The BSC Framework why it has been introduced

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Historically, to determine the success of the companies, people use financial worth. The higher the financial results such as profitability, the better the firm is said to be performing. The traditional financial measures such as earnings per share (EPS), return on assets (ROA), return on investments (ROI), and many others were vastly used in numerous organisations as their performance measurement system.

However, these financial measures have been criticised as it is said that it only reflects the past data, encourages short-termism and may motivate manipulation of results. Chakravarthy, (1986) states that traditional measures only reflects past performances and for the long term benefit of the company, forward looking measures are required. Besides that, financial measures also do not take into account the other critical areas such as quality, flexibility and other areas that the company needs to excel in order to survive in the current competitive market.

In recent years, many management frameworks have been introduced such as Lynch and Cross (1991) "performance pyramid", Fitzgerald & Moon (1996) "building blocks of performance measurement system"; Neely et al., (2002) "performance prism"; Kaplan and Norton's (1992) "balanced scorecard" framework;, "six sigma" and "value for money" to have a wider view on the company's needs to compete in the market.

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Balanced Scorecard (hereafter known as BSC) is a performance measurement system that has been introduced to overcome the weaknesses of the traditional performance measurement systems. In the intense competition market, intangible assets of companies play a major role in creation of value for companies. (Nolan Norton Institute, 1991). Therefore, in order to improve the management of intangible assets, companies should incorporate measurement of intangible assets into the company's performance measurement system (Kaplan, 2010). It was introduced as a performance measurement framework to assess both the tangible and intangible assets of the company as the traditional performance measurement system was described as obsolete and misleading (Kaplan and Norton, 1992). This is because traditional measures do not account for many of the critical success factors that the company needs in order to be successful in the current market.

The BSC framework was created in 1987 at Analog Devices (Schneiderman, 1999). BSC became a popular strategic management tool after a work by Robert S. Kaplan & David P. Norton was published in the Harvard Business Review paper in 1992. Even though the BSC has been presented as a new innovation, other frameworks have been in existence long before the introduction of the BSC. BSC is said to be linked to the Tableau de Bord from France. Many of the concepts in the BSC are found in Tableau de Bord which was introduced in France in the 1930s (Malo, 1992, p. 923). Tableau de Bord was described as being similar to "dashboard". It is used by the "pilots" which are the managers of organisations to guide the companies to their intended goals and destinations. Kaplan and Norton, who maintain that "the Balanced Scorecard is a new framework for integrating measures derived from strategy," have also recognize that there is similarities between Tableau de Bord and the BSC framework ( Kaplan and Norton, 1997).

Kaplan and Norton (2001) states that the BSC reflects the changes in technology and competitive advantage in the 20th century where intangible assets became more important as it became the major source of competitive advantage of the company. According to the Business Dictionary (online) intangible assets are long term resources of an organisation but they have no physical existence. This includes brand, intellectual capital such as knowledge and know how, reputation and customer loyalty. Managers would have to learn on how to manage these intangible assets which includes customer relationship, employee training, high quality products and many more. Therefore, it is critical that these intangible assets are measured as "If you can't measure it, you can't manage it" - Peter Drucker.

Activity-based costing (ABC) is said to be the original thinking that led to the BSC framework (Johnson & Kaplan, 1987; Kaplan & Bruns, 1987). ABC is a costing model that assigns cost to each of the activities in the organisation. This model is based on a theory that activity consumes resources and therefore costs should be allocated to the activities based on the resources consumed. ABC can provide companies with information required to determine the measures of the BSC. ABC and BSC has always been seen as separate management tools but it actually complements each other and offers a great value when both of it are linked together (Turney, 2010).

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Atkinson et al. (1997) have stated that the BSC framework is one of the most significant developments in the management accounting field. The Balanced Scorecard: Translating Strategy into Action, a book by Kaplan and Norton has been translated into 24 languages and also awarded the 2001 Wildman Medal for its significant impact in the field of management accounting (Harvard Business School, n.d.).

