Balanced Scorecard Implementation In Higher Education: An .

Corporate Ownership & Control / Volume 15, Issue 3, Spring 2018, Continued- 1and managers are all committed to the strategicobligations of the company and seek constantly toameliorate the measures to evaluate (Paul Eisenberg,216).Figure 1. Balanced scorecardthe strategy of the company, it has to identify andclarify the hypotheses which underlie the cause andeffect relationships, between the measurement ofresults and the determinants of performance. Everyconsidered indicator is an element of the chain ofcause and effect relationship which communicatesthe strategy to the whole company.To build a "balanced scorecard" and choose gy consists of establishing a strategic mapallowing the connection between the fourcomplementary performance levels, corresponding tothe four perspectives. A strategic map describes theprocess by which intangible assets are transformedinto material results on the financial axis or on thecustomer axis. It gives managers an appropriateframework to describe and manage the strategy.The representation of this map is madeaccording to the following schematic diagram:2.2. Chain of causality linking the 4 perspectivesThe idea which emerges from this chain of causalityis that the financial performance is conditioned bythe value perceived by customers, the organizationitself, assured within the framework of processes.The basic support functions of which, are employeesand information systems, become the guarantors. So,the underlying philosophy of this chain of causality isthe primacy of financial performance on all otherperspectives. Financial indicators matter most andthe whole company has to adapt to consequences itsrelations with the customer, its internal processesand its staff management. The goal of each lowerperspective is to provide support for the achievementof the other higher perspectives. For example, thegoal of the innovation and learning perspective is toprovide the infrastructure to support theachievement of the three previous perspectives(Ilyasin and Zamroni, 2017). Since BSC has to reflectFigure 2. A generic strategy mapSource: Armitage & Scholey (2007)207

Corporate Ownership & Control / Volume 15, Issue 3, Spring 2018, Continued- 1As depicted in Figure 2, customer results drivethe financial outcomes. Corporate strategies andtactics remain important to achieve customer resultsby using human, information, and capital resourcesof organizations (Kaplan & Norton, 2004).3. APPLYINGEDUCATIONBALANCEDSCORECARDIN3.1. Use of BSC in higher educationSince its creation in 1992, the concept of BSC has beenlargely used in business fields and in the strategicmanagement area for industries (Lovaglio 2011).Nevertheless, BSC can be also adopted by governmentagencies, universities, and non-profit organizations(Niven 2008; Pietrzak 2014). Cullen et al., (2003)argued that using BSC in educational sector can revivethe importance of overall managing businessoperations as compared to just monitoringperformance. Moreover, monitoring non-financialmeasures can give higher education institutions thepossibility to take into account «student andstakeholder feedback, faculty and staff satisfaction,and the internal efficiency of the institution’sprocesses» (Cindy Brown, 2012). For Taylor andBaines (2012), the BSC is applied by universitymanagers as a tool enabling to enrich their knowledgeof the organization’s strengths and weaknesses.Many examples related to the use anddevelopment of the BSC tool in higher educationsector can be pointed out. Sutherland (2000), (citedin Karathanos and Karathanos, 2005) stated that theRossier School of Education at University of SouthernCalifornia used the concept of BSC for evaluation ofits academic programs and relevant planningprocesses. In this context, Armitage and Scholey(2004) were successful to apply the BSC concepts ship and technology. Karathanos andKarathanos (2005) also explored how BaldrigeEducation Criteria for Performance Excellence usedBSC instrument for the education sector. Overall, itcan be easily suggested that there are variousdifferences and similarities that exist betweenapplication of BSC for education and business.Chang and al. (1999) reported a survey of 69accounting department heads. Majority of theaccounting department heads were in favour of usingBSC due to its underlying benefits to accountingeducation programs. Chang and al. (1999) also talkedabout the case of the University of California, SanDiego, which developed a BSC planning al functions. This development based onthe data collected from internal financial reports,National Association of College and UniversityBusiness Officers benchmarks, and satisfactionsurveys conducted by faculty, staff and students. Thisproject was developed in