Balanced Scorecard and Financial Perspective
African Journal of Business Management Vol. 5(32), pp. 12520-12530, 14 December, 2011 Available online at http://www.
academicjournals. org/AJBM DOI: 10. 5897/AJBM11. 928 ISSN 1993-8233 ©2011 Academic Journals Full Length Research Paper An investigation into the interrelation between balanced score card factors: A case study in the automotive industry Jalalpoor Mahdieh1 and Tolouei Pedram2* 1 Department of Management, University of Isfahan, Isfahan, Iran.
Department of Management, University of Tehran, Tehran, Iran. 2 Accepted 14 June, 2011 Since 1990s, when Kaplan and Norton introduced balanced scorecard (BSC) model, this model has been considerably popular amongst managers all over the world. Although BSC is known as a successful performance measurement tool amongst managers, there have been criticisms of that including: How financial and non-financial measures are linked together? Are relationships in a direct way or there is bi-directional casualty?
To overcome the limitations to current BSC theory, this paper aims to describe main factors of each balanced scorecard BSC perspectives and investigate interrelation between them with consideration to automotive parts sector in Iran. For this aim, we analyze the relationship between various perspectives in structure of balanced scorecard and measure causal relationships between various perspectives and their role in improving financial perspective. This research was conducted through a set of monthly reports of Balances scorecard factors in Tosnco – company of auto industry – during a three-year period.
Case study evidence verified the underlying theoretical hypothesis of BSC. It is verified that perspectives are positively correlated with each other and new interrelation between internal process perspectives factor and financial perspective evidence was also found. The innovative dimension of this research is that we actually applied BSC in Iran and investigated factors related to auto industry and interrelation between factors with each other. Key words: Performance, process, customer, finance, factors. INTRODUCTION Performance measurement is considered a part of a performance management system. This process includes series of activities to eminently and spiritually achieve organizational excellence in the competitive field and focus the efficiency and effectiveness of these activities. Martinson (1999) offer several descriptions of organizational performance, and present a variety of models and methods to performance measurement at the same time. Traditional performance measurement methods *Corresponding author. E-mail: [email protected] ut. ac. it Abbreviations: BSC, Balanced scorecard; statistical package for the social sciences. SPSS, that were based on financial measures- not only reflected the complete success or failure of companies that did not ave the necessary abilities, but also failed to establish a logical relation between the company’s success factors and was unable to support management programs (Kaplan and Norton, 2001). Environmental management issues have received an increased amount of attention in recent years, as have various performance measurement systems (PMS) such as the balanced scorecard (BSC). At this time, BSC was presented as the most practical and comprehensive performance measurement model. In recent years, BSC has been a comprehensive model when looking at management issues for financial and non-financial purposes and has been very popular as it as attracted a lot of attention (Norreklit, 2000). This model offers a variety of performance factors in four Mahdieh and Pedram perspectives: The Financial perspective; the customer perspective; the internal business process perspective and the organizational learning and growth perspective. The BSC is a multi-criteria evaluation concept that highlights the importance of performance measurement (Tseng, 2010). Based on BSC, the cause and effect relationship between the four perspectives have been created (WongOn-Wing et al. , 2007; Paul, 1998). In fact, the logic of cause and effect as the essence of he BSC approach-which distinguishes it from other approaches- is described (Atkinson et al. , 1997). It is stated that the learning and growth performance, internal process performance, costumer performance, and financial performance counteract each other eventually (DE Haas and Kleingeld, 1999). Jones and Sasser (1995) recognized a cause and effect relationship between loyalty and customer satisfaction and financial results, where customer satisfaction leads to loyalty and it is customer satisfaction that can bring positive financial results. Due to the chain relationship between perspectives, hanges in one perspective would cause changes and reactions in other perspectives. Consequently, managers can achieve improved financial results through the chain relationship between perspectives (Cohen et al. , 2008). Relationships in BSC model are indicated within the framework of the fact that in order to make financial results, we must provide value for costumers, and this would happen only, when an organization improved internal processes and match them with costumers’ demands. Accordingly, in order to improved internal processes, and initialize processes that provide value for costumers, the rganization must reinforce growth and learning in the organization (Kaplan and Norton, 1996). Hogue and James, in study of Australian construction companies in 2000, realized that the companies employing non-financial factors have made considerable financial results. Other researchers have realized that using BSC is indirectly related to improved performance and profitability (Malina and Selto, 2001). There are very few researches related to causal relationship between various factors; especially between financial perspective and other perspectives in BSC model. Amongst such researches we can point to a research, in Greece, that onsiders the relationship between parameters of BSC model in 90 companies. Results of this research indicate that improving non-financial perspectives results in better financial perspectives, and non-financial perspectives are interrelated (Cohen and Thiraios, 2008). Although BSC is known as a successful performance measurement tool amongst managers, there have been criticisms of that including: How are financial and nonfinancial measures are linked together? Are relationships in a direct way or there is bi-directional casualty? In this study, we present an approach to overcome the limitations to current BSC theory.