According to Zelman et al., (2003), there has been an increasing trend on the implementation of the BSC as a performance measurement system. More and more companies are adopting the BSC framework as their performance measurement system. Examples of the adopters of the balanced scorecard are KPMG Peat Marwick, Allstate Insurance, and AT&T (Chow et al., 1997). According to The Advanced Performance Institute (API), about half of major companies in the US, Europe and Asia are users of the BSC framework. According to Bain and Company, there were about 57% of global companies that have already adopted the balanced scorecard in the year 2008.

There are three recent studies that have attempted to link the BSC usage and the improvement of organisational performance. A study by Hoque and James (2000) on the usage of non-financial measures of the BSC was conducted on Australian manufacturing firms. The results of this study show that there is a positive relationship between the non-financial measures of the BSC and the company's performance. However, this study fails to prove the claim of causal relationship of the balanced scorecard as this study only relates to non-financial measures and performance.

A study by Malina and Selto (2001) was done to investigate the effectiveness of BSC as a management control tool. The results indicated that there is an indirect relationship between the management control function and the improved performance. Managers who were involved with the study also believed that the BSC would improve the company's profitability.

Another study by Ittner et al. (2003) was done on the impact of implementation of BSC on the financial performance in terms of Return on Asset of the company in the financial services industry. The results of this study indicate that there is a negative relationship between the BSC implementation and the financial performance.

In addition to the studies above, these studies have examined the effectiveness of the implementation of the BSC framework with mixed findings as a result of these studies. The studies done by Evans and Jack (2003) and Davis and Albright (2004) showed that with a proper usage of the BSC framework, BSC led to the improvement of financial performance. Besides that, studies done by Dumond (1994), and Forza and Salvador (2000 & 2001) found that there is a positive effect on the employee's satisfaction and understanding of the company's strategy as a result of using the BSC framework. Conversely, studies done by Handfield and Ghosh (1995) and Neely et al. (2004) found no significant or obvious performance improvement in the companies.

To date, the BSC concept has evolved from a performance management tool into a comprehensive strategic management tool used by many companies. This evolution has been documented in the articles by Kaplan and Norton (Kaplan, 1994; Kaplan and Norton, 1992; 1993; 1996a) in the Harvard Business Review. The BSC framework and concept has been explained in details in Kaplan and Norton's book "The Balanced Scorecard: Translating Strategy into Action" (Kaplan and Norton, 1996b).

Historical foundations of the balanced scorecard

In the 1950s- 1980s, even before the BSC was popularised, there were other types of method used to try to take into account of other factors other than financial measures. The BSC was not original for promoting other factors besides the financial measures to be incorporated into the company's performance measurement system. According to Lewis (1955), General Electric has tried to incorporate non financial measures into the company's divisional performance during a staff group project in the 1950s. There were one financial metrics and seven non financial metrics recommended to be used to measure General Electric's business units. The metrics suggested were profitability, market share, productivity, product leadership, corporate social responsibility, personnel development, employee's attitudes and the balance between short-term and long-term objectives. These metrics contains financial perspective, customer perspective, business process perspective and learning and growth perspective. The last metric (balance between short-term and long-term objectives shows the fundamental of BSC where it tries to incorporate non-financial measures to ensure that managers try to strike a balance of the short-term and long-term objectives of the company. However, GE's project did not succeed as the non-financial metrics were never incorporated into the company's management systems.

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Around the same time as GE's project, Simon et al has explored the purposes of accounting information and the role of financial and non-financial information which led to the development of scorecard. Besides that, in the 1950s, Peter Drucker introduced management by objectives in his book Practice of Management published in 1954. Drucker (1954) believes that very employees need clearly spelled out objectives which should be aligned to company's strategy. In the mid 1960s, Robert Anthony proposed a framework for planning and control systems. Anthony identified three types of systems which are strategic planning, management control and operational control. Information for strategic planning is usually more financial based, management control is more quantitative based where as information for operational control is more non-financial based (Anthony, 1965). Therefore, it can be seen that the financial and non-financial measure in management system has been taken into account in the early works of GE, Simon and Drucker. However, despite the existence of such awareness and studies, financial information was relied heavily and extensively used in most of the companies until the 1990s (Kaplan,2010).

