The balance scorecard is a tactical planning and direction system. It knows as the balanced scorecard because it balances the usage of fiscal and non-financial public presentation steps to measure public presentation. BSC present an organisation ‘s nonsubjective and scheme into a set of public presentation steps. BSC frequently applied in concern procedures, authorities and non-profit organisation. Balance scorecard does non taking on achieve short-term fiscal aims but it focused on non-financial aims that a company must win and run into its fiscal aims. The balance scorecard included four positions, which are ( 1 ) fiscal, the net incomes and value created for stockholders ; ( 2 ) client, the success of the company in its mark market ; ( 3 ) internal concern procedures, the internal operations that create value for clients ; and ( 4 ) acquisition and growing, the people and system capablenesss that support operations. It is used to equilibrate pecuniary and non-monetary public presentation steps to measure short-term and long-term public presentation in a individual study.
Background of Company
There are six companies that have been carried out for this study which are Innovatex Sdn Bhd, KK Apparel Sdn Bhd, Cycletech Sdn Bhd, Pasaraya Watan Sdn Bhd, Kamal Ismail Associates Sdn Bhd and WY Management & A ; Design Consultants Sdn Bhd. All of the companies are non-listed private sector company. Innovatex Sdn Bhd is supplier for PU and PVC leather for furniture storytellers. KK Apparel Sdn Bhd is the fabric provider. Cycletech Sdn Bhd and Pasaraya Watan Sdn Bhd involved in the same field, which is consumer industry. Cycletech Sdn Bhd selling trim portion and motor vehicles while Pasaraya Watan Sdn Bhd is selling day-to-day necessities. Kamal Ismail Associates Sdn Bhd and WY Management & A ; Design Consultants Sdn Bhd involved in the same industry which is building or belongings industry. Kamal Ismail Associates established as an designer house. WY Management & A ; Design Consultants involved in interior design of a edifice.
The size of organisation ( turnover/sales ) Pasaraya Watan, WY Management & A ; Design Consultants and KK Apparel are in the same class, which is less than RM250, 000 whereas for Innovatex, Cycletech and Kamal Ismail Associates autumn at the same group, which is between RM 250,000 to RM 10,000,000. The organisation age for Innovatex, KK Apparel, Cycletech, Kamal Ismail Associates, WY Management & A ; Design Consultants is between 5 to 20 old ages whereas for Pasaraya Watan is between 21 to 35 old ages. All of the above companies have the same figure scope of employees which is between 5 to 49 full clip employees. Companies that used manual system to treat their informations are Pasaraya Watan, KK Apparel and Cycletech whereas for the remainder of the companies is utilizing centralized computing machine information system.
Performance rating were needed to roll up and measure information relation to operating facets, and in peculiar to the topic discussed in the study. Consequences from public presentation rating will let the step of existent public presentation against expected public presentation in the companies. Therefore, informations of the companies were analyzed in order to heighten the efficiency of the organisations. There are three chief intents of public presentation rating which are be aftering, commanding and determination devising. Based on the study, there are three companies fulfilled all standards above which are Innovatex, WY Management and Design Consultant and Pasaraya Watan. KK Apparel does non run into the commanding criterion but achieved planning and determination devising. On the other manus, Kamal Ismail Associates and Cycletech merely matched the controlling intents.
Besides that, this public presentation rating besides following three chief constituents of selling scheme which are cost leading scheme, distinction scheme and focal point scheme. Cost leading scheme is a scheme used by concerns to make a low cost of operation within their place. The chief intent of this scheme is to increase an advantage over rivals by subtracting operation costs below that of others in the similar industry. Differentiation scheme is a method of which a house aims to develop and market alone merchandises for different client sections. A distinction scheme is appropriate where a house has clear competitory advantages, the market is competitory, and the house has alone resources and abilities which allow it to carry through these demands in ways that are difficult to copy. Whereas for focal point scheme it is a method in which a company concentrate its resources on come ining or spread outing in a narrow market with a narrow range or industry section. A focal point scheme is normally applied where the company knows its sector and has merchandises to competitively that run into the demands of the mark market.
WY Management and Design Consultant, Innovatex, Pasaraya Watan and KK Apparel have adopted for the distinction scheme. While Kamal Ismail Associates adopted focal point scheme whereas for Cycletech adopted cost leading scheme.
Furthermore, the public presentation rating can be done in different sort of degree such as company degree, divisional degree and activity degree. Based on the all six companies that have been surveyed, their degrees of public presentation rating were categorized as company degree.
( 1 ) From the study I have carried out, it showed that different companies utilizing different public presentation rating steps. Generally, all six companies frequently use return on investing, residuary income, economic value added and hard currency flow as their public presentation rating steps. On the other manus, balanced scorecard, budget discrepancy analysis, governable net income, divisional net income, market portion, non-financial/ qualitative steps, production procedures, squad public presentation, employees attitudes, ongoing provider ratings and client satisfaction studies is seldom or ne’er usage by them in rating steps.
Besides than public presentation rating step that frequently used by companies stated supra, Innovatex Sdn Bhd and Kamal Ismail Associates Sdn Bhd besides often utilizing balanced scorecard and budget discrepancy analysis in company public presentation steps but for Innovatex Sdn Bhd in add-on with production procedures and ongoing provider ratings. They seldom use what have stated above except for budget analysis.
KK Apparel, Cycletech, WY Management and Design Consultant and Pasaraya Watan besides frequently used rating step stated antecedently. However, KK Apparel, Cycletech and Pasaraya Watan besides practising ongoing provider ratings while WY Management and Design Consultant does non lend in the facets above. KK Apparel and WY Management and Design Consultant besides ever utilize production procedure. All these four companies do non or seldom use public presentation ratings step as stated above except for ongoing provider ratings and production procedure.