The scope of our study is two-fold; the first goal is to investigate and identified main factors of each balanced score card perspectives with 12521 consider to automotive parts sector. We categorize the factors and determine their priority in regard to environment of automotive parts industry. While the second goal of the study is focused on cause and effects logics and linking financial and non-financial perspectives together. In this part, we will assess the influence of factors of each perspective on other perspectives and analyze the cause and effect relationship between them. In order to present a better image of reciprocal impacts f various factors, we have taken into consideration four perspectives of the automotive company with an exception of BSC, and then we will analyze the interrelationship between four perspectives. Considering the fact that in the present environment of Iran, management and control affairs are considerably important, and accurate scientific evaluations are amongst managers’ major concerns, BSC is considered to be one of the most comprehensive and functional tools of performance evaluation. This research measures the effects of different perspectives of balanced score card in an automotive parts manufacturing unit in Iran. LITERATURE REVIEW
Here, we first explain how to use balanced scorecard, and then in the next part, we investigate and identify factors related to each perspective. Part A – BSC Since 1990s, when Kaplan and Norton introduced BSC model, this model has been considerably popular amongst managers all over the world. Hundreds of organizations have already employed this model, or intend to employ it in near future (Rautiainen, 2008; Kald and Nilsson, 2000). Healthcare organization in Sweden has appreciated BSC model quite well, and has employed it as a solution to organizational problems, as well as a means of realizing organizational goals (Aidemark, 001). Germany, England and Italy have also successfully developed BSC model (Gehrke and Horvath, 2002). Numerous countries in Northern Europe have employed this model (Kald and Nilsson, 2000), and studies indicate that the model has been specifically favored in most of those countries; although in some countries, including France, where there is another model called “dashboard” rooted in their culture, BSC model is not so popular (Bourguignon et al. , 2004). Kaplan and Norton stress on importance of three principals in the concept of BSC: 1. Maintaining causal relationship 2. Including adequate performance incentives and timulators 3. Maintaining the relationship with financial measurement factors (Speckbacher et al, 2003). 12522 Afr. J. Bus. Manage. Figure 1. All perspectives of BSC. On this basis, researches refer to this model as a means of working out strategies based on causal relationship (Speckbacher et al. , 2003). Causal logic is considered to be the essence of BSC model. Other researchers name causal logic as the core of BSC model (Atkinson, 1997; Norreklit, 2000). There are also theories stressing that Kaplan and Norton (1996) have not adequately explained the causal relationships, and researchers claim that the entioned relationships are not causal, and are merely logic (Pedram, 2003). Another research, in Finland, is indicative of dissatisfactions caused by lack of causal relationship between components of the model (Malmi, 2001). Although definition of causal relationships is the basis of accomplishment for balanced scorecard model, apparently many organizations do not take this into consideration (Aidmark, 2001; Ittner et al. , 2003). Part B – Factors related to each perspective in BSC In this paper, in order to measure and evaluate relationships between various perspectives, we searched or factors related to each perspective. The four perspectives of BSC are learning and growth, internal processes, costumer, and financial. Here we briefly explain characteristics of each perspective. Learning and growth perspective: stress on innovation, creativity, competition, capabilities, and target subjective properties. This perspective aims to identify professions (human assets), system (informational asset), and organizational state (organizational asset) in order to support internal processes. Internal process perspective: identify decisive processes in the organization. In this perspective, we ust make sure that company’s products and services meet the needs of customers. Costumer perspective: results in introduction of a valuable approach that guarantees loyalty of costumers. In this perspective we must keep constantly identifying parameters, which costumers consider as valuable, and provide them for costumers. Financial perspective: defines tangible outcomes of organization’s strategies and includes a series of traditional financial factors. This perspective covers longterm goals of the organization, and company’s major goals are usually put into this perspective. Financial erspective is usually considered to be a secondary aspect and a function of other perspectives. It is indeed the outcome of activities of other three non-financial perspectives. All perspectives, their causal relationships, and their relationships with strategies are shown in Figure 1. METHODOLOGY Kaplan and Norton stress that BSC is a model, and must be optimized in accordance with specific elements related to an organization or industry. This model cannot be used as a general model for various organizations and industries, or even for all aspects of an industry. Therefore, it must be designed and xecuted individually for each condition and each organization. Every organization must adjust BSC to its own mission, outlook, strategy, technology, organizational culture, and environment, in order to use it properly (Kaplan and Norton, 1993). For the same reason, we searched in related literature and Mahdieh and Pedram. studies and worked out factors related to each perspective within the realm of automotive parts. The factors are as follows: 1. There are some general factors in accordance with the requirements of international standard. Standard related to this industry is ISO/TS16949: 2009 and ISO9000 2.