In 1970s and 1980s, new performance management systems by the Japanese companies were introduced such as just-in -time production and innovations in quality. According to Johnson and Kaplan (1987), companies in the United States were obsessed with short-term financial measures and failed to adapt to the changes in management systems which focuses more on quality and cycle time. Therefore, the companies fail to invest on intangible assets such as employee training, brand names and others. Managing the company solely based on financial information hinder companies performance of companies as many other factors that are crucial to the company's survival and profitability are overlooked (Johnson, 1980, p.44-5). Some authors emphasises the importance of reducing cycle times, improving quality and being more customer focused as this is believed to lead to improved financial performance.

In the 1920s, return on investment (ROI) calculations done by DuPont Corporations led to the usage of financial ratios (Allen, 2008.) These financial ratios are still used today in many of the companies for various purposes such as assessing the performance of the company compared to its competitors and its industry. Later on, emphasis on the quality and othe non-financial aspects led to the use on non-financial results in reporting and performance measurement. There were a few management concepts that came up which led to the balanced scorecard framework. These concepts are activity-based costing (ABC), triple bottom line reporting and also social accounting.

ABC was the original thinking that has led to the development of the balanced scorecard framework Johnson & Kaplan, 1987; Kaplan & Bruns, 1987).ABC is based on the concept which costs are allocated to activities which consumes resources. This differs with the traditional costing system where the traditional system allocates cost between few standard costs bases such as labour hours, machine hours and material consumption. ABC is believed to provide a better cost allocation with takes into account of the cost drivers which includes activities such as set-up costs, number of orders and many others. Firms who use ABC find significant difference in their perceived performance of a division if compared to using the traditional method. By having a clearer and more accurate costing of the firms, companies can then set strategies and measure their performance against strategy set. The BSC is employed to monitor the performance of the firm against the strategy set.

Concepts such as triple bottom line reporting and social accounting were introduced in the 1990s. These concepts came up as a response to companies solely reporting on profits and not reporting on the environment, economy and community issues. Sarbanes-Oxley Act is also one of the factors in the change of non-financial reports as it mandates companies in the United States to report on the company's financial results and also internal control after the collapse of some major companies in U.S such as Enron. Penalties are imposed for U.S companies which did not comply with the reporting standards (Zhang, 2005). Triple bottom line reporting was introduced by Elkington (1998) as he believes that companies have responsibility towards the community to help improve the standard of living and environment. This framework is a performance reporting concepts focused on the profit of the company, the people in the society and also the environment. This led to the increased importance of companies measuring their performance in the other non-financial aspects of the company.

Kaplan and Norton introduced the term "balanced scorecard "in 1992. Before the term of balanced scorecard was introduced, there was another practice introduced in the early 1900's called tableau de bord which contained most of the ideas of the balanced scorecard. This French strategic management system, tableau de bord has been introduced by process engineers for many years even before the balanced scorecard was introduced (Epstein and Manzoni, 1997). Since the tableau de bord is much older than the balanced scorecard, it has been changed overtime and therefore, there are many versions of it. Tableau de bord has been used in the management field since 1932 (Malo, 1995). Tableau de board comes from the French language which means dashboard. During those days, the tableau de bord is used as a tool for top management to have a quick view at the state of the company's environment and also the operations (Malo, 1995). According to Malo (1995), it belonged to the engineers which played a major part in the development of French industry. Since then, the tableau de bord has been changing to incorporate changes in the management systems and new management techniques.

The importance of incorporating non-financial elements into the company's management system has been introduced since the early years. The evolution and changes in the business environment has led to different crucial factors that the companies need to focus upon in order to succeed. All these concepts and thinking have led to the introduction of the "balanced scorecard" to accommodate these changes as these other factors have become more and more important in today's world.