( 2 ) There are four major positions for balance scorecard which include fiscal, client, internal concern and acquisition and growing. Although those four companies do non utilizing balanced scorecard but they still concern on fiscal positions steps. From my observations, Cycletech and KK Apparel have frequently focused on per centum of grosss from new merchandises, per centum decrease cost in unit and return on investing. While WY Management and Design Consultant frequently focus on per centum of grosss from new production, gross revenues growing per centum for targeted section, per centum to entire grosss of selling disposal costs and return on investing. These four companies seldom or sometimes concentrate on per centum of gross from new customers/ markets and economic value added.
( 3 ) The client position steps, in falling orders, Innovatex was the most focusing on per centum market portion, followed by Cycletech, KK Apparel and Kamal Ismail Associates, and in conclusion seldom focused by Pasaraya Watan and WY Management & A ; Design Consultants on the facet above. Innovatex, Kamal Ismail Associates and Cycletech frequently concentrated on per centum growing in concern from bing clients, followed by Pasaraya Watan and WY Management & A ; Design Consultants, and seldom focused KK Apparel. Innovatex, WY Management & A ; Design Consultants and Kamal Ismail Associates were sometimes focussed entire gross revenues to new client facet, followed by Cycletech, KK Apparel and Pasaraya Watan which seldom focused. For client study satisfaction evaluations and client profitableness analysis, Innovatex and Kamal Ismail Associates were frequently focused, while WY Management & A ; Design Consultants was sometimes, followed by Cycletech and Pasaraya Watan which seldom, and ne’er concentrate at all for KK Apparel. Kamal Ismail Associates sometimes focused on client study merchandise functionality evaluation tonss, followed by Innovatex, Pasaraya Watan, WY Management & A ; Design Consultants and Cycletech which seldom focused, and KK Apparel which ne’er focus at all. For the facets monetary value relation to rivals, per centum returns from clients and per centum on clip bringings, Pasaraya Watan and Innovatex were frequently focused. Followed by Cycletech, WY Management & A ; Design Consultants, Kamal Ismail Associates and KK Apparel, which sometimes or seldom focused on the facets mentioned above.
( 4 ) In the internal concern position steps, Innovatex, and KK Apparel are more focus on this country. They frequently concentrate on new merchandise debuts versus rivals, development rhythm clip, entire quality costs as a per centum of gross revenues, per centum of faulty end product, unit cost tendencies and fabricating rhythm efficiency. For Kamal Ismail Associates and WY Management & A ; Design Consultant besides accent in three countries include per centum of gross revenues from new merchandises, new merchandise debuts versus rivals and per centum of gross revenues from new markets. Cycletech merely focus two countries which are per centum of faulty end product and unit cost tendencies. While for Pasaraya Watan, does non emphasis much on this internal concern position steps.
( 5 ) In larning and growing position steps, all of these six companies sometimes and seldom focused on employee satisfaction study evaluations, one-year per centum of cardinal staff go forthing, per centum procedures with existent clip feedback capablenesss and per centum of customer-facing employees holding on line entree to client and merchandise information. But for Innovatex and Kamal Ismail Associates frequently use gross revenues gross per employee, figure of suggested betterments per employee and figure of suggestion implemented per employee. The staying four companies sometimes and seldom use those constituents as stated above in add-on with gross revenues gross per employee, per centum of employees with personal ends aligned to the balance scorecard and per centum of employees who achieve personal ends. But for WY Management & A ; Design Consultant frequently concentrate on figure of suggested betterments and implemented per employee.
( 6 ) Kamal Ismail Associates and Innovatex will go on usage balanced score card as their public presentation rating steps whereas for KK Apparel Sdn Bhd and WY Management and Design Consultant Sdn Bhd stated that they would see utilizing balanced scorecard in the hereafter for concern enlargement. For Cycletech Sdn Bhd and Pasaraya Watan Sdn Bhd, they would non see utilizing balance scorecard in future because there are obstructions will be confronting.
Implement balanced scorecard in concern procedures is non an easy undertaking. There will look some obstructions which listed in this study signifier as stated below: –
Lack of technological support, including preparation and staffing
Lack of information
Lack of committedness from top direction
Ambiguity within schemes
Re-organization of bing patterns and policies
There are there companies ticked all the obstructions that listed in the study signifier which are Cycletech Sdn Bhd, Pasaraya Watan Sdn Bhd and KK Apparel Sdn Bhd. For WY Management and Design Consultant Sdn Bhd and Innovatex Sdn Bhd, they have ticked two chief obstructions faced on utilizing the balanced scorecard. The obstructions include ambiguity within schemes and re-organization of bing patterns and policies. Kamal Ismail Associates has faced the same troubles as the companies above, in add-on with the deficiency of information job.
Balanced scorecard is a utile tool to measure a company public presentation step and increase the communicating and feedback procedure between the workers and direction technique. This balance scorecard is normally used in many companies. It is use to accomplish the company ‘s public presentation to its vision and end. Furthermore, it is besides used as a tool to detect public presentation of the organisational mark. Based on the study, two out of six companies are utilizing balanced scorecard which are Innovatex Sdn Bhd and Kamal Ismail Associates Sdn Bhd. Overall, this two companies are making good in all positions but Kamal Ismail Associates Sdn Bhd should emphasis more on internal concern positions steps. The staying of the companies are non utilizing balanced scorecard as their public presentation rating steps. They should see utilizing it because it is truly bring benefits to the companies.