There are also factors related to costumer, which all companies must report to costumers periodically. 3. Factors related to other stake holder such as communities, share holders and employees 4. Factors included in scientific articles and researches with related subjects We took all required factors from the mentioned sources and put them in Table 1. Source of each factor is shown in the table too. After taking the viewpoints of experts and conditions of the Company into consideration, we selected main factors from Table 1. Factors shown in Table 2 are measured and analyzed as major factors throughout this article.
Also in Table 3, the number of factors which are used in the paper is shown. Hypotheses formulation According to Kaplan and Norton model there is a continuous relationship between perspectives of BSC. According to this model, Kaplan and Norton claimed that outcomes of optimizing performance of learning and growth perspective are evident in better performance of internal business processes. This would accordingly have a positive effect on costumer perspective, and finally improves financial performance. These relationships are shown in Figure 2. The following research has aimed to evaluate this claim.
In this article, we analyze the relationship between various perspectives in structure of balanced scorecard. Measuring causal relationships between various perspectives and their role in improving financial perspective is the final goal of this research. Three hypotheses were formed in this regard: H1. 1: There is a positive relationship between learning-growth perspective and internal process perspective. H1. 2: There is a positive relationship between internal process and costumer perspective. H1. 3: There is a positive relationship between customer perspective and financial perspective.
In the next part, we investigated the relationship between each main perspective of BSC and detailed factors of the other perspectives. The second part of article will assess these hypotheses: H2. 1: There is a positive relationship between all factors of learning and growth perspective and internal process perspective in total. H2. 2: There is a positive relationship between all factors of internal process perspective and costumer perspective in total. H2. 3: There is a positive relationship between all factors of customer perspective and financial perspective in total. 12523 se performance factors which had been frequently used in literature of BSC. For financial perspective we used one financial criterion. In the following tables abbreviations and values related to each factor are brought from TOSN data during the period of 2006-2009. Number of factors in each perspective is shown in Table 4. We worked out level of realization of factors on the basis of company reports, covering the period of March 21st 2006 to March 20th 2010, and in a monthly order. In order to synchronize and facilitate calculations, we worked out reports related to the factors on a monthly basis and in forms of percentages.
For each factor, we worked out 48 data from the existing information, we then calculated geometrical average of factors and determined the level of interrelation between each factor and geometrical average of the related perspective. We also worked out value of each factor for the period of March 21st 2006 to March 20th 2010. Measuring the relationship between perspectives This trend showed that the BSC, when executed have growth factor. By using Statistical Package for the Social Sciences (SPSS) in this article, Level of interrelation between each factor and other factors of the same perspective was taken into consideration.
By using SPSS, we determine importance rate of sub-scales (factors). The importance rate of each factor is shown in Tables 5, 6 and 7. Also the correlation between four main perspectives is shown in Table 8. The relationship between these four perspectives is shown in Figure 3. In Addition to relationships which are stated in Kaplan and Norton BSC card, it is obvious that there are some strong between perspectives. These relationships demonstrate that not only these for perspectives are in contact with each other in simple direction as it is shown in Figure 2; they depend on each other indirectly. It eans that not only our hypotheses in the first part are based on facts; some other relationships should be taken into account. Next, we determined whether all the sub factors of each perspective influence on upper perspective. For this aim, we consider each factors of one perspective (for example learning) and calculated the correlation between all factors of that (L1-L8) with the next perspective (In this example, the process perspective). Based on BSC model, all of the factors of each perspective (Learning) must influence directly on the next perspective (process). We will investigate whether this claim is true or not.