Concepts

Before looking in to the review of the BSC literature, it is important to understand the term of the balanced scorecard. "Balanced" is defined by The Free Dictionary (online) as to bring into or keep in equal or satisfying proportion or harmony. Scorecard is a card which is usually used in games. It is used to record the performance and progress of the players. Therefore, from the definition above, balanced scorecard can be defined as a scorecard which is used by organisation that attempts to balance the aspects of measurements in a company.

BSC is a strategic management tool which aims to translate the organisation's vision and strategy into specific quantifiable objectives that can be measured. The BSC helps managers to define the critical success factors needed by the company to survive (Hepworth, 1998) and provides a system for the managers to measure and manage these critical success factors. It was built on the concept of strategy developed by Porter (Kaplan and Norton, 1996). Porter had argued that to formulate a competitive strategy, a company has to be aware of the competitive forces in the industry which the company operates.

A fundamental feature of the BSC is that each measure should relate to the company's strategy and also to the other perspective in the scorecard. The individual measures would be unique and this depends on the goals and strategies of the company (Kaplan and Norton, 1996). Therefore, determining the company's goals and strategies is critical and represents the first step in implementing the BSC framework.

Company's strategy and goals are broken down into specific business unit's goals which are in line with the company's overall strategy. Specific objectives are then set for each of these perspective and measures for measuring the achievement of these objectives are then determined. These objectives and measures have to be thought thoroughly to ensure that neither area is overemphasised nor underemphasised. The objectives are measured using these four perspectives which are the financial perspective, customer perspective, learning and growth perspective and internal business processes perspective (Kaplan and Norton, 1992).

Financial measures are known as lag indicators as they represent historical performance while lead indicators are performance drivers (Kaplan and Norton 1992, 1996). Traditional performance measurement systems focus solely on financial measures and these deals only with lag indicators that only reflect the past. Traditional performance measurement system is also not linked to the organisational strategy.

A good balanced scorecard should contain a mix of lag indicators and lead indicators contained in the four perspectives. By including lead indicators into the company's performance measurement system, it helps managers to overcome the problem of short-termism, forces them to think about the future and not only focusing on the past. Thus, the BSC is a performance measurement system that balances between financial and non-financial measures as well as lags and lead indicators. It helps managers to have a balanced overview on the performance of the company.

The BSC is developed in such a way that the financial measure is retained as the ultimate outcome measure of the company's success with the other three measures as supplements; customer, learning and growth and internal business processes (Kaplan, 2010). By adding other non-financials into the company's performance measurement system, it is hope that the company can have a balanced view of its short-term and long term goals and objectives.

Financial Perspective

This financial perspective deals with how the company look to the shareholders (Kaplan and Norton, 1992). It emphasises more on shareholder's satisfaction. The typical financial goals are the profitability, revenue, cash flows, return on assets, growth and maximising shareholder's value. Historically, company's performance measurement has been extensively focused on these financial measures. Most of the companies were obsessive in meeting targets and budgets and made most of the decisions solely on financial information. However, in the current era, managers recognise that over focusing on the financial measures is inappropriate as these financial measures reflect the past and not the future. Exclusive reliance on financial measures may motivate managers to make decisions that sacrifice long term value creation for the benefit of short term performance (Porter, 1994)

Customer Perspective

This perspective deals with how the customers view the company (Kaplan and Norton, 1992). Customer's loyalty and satisfaction is always linked to the long term growth and survival of the company. Belilos (1997) states that by looking at the company by a customer's point of view, it will lay the course for a successful business and it also helps in the planning of the company.

Measures selected for this perspective should measure the value delivered to the customers. Companies have to differentiate itself from competitors by ensuring that they meet customer demands and needs. Quality, reliability and customer service has to be good enough to maintain a good relationship with the customers. This will attract new customers and also retain the old ones.

Learning and Growth Perspective

Learning and growth perspective is about the capability of the company to continue to grow, improve and create value (Kaplan and Norton, 1992). According to Herbold (n.d.), companies that turn their previous successes into legacy practices that they follow repetitively are risking themselves by putting the company in a very disadvantageous position. He also said that companies need to constantly move, evolve, improve and innovate. This is very true as advancement in technologies have made customer's preferences change rapidly. Products become obsolete very quick. Customers are also more aware of the choices they have and best products in the market because of the availability of information on the internet. Therefore, in order to survive in the intensely competitive market, companies have to constantly learn and improve for growth and survival.

