Designing a balanced scorecard as a strategic management tool in a logistics company : a case study

Abstract

Purpose: The increasingly dynamic environment, changes in customer needs, and technological advancements affecting the logistics sector make it imperative for businesses to design a balanced performance measurement system. The Balanced Scorecard (BSC) is an ideal tool to achieve this aim. Therefore, the fundamental focus of this research study is to develop a BSC within the selected logistics company. Design: In order to address the objectives of this research study, a qualitative, case-study approach was considered the most appropriate form of methodology to be adopted. Accordingly, in-depth semi-structured interviews were conducted with personnel from every department. All interviewee responses were thoroughly analysed in the context of the BSC framework and validated by the Country Manager (CM) and the Human Resources (HR) manager. Findings: The BSC was developed following Rohm’s (1997) ‘Nine Steps to Success Framework’. For the design of the BSC, five perspectives were deemed necessary, four of which are the original perspectives as devised by Kaplan and Norton (1992), and a fifth perspective was also integrated into the design of this BSC to feature the environmental element of the case-company. Following the design of the BSC, a strategy map was also developed to show the cause-and effect linkages. Conclusion: The study concluded that the designed BSC could add value to the case company as the validation procedure highlighted those areas which could be improved and enhanced. In addition, both the HR manager and the CM considered that most of the suggestions provided are reasonable and in accordance with what they are aiming to achieve in the near future. However, since the company is part of a cluster and, on a broader level, is part of a multinational company, all recommendations put forward have to be discussed at a top-level. Value: This study is vital to the case company under review as it provides a balanced performance measurement system that the logistics company can benefit from. Moreover, designing and eventually implementing the BSC enables the company’s employees to align their objectives with the overall vision and mission of the company. Additionally, given the lack of research with reference to the BSC framework in the logistics industry in Malta, this study could be useful for other logistics companies.