These relations are shown in Figure 4. Research method Conclusion Statistics used in this article are related to automotive parts manufacturing companies in Iran. The data are collected in Naien Development and Progress Company (TOSN Co. ). TOSN was established in January 1997. The main activity of this company is manufacturing main parts of automotive engine. The company is the sole manufacturer of some specific parts in Iran. The company outlook is defined as pioneering in manufacturing main parts of automotive engine in the Middle East. In this research we tried to In this article, we investigated factors related to each erspective. In order to measure and evaluate relationships between various perspectives, we searched for factors related to each perspective and ranked them for each perspective (Tables 5, 6 and 7). In the next part, we evaluated level of interrelation between non-financial perspectives and financial perspectives through 12524 Afr. J. Bus. Manage. Table 1. General factors related to evaluating BSC perspectives. Perspective Factor Abbreviations Financial Return on assets return on equity inventory turnover sales margin assets turnover, debtors turnover ROE ROA IT SM AT DT Percentage of lost clients
Percentage of customers’ complaints Market share on time delivery to customer rate of orders variety of products (according to the market), Perceived level of quality Perceived level of trust to the products After-sales service Rate of new costumers Perceived level of service Brand awareness Brand image Perceived value of money Perceived level of service PLC PCC MSh OTD RO VoP PLoQ PLoT AfSS NC PLoS BA BI PVoM PLoS Effectiveness of the quality management system Degree of evaluation suppliers performance number of raw material suppliers Reduction defect (casting ,machining) Reduction scraps m ean time to repair ean time between faults repair costs Quality cost Per capita logistic per capita raw materials transportation costs per capita product transportation costs EQMS DoESP NRMS RD RS MTTR MTBF RC QC PL PRMTC PPTC Costumer Internal processes 1 source 2 4 * * * * * * * * 3 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Mahdieh and Pedram. 12525 Table 1. Contd. production person-hours average daily production percentage of product realization Useful product line internal duplication error overall equipment efficiency
Effective dispatching of orders (in terms of price, specifications and delivery time) degree of cooperation with suppliers degree of cooperation with distribution channels Speed of adopting innovations already introduced in the market Speed of adopting innovations not yet introduced in the market rate of support the groundwork for establishment of a process-based organization Learning and Growth PPH ADP Ppr Upl Ide OEE EDO DoCS DoCDC SoAIaI SoAInI sgepo Per capita presented suggestion, per capita accepted suggestions per capita executed suggestions rate of training hours rate of training section efficiency
Frequency rate of accident Severity rate of accident rate of access to IT per capita non-cash bonus rate of investment in new technology rate of innovative products and services exchange of information with co-operative companies Promotion of common business plans with co-operating companies Cooperative companies monitoring Collaboration and information exchange in the organization Pps Pas Pes Rth Rtse FRA SRA Rai PNCB InvTech IPS FExCO FPCBT CCM FCoEx * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Source 1-factors from international standard
Source 2-factors from customer viewpoint Source 3-factors focusing on stakeholder viewpoint Source 4-factors from literature review questioning main hypotheses in balanced scorecard logic. Indeed, we tried to find a real evidence for this claim. The questioned data in TOSN, manufacturer of automotive parts using balanced scorecard for 3 years, confirms this claim in some aspects. Results of presented hypotheses were as follows: Interrelations between growth perspective and internal processes perspective was almost 0. 96. Also, interrelation between processes perspective and costumer perspective was 0. 824. Interrelation etween costumer perspective and financial perspective was 0. 781(results are shown in Table 8). Therefore, in this company there is a deep and 12526 Afr. J. Bus. Manage. Table 2. Selected factors related to evaluating BSC perspectives in this article. Factor Financial perspective Sales margin Abbreviation Label Sm F Customer perspective Market share Perceived level of quality Perceived level of trust to the products After-sales service Perceived level of service Brand awareness Brand image Perceived value of money MSh PLoQ PLoT AfSS PLoS BA BI PVoM c1 c2 c3 c4 c5 c6 c8 c8 Internal business and production process perspective
Effective dispatching of orders (in terms of price, specifications and delivery time) degree of cooperation with suppliers degree of cooperation with distribution channels Speed of adopting innovations already introduced in the market Speed of adopting innovations not yet introduced in the market Rate of support the groundwork for establishment of a process-based organization EDO DoCS DoCDC SoAIaI SoAInI Sgepo p1 p2 p3 p4 p5 p6 Learning and growth perspective Rate of investment in new technology Rate of innovative products and services Exchange of information with co-operative companies
Promotion of common business plans with co-operating companies Collaboration and information exchange in the organization Rate of training hours Rate of training section efficiency Cooperative companies monitoring InvTech IPS FExCO FPCBT FCoEx Rth Rtse CCM l1 l2 l3 l4 l5 l6 l7 l8 Table 3. Number of factors in each perspective. Number of factor 1 8 6 8 23 Perspective Financial perspective Customer perspective Internal business and production process perspective Learning and growth perspective Total and positive relationship between non-financial factors of the model. According to BSC model, Kaplan and Norton claimed hat outcomes of optimizing performance of learning and growth perspective are evident in better performance of internal business processes. This would accordingly have a positive effect on costumer perspective, and finally improves financial performance. Kaplan and Norton did not investigate the different relationship between all perspectives. In this article, we assessed all the relationships between perspectives to determine the cause and effect relationship between all perspectives. Our research resulted in amazing conclusion. We found the relationship between business processes and financial perspective strong.
