Extent of Application of the Balanced Scorecard in Evaluation of Performance of Sidpping Companies in Kenya
Nyaberi, Zipporah Kemuma
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Balanced scorecard (BSC) is a dynamic system that incorporates financial and non-financial measures in an integrated system to achieve performance. Unlike in the past, where companies used only financial measures to evaluate performance, most companies now supplement financial measures, with non-financial ones to better evaluate performance. This broad-based evaluation approach is used to evaluate organizational performance. This study focused on application of BSC as a performance evaluation tool by shipping companies in Kenya. It was , .' aimed at showing how BSt::was used as a performance evaluation tool, through the use of Key Performance Indicators (KPls). Specific objectives were to evaluate how shipping companies evaluate performance using the four main perspectives, which were, the Financial perspective, Customer perspective, Internal Processes perspective and the Growth and Innovation perspective; and how these ..were linked in a cause and effect fashion to improve company's financial performance. In the same light, the study sought to find out the challenges encountered in applying the BSC in performance evaluation. Findings of this study would be beneficial to management of the shipping lines and the various stakeholders, and the general business community in Kenya and the entire East Africa region. The research was conducted through collection of primary data from the target organizations. Primary data was collected using questionnaires, administered to the organizations' finance managers. A descriptive research design was adopted. Data collected was analyzed using Statistical Package for the Social Sciences(SPSS). From the data collected, it was evident that, to a great extent, most organization use both financial and non financial measures to evaluate performance. The study recommended that shipping companies should invest in customer oriented perspectives, in growing their employees and also in strengthening internal business processes in order to improve their overall performance, which, in turn will lead to improvement in Kenya's economic growth and thereby, achievement of vision 2030.