The Balanced Scorecard: A study on the prevalence of the framework among Norwegian SMEs

Abstract

In this master thesis we examine the prevalence of balanced scorecard (BSC) among Norwegian small- and medium sized enterprises (SMEs). We also want to make it possible for SMEs to implement BSC and achieve its benefits, therefore we investigate what factors are required to successfully implement BSC. And finally, we examine to what extent the BSC is an effective tool for SMEs. One of the most well-known and used concepts in financial and business management, as well as one of the leading concepts today is the Balanced Scorecard (BSC). The concept was strongly actualized in 1992 through Kaplan & Norton’s (1992) article “The Balanced Scorecard – Measures That Drive Performance”. It was developed on the basis of criticism aimed at traditional management systems and addresses four perspectives that will measure a company's value proposition through a combination of financial and non-financial goals. The Kaplan and Norton have not given any proper definition to the theoretical framework of balanced scorecard, but several researchers and academics have published their own definitions and interpretations of its use

We used a quantitative survey to obtain data material. The list of Norwegian SMEs were collected from the database "Proff Forvalt". The survey were sent out to 8000 companies. We revived 342 valid responses. Even with a low response rate, the number of respondents is sustainable enough to conduct a good study on the topic

The findings from our survey results thus indicate that BSC is not particularly widespread among Norwegian SMEs. Results shows that 7% of the companies that took part in the survey actively use the BSC in their financial management processes. In order to implement BSC, it is important that the board / top management participates in the implementation phase. In addition, it is important to have an organizational culture that accepts the concept, and finally the necessary knowledge to keep the concept active.