Internal Business Processes Perspective

This looks into the area of internal business processes that the company must excel at in order to survive (Kaplan and Norton, 1992). Companies will have to focus and excel in the internal business processes that enable the company to meet the customer's need. This includes creating value adding products, improving resource utilisation and asset management. By having efficient business processes, companies can minimize waste, produce at its best and this will lead to higher margins for the company.

Theoretical frameworks for balanced scorecard

A Theory is a coherent explanation of an observed or experienced phenomenon (Goia and Pitre, 1990). Theory building process is an ongoing effort of confirming, adapting and applying theory (Lynham, 2002) and the BSC is an excellent example of a theory being used. It doesn't seem to be that there is any work done that identifies the theory of balanced scorecard. However, the stakeholder theory and organisational learning theory seems to be the most appropriate theories underpinning the BSC framework. Stakeholder and organisational learning theory supports the four perspectives on the BSC framework.

Stakeholder theory

Companies have stakeholders and these stakeholders play some or a major part in the company's performance. Stakeholders is defined by The BusinessDictionary.com as a person, group or organisation that has direct or indirect stake in an organisation as it can affect or be affected by the organisation's actions, objectives and policies. Stakeholder theory states that the company's performance is affected by stakeholders and therefore stakeholders should be taken into account when making decisions. There are many articles and books that have been published about the stakeholder concept since the publication of Freeman's book, A Stakeholder Approach (1984).

The stakeholder's theory was introduced by Freeman in 1984. Freeman (1984) states that the organisation's responsibility is not just limited to the shareholders only but also to the persons that affects and is affected by the company. This includes employees, customers, suppliers and the communities where the companies carry out their businesses (Freeman, 1994). The stakeholder theory is entirely in contrast to Friedman (1962) view where Friedman vies is that the company's has only one obligation and its obligation is to increase or maximize shareholder's value.

Nowadays, most of the organisations define their stakeholders, acknowledge them publicly and take them into considerations when making decisions in all levels. People who apply stakeholders theory believe that the performance measurement design starts with stakeholders (Neely and Adams, 2002). Objectives are defined for each stakeholders group in terms of their expectations and also what they can contribute back to the company. Companies will then determine a strategy to ensure that these expectations are met. The BSC approach differs in terms of it aims to determine the strategy first and then only identifies inter-relationships (Kaplan,2010). The stakeholder's approach starts with the stakeholder's objectives and then only defines a strategy to meet those objectives. Stakeholder theory supporters have also criticized the balanced scorecard for not having a perspective for one of the main stakeholder group, the suppliers.

However, the balanced scorecard's customer, learning and growth and financial perspectives are influenced by the stakeholder's theory where customers and employees are taken into account when the companies make decisions. The performance of these perspectives is measured in order to determine whether the company is performing as planned. The stakeholder theory has influenced the BSC to incorporate the stakeholders into the company's performance measurement system as stakeholders are a significant part in the relationship that supports improved organisational performance.

In conclusion, the stakeholder theory helped in broadening the company's view and increased company's sensitivity on the importance of incorporating stakeholders into decision making processes. By that, the problem of short-termism and excessive focus on short-term financial results can be reduced or eliminated. The BSC which incorporates stakeholder's interest and emphasises that outstanding performance with its stakeholders are critical for the success of the company's strategy helps companies understand more on the other non-financial factors which are crucial to the company.

Organisational learning theory

Argyris and Schon (1978, p.323) defined organisational learning as an experience-based improvement in organisational task performance. Organisational learning has became a very hot topic as learning organisation tend to have better system and structure which helps them to adapt to changes better and faster which in the end leads to better performance. Firms learn from the best and from other company's mistakes in order to succeed and perform better.

