In the beginning of the 1980`s a new Management Theory was introduced. Rappaport made one of the first Concepts about business performance (Rappaport, A. creating shareholder value: the new standard for business measuring, New York 1986) in 1986. This was taken as a basis of creating shareholder value for several years. In the early 1990`s a unique term was created by Norton and Kaplan from the Harvard Business School. They developed a Framework which combined fiscal and non-fiscal key figures in one report to allow straight translation of defined strategy into deserved action, The Balanced Score Card (BSC). Even non-profit organizations must handle in a sensible way with funds they receive.
Table of Contents
1. Abstract
2. Introduction
3. Theoretic Foundation
3.1 What Is Strategy?
3.1.1 Strategic Management from Top to Bottom
3.1.2 Strategic Maps
4. Balanced Score Card (BSC)
4.1 Concept of the BSC
4.2 Fundamentals of BSC
5. Implementation of the BSC
5.1 Implementation of the BSC within a charity organization
5.2 Implementation of the BSC within a hospital
5.2.1 Financial
5.2.2 Customer
5.2.3 Internal Business Processes
5.2.4 Learning and Growth
6. Conclusions
Research Objectives and Core Themes
This paper examines the application of the Balanced Scorecard (BSC) framework within non-profit organizations, specifically focusing on the German healthcare sector and hospitals, to determine how strategic management tools can be adapted to align organizational vision with measurable performance outcomes in a non-profit context.
- Strategic management foundations and the creation of value.
- The structure and development of the Balanced Scorecard (BSC).
- Adaptation of BSC perspectives for charity organizations and hospitals.
- Identification of performance indicators for public sector entities.
- Linking mission statements to concrete strategic objectives and measurable results.
Excerpt from the Book
3.1 What Is Strategy?
Strategy or need-based positioning (Porter 1996, p.6f.) is the creation of a unique and valuable position involving various sets of activities. It can also be seen as a process of determining organizational aims, selecting the line of action, initiating activities required to transform plans into action, and evaluating the net outcome. Business planning requires extensive data analysis, a continuous process of navigating and utilizing internal and external resources to fulfill strategic goals. In order for a company to survive in a competitive market, and to react rapidly every managing step, measures taken by the company’s management should follow a predetermined strategy (Porter 1996, p.1).
According to Michael E. Porter (1996, p.1), strategic positioning emerges from three distinct sources:
• serving few needs of many customers (e.g.,oil change services provide only auto lubricant)
• serving broad needs of few customers (e.g., targeting only very wealthy clients)
• serving broad needs of many customers in a narrow market (e.g., operate in cities with a population less than 100.000 only)
Strategic positions can be based on customers’ needs, customer accessibility, or the Scope of a company’s products or services (Porter 1996, p.11).
Making trade-offs is another point in creating a sense of strategy. Some competitive activities are incompatible, thus earnings in one field can be achieved only at the expense of another area.
Trade-offs are essential to strategy. They create the need for choice and purposefully limit what a company offers
Summary of Chapters
1. Abstract: Provides an overview of the evolution of management theories and the development of the Balanced Scorecard as a framework to integrate fiscal and non-fiscal metrics.
2. Introduction: Explains the necessity of strategic adaptation in dynamic economic environments and introduces the BSC as an operational tool for corporate management.
3. Theoretic Foundation: Discusses the core concepts of strategy, strategic positioning, and the use of strategic maps to visualize organizational value creation.
4. Balanced Score Card (BSC): Details the development of the BSC framework, its four main perspectives, and its effectiveness as a tool for translating strategy into action.
5. Implementation of the BSC: Analyzes the practical application of BSC in charity organizations and hospitals, highlighting the required modifications to the standard four-perspective model.
6. Conclusions: Emphasizes the need for concrete, measurable indicators and effective communication of strategy to ensure successful implementation within hospital settings.
Keywords
Balanced Scorecard, BSC, Strategic Management, Non-Profit Organizations, Healthcare Management, Strategic Mapping, Performance Indicators, Organizational Vision, Financial Perspective, Customer Perspective, Internal Business Processes, Learning and Growth, Quality Management, Public Sector, Strategy Execution.
Frequently Asked Questions
What is the primary focus of this work?
The paper focuses on how the Balanced Scorecard (BSC), a management framework originally designed for for-profit corporations, can be adapted and implemented in non-profit and public sector organizations, specifically healthcare and charity facilities.
What are the central thematic fields covered?
The central themes include strategic planning, the four classic BSC perspectives (financial, customer, internal processes, and learning/growth), and the operational challenges of translating organizational mission into specific, measurable goals in the non-profit sector.
What is the primary research goal?
The goal is to explore how non-profit organizations can align their strategic objectives with their organizational mission and overcome the limitations of relying solely on financial data for performance evaluation.
What scientific methodology is used?
The author uses a descriptive and analytical literature-based approach, reviewing strategic management theories by authors such as Porter, Kaplan, and Norton, and applying these principles to practical cases in care homes and hospitals.
What does the main body of the paper address?
It provides an in-depth explanation of strategy, introduces the original BSC framework, and offers a step-by-step breakdown of how to modify each of the four BSC perspectives to better suit the specific requirements of the healthcare sector.
Which keywords best characterize the paper?
Key terms include Balanced Scorecard, Strategic Management, Non-Profit Organizations, Healthcare Management, and Performance Indicators.
How does the financial perspective differ in a hospital compared to a private enterprise?
In a private enterprise, the financial perspective focuses on profit and shareholder value. In a hospital, it is adapted to include budget target achievement, cost recovery, and managing donations, as financial sustainability serves as the basis for long-term survival rather than pure profit maximization.
Why are strategy maps important for the implementation process?
Strategy maps simplify complex organizational processes and visualize cause-and-effect relationships. They help employees understand the corporate strategy, which is critical for successful implementation at all levels of the organization.
- Citation du texte
- Dr. Kadir Yilmaz (Auteur), 2009, The Balanced Scorecard, Munich, GRIN Verlag, https://www.grin.com/document/135954
