Balanced Scorecard in an Indian Public Sector Enterprise – A Framework for Implementation

Abstract

The performance of any public sector enterprise is criticized on the basis of their poor performance in terms of profit or rate of return on capital investment. The main aspect for judging the poor performance of the enterprise is based on the financial measures used in the evaluation of the performance. The rel evance of using only the financial measures or results is questionable and lacks futuristic perspective. The performance of the enterprise may even get worse, when the management lacks strategic perspective or focuses only on short term goals instead of long term goals. The strategic objectives can’t be realised if only the financial performance or results like profit margin, EBIT, Cash flow etc are used for the per formance measurement. The financial results are the consequences and not the goals or objectives to be achieved. Way back in early 1990’s, Mr Robert Kaplan and Mr David Norton has developed the Balanced Scorecard concept as a framework to measure the non-financial performance of a private industry. Originally it was developed as a means to communicate company strategy, to align unit and individual goals to strategy, to link objectives to long term targets and budgets and to conduct performance reviews to improve strategy of the organisation. Over the time, the balanced scorecard concept has undergone metamorphosis and has developed into a complete performance management system including the management and execution of the corporate strategy. The balanced scorecard breaks down the Vision, Mission and strategy of the organisation