line with the vision, mission,and values of the University. O’Neil and al. (1999)presented out a BSC developed by a faculty team atthe Rossier School of Education of USC and inspiredby the business sector. This Balanced Scorecardconsists of different perspectives of academicmanagement, internal business, innovation andlearning, and stakeholder perspective at large. Thisimplementation of BSC made management aware ofimportant aspects associated with the leadership ofthe university, competitive advantage factors,methods for improvement and creation of maximumvalue, and opinions of students and employers aboutthe university.2.3. The BSC structureNo doubt that BSC is considered today as one of . This is due to the flexibility of itsstructure facilitating the adaptation of this techniqueto the specificities of any organization. It is knownthat Private, public and Non-Profit entities don’t havethe same have different orientations, goals, visionsand missions. Accordingly, it seems to be crucial toadjust and adapt the architecture of the BSC (Świerkand Mulawa, 2015). Niven (2002) argues that Nonprofit organizations tend to focus on theorganizational mission and customer orientationrather than the financial perspective. Along the samelines, Kettunen (2005) claims that in the public sectorthe customer perspective represents the mainobjectives, in opposition to the private sector whereit is more realistic to put finance perspective at thehighest level.Kaplan and Norton (2001) stated that non-profitorganizations prefer building their BSC starting fromthe initial perspective of organizational mission. Anexploration of customer perspective, internal processperspective, learning and growth perspective, andfinancial perspectives is done sequentially. Incontrast, Lawrence and Sharma (2002) reported thatthe DXL University keeps the mission and strategicobjectives at the top whereas financial perspectivecomes second and other perspectives are consideredlater.Wilson and al. (2003) noted that the CanadaNational Department of British Columbia BuildingsCorporation (BCBC) changed the financial perspectiveinto shareholder perspective during the creation ofBSC. This BSC also kept customer perspective andshareholder perspective on the same levels. Likewise,Wilson et al. (2003) also indicated that variousnational departments (the Norwegian Directorate ofPublic Construction and Property, the US GeneralService Administration, and the Nation PropertyBoard of Sweden) established BSC similar to thebusiness model with the financial perspective firstwhich is unexpected from organizations belonging tothe public sector. Moreover, some non-profitorganizations come up with another perspective inresponse to their key Strategies. They created a socialresponsibility perspective (Kaplan and Norton, 2001).The above literature review argues basically thatthe non-profit organizations do not always stick withthe traditional configuration of the BSC perspectivesconsidering the financial perspective on the top.Indeed, they tend to adopt the four main aspects ofBSC according to their specificities, and strategicorientations. However, some public sector and nonprofit bodies choose to structure their BSC in thesame way as do the private and business companies.This may be explained by the nature of theorganizational culture of this body which may focusmore on financial achievements as do businesses(Chen and al., 2006).208

Corporate Ownership & Control / Volume 15, Issue 3, Spring 2018, Continued- 1In their study Beard and Humphrey (2014)propose the application of BSC technique to assessinformation technology (IT) resources in highereducation structures. The proposed BSC uses theperformance criteria of the Malcolm Baldrige NationalQuality Award in Education. The authors considerthat Educational bodies are different from businessesso they need a specific and unique BSC to evaluatingtheir IT resources including student learning andstakeholder satisfaction.For its part, Al-Zwyalif (2012) noted therelevance of applying BSC in developing countries. Heconducted a survey of Jordanian Private Universitiesamong deans, deputy deans, heads of scientificdepartments, financial managers and administrativemanagers. He concluded that those in charge in theseuniversities recognized the importance of BSC andassumed that the necessary resources required forthe implementation of BSC were available.3.3. Performance measure indicatorsKarathanos and Karathanos (2005) compared the BSCestablished initially for the business sector and theone adapted, by the Baldrige Education Criteria forPerformance Excellence, toeducation.Theyconcluded that in both higher education andbusiness, the main purpose is to reach and measureexcellence. However, higher education institutionsfocus more on