Balanced scorecard is about measuring performance against set objectives to ensure that the strategy can be achieved by taking actions to improve performance of the companies. It is about learning and improving on the activities done in the four perspectives. Companies have to learn, improve and also be able to adapt to changes in order to succeed in the current competitive environment. According to Stata (1989, p.64), companies will have a sustainable competitive advantage especially in a knowledge-intensive industry compared to other companies if individuals in the company and the company are able to learn at a faster rate than its competitors. Learning capabilities and knowledge of the employees of the company is a type on intangible assets that companies value. Literatures are done on organisational learning and showing companies on how to become a learning organisation. Balanced scorecard is impacted by these literatures and companies are expected to use the framework to be a learning organisation.

Two of the balanced scorecard perspective, the learning and growth perspective and the internal business perspective are directly linked to the organisational theory. Performance in these areas is measured and actions are expected to be taken to learn to improve in these areas. The improved performance can then be measure in the other two perspectives which are financial perspective and the customer's perspectives.

In conclusion, the organisational theory and the BSC framework links in terms of the BSC is somehow developed to help companies to improve and be a learning organisation.

Implementation of the BSC as a performance measurement system

Kaplan & Norton, (1996) states that the implementation of the BSC includes these processes:

1. Translating the organisational strategy into operational goals;

2. Communicating the goals to the people in the company and link the achievement of goals to the individual performance;

3. Business planning;

4. Feedback and learning, and adjusting the strategy when and where necessary.

Cause and effect relationship

Kaplan and Norton (1996) claimed that there's cause and effect relationship between the measurements of the four perspectives in the balanced scorecard. Kaplan and Norton argued that learning, training and innovation (learning and growth perspectives) lead to better internal business processes (internal business processes perspectives) as employees would be able to perform better in their job.

By having good internal business processes, the company would be able to meet their customer's needs and this will improve customer's satisfaction and loyalty (customer perspectives). Higher customer's satisfaction and loyalty can help improve the company's financial performance as a returning customer is more probable (financial perspectives). Therefore, Kaplan and Norton (1992) believe that if the perspectives in the scorecard are excelled at, the company would have a better financial performance. However, there is not enough evidence and research to claim this claim of causality.

Kaplan & Norton (2004) came up with Strategy Maps: Converting Intangible Assets into Tangible Outcomes to provide detailed method on how to link the strategy of the company with the objectives. This strategy maps can be used to assist managers and consultants to develop their own BSC.

Responses

The BSC has received many compliments and also criticisms. Many case studies have been done in this area which includes implementations in private organizations (Yang et al., 2005), major public corporations (Niven, 2003), government agencies (Kirby & Smiesing, 2003), and large multinational corporations (Wunder, 2005) but there are only a few researches done to assess the impact of the implementation of BSC on the company's performance.

Criticisms

Stakeholder's approach

The BSC is criticised by Atkinson et al. (1997), amongst others as they are in a view that the BSC does not adhere to the stakeholder approach to performance management as it fails to take into account of the issues relating to employees and suppliers.

No weightage

Ghosh and Mukherjee (2006) state that one of the difficulties in the BSC measurement system is that there is no weightage given to the measures of the BSC. It is suggested that weights should be assigned to each measures depending on their importance to the organisation. This is however, a complicated task.

Cost of implementation

There are also concerns on the cost for the implementation of such systems whether the benefit of implementation of such system outweigh the cost of implementing it. There are also questions on the successfulness of such implementation to achieving the intended goal.

Merely a performance measurement system

Besides that, BSC is viewed as not more than a performance measurement system. Some companies think that they are a strategy-focused organisation by having adopted the BSC framework as their performance measurement system, developed their goals, objectives and measures. More than that is required such as understanding the business and the business's needs. According to Kirby and Smiesing (2003), some of the companies have accumulated their current and desired key performance indicators and put them into a framework that utilises this perspective. BSC is not meant for this purpose.

