literature while
addressing management practices in
small enterprises and entrepreneurship.
Clearly, large businesses are benefiting
from using a BSC, and small businesses
can also benefit from using a BSC, as
supported by three case studies presented in this paper.

Methodology
The primary methodology is case
study. Research was conducted through
personal interviews with executives at
Hyde Park Electronics, Futura Industries,
and Southern Gardens Citrus (SGC).
The U.S. Small Business Administration
defines small business as having fewer
than 500...
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