academic measures than on financialperformance. Moreover, measurements in highereducation deal, in general, with academic variablesand indicators which are most easily quantifiable suchas ratios of students and faculty members, grading,demographics of students, class distributions, ratiosof graduation and percentile scores, percentage ofemployed graduates, load on faculty and others(Ruben, 1999). In contrast, Ruben (1999) consent thatmajority of higher education institutions do not giveenough concern to the measurement of students’,faculty and staff satisfaction. But this does notprevent them from considering attracting andretaining best-talented people as a major goal and keysuccess factor. In another research, Ewell & Jones(1994) presented measures used by the highereducation institutions in 10 states in the USA. Thesemeasures are graduation rates by different bothgenders, the capacity to complete a degree in time,retention rates, respecting ethnicity, transfer rates,the percentage of passing professional exams, jobplacements, the satisfaction of graduates, workloadand productivity of faculty members.After comparing the Baldrige Award and BSCcriteria in the education environment Karathanos andKarathanos (2005) have obtained very closeindicators when using both tools. (See Table I).3.2. Notion of customer in higher educationIt is true that the first, internal and direct customersof every university are the students, but they are notthe only ones concerned by the universities’ valuecreation. In fact, university customers include alsothe students’ future employers and even the wholecommunity (Ndoda and Nyamazana, 2014). In HigherEducation, there are a variety of stakeholdersincluding students, employers, academic andadministrative staff, government, accreditationagencies, etc. All of them are directly concerned bythe delivery of educational products and each of themhas his own perception of these products and theirrelated quality. Consequently, the notion of customerseems to be a confusing and debatable issue in HigherEducation (Harvey, 1993; Schwartzman, 1995;António, 2006). Indeed, the question is to explore thereal customer of a course or a degree offered byeducational institutions. The one that gets the service(the students) or who pays for the service (thegovernment, the employers) [Harvey, 1993].However, general orientation is to considerstudents as the main consumers of educationalservice. In reality, other consumers are directlyinvolved. The most concerned are employers. Theyare supposed to consume different educationoutputs: graduated students they recruit, trainingcourses for their staff, research they take part in(Harvey, 1993). According to Schwartzman (1995), thestudent has always been considered as customermetaphor, since the introduction of the notion ofTotal Quality Management in the higher educationsector. The problem of reducing customersatisfaction to students’ wants and needs may lead toa very limited and unrealistic vision of customersatisfaction. Generally, students have very short-termand self-serving objectives and interests; for instance,passing a course, graduating, learning concepts andtechniques with an immediate applicability toemployment are most prominent interests ofstudents (Schwartzman, 1995). Moreover, studentsare not all the time in a capacity or in a situation toknow exactly what they want (Harvey, 1993).Characteristics and contents of a degree are notdesigned directly by student-as-customer. Most thatthe students can make is to register in a particulardegree and then select optional courses to constitutetheir study plan.In this research, the traditional customerperspective of Kaplan and Norton will be replaced bythe students and stakeholders perspective.4. METHODOLOGY FRAMEWORKThis paper is based on the case study as a researchmethod to build a BSC employed as a framework tomanage the strategies in one of the Emirati highereducation institutions. However, the relevance of thiscase study lies in the use of a joint approachcombining SWOT analysis and BSC and generating anintegrated strategic management system. Accordingto Lee and Sai On Ko (2000), it is «a more structuralapproach in setting up the foundation of the balancedscorecard; instead of simply identifying the “keyperformance indicators” (KPI) via gut feeling or bybrainstorming».4.1. Link between BSC and SWOT analysisKaplan and Norton presented four perspectives(financial, customer, internal processes, innovationand learning) as main aspects of corporate strategythat have to be evaluated. However, the BSC is moreconsidered as a tool of measurement of strategyrather than a tool for deciding strategy (Mc Adam andO’Neill, 1999). In other words, BSC is just a toolhelping managers to execute the decided strategy.Thus, it cannot be used successfully if the strategy isnot actionable and not in line with the organizationalobjectives (Al-Baidhani, 2013).For this reason, the SWOT (strengths,weaknesses, opportunities, and threats) analysisappears as a valuable “springboard” serving toidentify key performance indicators (KPI) of BSC.209