Claim of causality

Other than that, the claim of causality by Kaplan and Norton (1996) has been questioned by a number of critics. There was no attempt by Kaplan and Norton to prove the claim of this causality (Norreklit, 2000). Kaplan and Norton have also failed to provide studies to support their claim of causality among the perspectives of the BSC. There are many studies that have linked various perspectives to financial performance but no study has linked all the four perspective of the BSC together. Malina (2001) has studied on the claim of causality but only found partial support for the causality claims of the balanced scorecard.

Grouping

Another criticism of the BSC framework as a performance measurement system is that it attempts to group all measures into only four perspectives (Kennerley and Neely, 2000). The BSC has also been criticised on the simplicity of the framework. Organisations operations are complex and it is questioned regarding the ability of the BSC framework to accommodate the complexity of the organisations.

Development of the balanced scorecard

The BSC framework has not changed much since the early usage but the modern BSC designs have a number of different features that helps differentiate the older BSC with the current ones. The modern BSC is used as a larger management system compared to the earlier days (Kaplan & Norton, 2006).

BSC was introduced as a simple framework which uses four perspectives to measure the company's performance and these four perspectives includes financial and non-financial measures (Kaplan and Norton, 1992. The four perspectives introduced were financial measures, learning and growth, internal business process and customer perspective. It aims to translate organisation's vision and strategy into specific goals and objectives that are measurable. Kaplan and Norton (1992) believes that with the use of this framework, performance of the organisation will improve due to the better and richer quality information they are able to receive.

Some authors have identified generations of the BSC concept such as the second and third generation of the BSC (Egalson & Waldersee, 2000; Kennerley & Neely, 2000). The changes in the BSC framework are due to the organisational usage and also findings and criticisms from researchers and writers in the management accounting field.

As the framework is known as being simple, problems such as clustering (Butler et al, 1997, Kennerley et al, 2000), filtering and claims of causality were identified by various writers. The problem was how to divide measure into the four perspectives and what measures should be chose to be reported on. Additions of a few key measures where key measures were introduced into each perspective into usage of the BSC are one of the early changes seen. Kaplan and Norton (1993) also introduced the concept of strategic objectives to overcome the problems identified.

Efforts were made by Kaplan and Norton (2001) to resolve the problems identified by writing their thoughts in their article "The Strategy-focused organisation". Strategy Maps: Converting Intangible Assets into Tangible Outcomes (Kaplan & Norton, 2004) were written to provide details to justify their claim of causality. Methods are shown on how to describe the organisation's strategy using linked objectives. This provided the users of BSC with a tool that they can use to construct a BSC. Kaplan and Norton (2004) came up with this formula; Breakthrough results = Strategy maps + Balanced scorecard + Strategy-focused Organization. Strategy maps were used to construct the BSC and to set specific measurable objectives into the four perspectives of the BSC.

Expense of implementing the BSC framework and the ongoing support and maintenance of it has also challenged the usage of BSC. With the current technology, BSC has developed as there are many software companies who have developed the BSC software and databases that reports real-time results. BSC users can use these software which are more accurate and reflects real-time results. Other management techniques such as lean manufacturing and six sigma support the usage of BSC framework as it drives strategic information to managers at all levels at the same time and therefore, information is available to everyone.

Summary

It is evidenced that there has been many studies and researches done about the BSC framework based on this literature review. Many case studies have also been done to test on the success and failures of the BSC framework. There were also many studies and researches in linking the BSC with other strategic management framework.

There were theories and some management techniques that have led and underpin the development of the BSC framework which was discussed earlier. BSC has evolved as time passes by and became a tool used for strategic management and control rather than just a performance measurement system. The evolution is not a major one and only incorporates minor changes to adapt to the changes in environment and thoughts of other authors. However, it continues to be debated on whether to use the BSC framework or not as it receive both supports and also criticisms from the authors. The claim of causality is still being debated as there are only a few researches that support this claim.

There have been many researches on the BSC and its framework but not many have tested on the effect of the implementation of the BSC on the company's financial performance and compare it with other companies in the same industry. The purpose of this study is to fill in this gap and study on the effect on implementation of the BSC on the company's financial performance in the few selected industries.