Effectiveness of the Balanced Score Card in Implementation of Corporate Strategy: A case of a Kenyan Insurance Company.

Abstract

The Government of Kenya has made substantial investment in the public sector through creation of diverse corporations. However, most public sector firms have not shown the required levels of efficiency and effectiveness that would be required of them. This has necessitated diverse measures such as the Results Based Management System (RBMS) which was initiated by the Government of Kenya in 2005. This management system has been put in place to ensure efficiency and effectiveness in service delivery in public sector organizations. Therefore the Kenya Bureau of Standards (KEBS), like any other public sector organizations, is required to operate under the RBMS of which Performance Contracts (PC) are a key component. The application of the Balanced Score Card (BSC) in the strategy management process has been found to be a useful tool in the clarification of the vision and mission of organizations and the rallying of the organizational members towards its achievement. This study examined the role of the BSC as a strategic implementation tool to enhance efficiency at KEBS. The specific research objectives included the examination of financial perspective, customer perspective, internal business processes perspective, and learning and growth perspective of the BSC on the efficiency at KEBS. The theoretical underpinning of the study was open systems theory and the institutions’ theory. The study was based on the descriptive research design with the target population of 150 management staff at KEBS. The sample size is 109 respondents. The study out the following; that there was a significant relationship between financial perspective of the balanced scorecard and organizational efficiency at KEBS. This was attributed to the availability and sufficiency of resources at both the organizational and departmental levels for KEBS to execute its mandates at those levels on time, and in the required scope hence improving on the organizational efficiency. Secondly, there was a significant relationship between the customer perspective aspect of the BSC and organizational efficiency at KEBS. The customer perspective was important to the organizational efficiency at KEBS through reduction of turnaround timelines in service delivery. There was also a significant relationship between the internal business process perspective of the BSC and organizational efficiency at KEBS. This was attributed to the internal business processes ability to influence customer satisfaction. Lastly, there was a significant and positive relationship between learning and growth perspective aspect of the BSC and organizational efficiency at the organization. This significance was attributed to the ability of KEBS to benchmark and learn on best practices on diverse aspects of its mandates. The study recommends that KEBS should focus on the learning and growth perspective of the balanced scorecard as it had the greatest influence on its organizational efficiency. The study suggests further studies on the examination on other financial perspective metrics of the balanced scorecard and the ways in which it can help in organizational efficiency at KEBS.