Corporate Ownership & Control / Volume 15, Issue 3, Spring 2018, Continued- 1BSC is noted for its important contribution inreinforcingthelinkagebetweencustomerenhancement activities and organizational strategy.Nevertheless, BSC is not able to point outidentification of new customers and markets (McAdam and O’Neill, 1999). In this regard and for thepurpose of constructing reasonably the BSC,Kootanaee et al. (2013) recommend beginning firstwith exploring the organisational environment, forinstance applying the SWOT Framework.For his part, Kaplan and Norton (1996) explainedthat the initial phase of implementation of a balancedscorecard is to identify organizational vision andstrategy. It is argued that conducting a SWOTanalysis, helps to conceive appropriate strategies.Thus, it will be used as “springboard” on the way ofthe development of the balanced scorecard.Table 1. BSC for education and businessEducation1. Student Learning Results: It is important to use variousassessment methods for analyzing the learning results ofstudents in order to depict a connection with the mission andorganizational objectives. Holistic appraisals of studentlearning are important.2. Student and Stakeholder Focused Results: Measuringsatisfaction levels of students and stakeholders abouteducational programs and quality provision is integral. Studentdevelopment and learning are enhanced by measuring thesefactors.3. Budgetary Financial and Market Results: Major expenditureson students like tuition fees, cost per academic credit, andresources used for education must be measured.4. Faculty and Staff Results: Measurements related toinnovation, completion of educational programs, promotion ofknowledge management, training rates, communication andcollaboration, the overall well-being of faculty and staff andtheir satisfaction levels.5. Organizational Effectiveness Results: This perspective anizational effectiveness can be measured throughimprovement in students’ performance, overall learningenvironment of the institution, and completion oforganizational plans.6. Governance and Social Responsibility Results: It is importantfor the education sector to be accountable, and depict ethicalbehaviour by maintaining stakeholders’ trust and complyingwith legal requirements.Source: Karathanos and Karathanos (2005)Business1. Customer Focused Results: Measurements revolve around thesatisfaction of customers from product and service features,delivery, and relationships.2. Product and Service Results: Measurements of product andservice performance from customers’ viewpoints.3. Financial and Market Results: Businesses assess financial andmarket results through various tools like ROI, liquidity,profitability, value creation, operating margins and others.4. Human Resource Results: Businesses measure similar aspectsas of education sector. For instance, training, completion ofwork, innovation, and overall well-being and satisfaction levelsof employees.5. Organizational Effectiveness Results: Internal operationalperformance measures are also included in this perspective.This revolves around measuring productivity, production cycle,and effective deployment of organizational strategy.6. Governance and Social Responsibility Results: Businesses alsoneed to be accountable, and depict ethical behaviour by thecorporate governance of the organization and adhere to thelegal and regulatory aspects of the industry.4.2. BSC design process5. CASE STUDYTaking into account what it has been said aboveregarding the relationship of complementaritiesbetween the BSC and SWOT analysis, the proposedmethodology, to construct the BSC applied to the caseof a higher education UAE institution, is acombination of the SWOT method and balancedscorecard (BSC), identifying its four main strategicperspectives. This methodology is made up of 3 mainphases. Identification of Strategy: Strategy is anassumption of how the organizational vision andmission will be accomplished. Identified strategicthemes are the reflection of what managers considerimportant to reach their strategic goals. This stageaims to identify a set of strategic themes for theorganization based on SWOT analysis. Definition of Strategic Map: Knowing thestrategy of the organization, related action plans willbe developed and translated into 4 balanced str

balanced scorecard approach and attempts to discuss how it may be useful and applicable in the strategic . scorecard. education. Education, University. , Scorecard.,