Interrelation between financial perspective and internal Mahdieh and Pedram. 12527 Figure 2. Effect of factors of BSC on each other. Table 4. The importance rate of each factor in the learning perspective. L1 1 0. 854(**) 0. 933(**) 0. 938(**) 0. 947(**) 0. 969(**) 0. 968(**) 0. 959(**) 0. 975(**) L1 L2 L3 L4 L5 L6 L7 L8 L L2 0. 854(**) 1 0. 959(**) 0. 948(**) 0. 868(**) 0. 891(**) 0. 922(**) 0. 903(**) 0. 938(**) L3 0. 933(**) 0. 959(**) 1 0. 968(**) 0. 934(**) 0. 937(**) 0. 954(**) 0. 954(**) 0. 978(**) L4 0. 938(**) 0. 948(**) 0. 968(**) 1 0. 928(**) 0. 957(**) 0. 976(**) 0. 955(**) 0. 984(**) L5 0. 947(**) 0. 868(**) 0. 34(**) 0. 928(**) 1 0. 911(**) 0. 934(**) 0. 957(**) 0. 961(**) L6 0. 969(**) 0. 891(**) 0. 937(**) 0. 957(**) 0. 911(**) 1 0. 987(**) 0. 958(**) 0. 978(**) L7 0. 968(**) 0. 922(**) 0. 954(**) 0. 976(**) 0. 934(**) 0. 987(**) 1 0. 963(**) 0. 990(**) L8 0. 959(**) 0. 903(**) 0. 954(**) 0. 955(**) 0. 957(**) 0. 958(**) 0. 963(**) 1 0. 982(**) L 0. 975(**) 0. 938(**) 0. 978(**) 0. 984(**) 0. 961(**) 0. 978(**) 0. 990(**) 0. 982(**) 1 Table 5. The importance rate of each factor in the process perspective. P1 P2 P3 P4 P5 P6 P P1 1 0. 852(**) 0. 918(**) 0. 765(**) 0. 916(**) 0. 865(**) 0. 962(**) P2 0. 852(**) 1 0. 663(**) 0. 951(**) . 925(**) 0. 853(**) 0. 920(**) P3 0. 918(**) 0. 663(**) 1 0. 580(**) 0. 736(**) 0. 683(**) 0. 827(**) P4 0. 765(**) 0. 951(**) 0. 580(**) 1 0. 824(**) 0. 738(**) 0. 827(**) P5 0. 916(**) 0. 925(**) 0. 736(**) 0. 824(**) 1 0. 939(**) 0. 968(**) P6 0. 865(**) 0. 853(**) 0. 683(**) 0. 738(**) 0. 939(**) 1 0. 958(**) P 0. 962(**) 0. 920(**) 0. 827(**) 0. 827(**) 0. 968(**) 0. 958(**) 1 Table 6. The importance rate of each factor in the customer perspective. C1 C2 C3 C4 C5 C6 C7 C8 C C1 1 0. 979(**) 0. 959(**) 0. 872(**) 0. 953(**) 0. 945(**) 0. 806(**) 0. 820(**) 0. 938(**) C2 0. 979(**) 1 0. 948(**) 0. 891(**) 0. 947(**) 0. 53(**) 0. 855(**) 0. 876(**) 0. 965(**) C3 0. 959(**) 0. 948(**) 1 0. 849(**) 0. 972(**) 0. 960(**) 0. 705(**) 0. 733(**) 0. 898(**) C4 0. 872(**) 0. 891(**) 0. 849(**) 1 0. 873(**) 0. 933(**) 0. 879(**) 0. 878(**) 0. 956(**) C5 0. 953(**) 0. 947(**) 0. 972(**) 0. 873(**) 1 0. 970(**) 0. 733(**) 0. 764(**) 0. 917(**) C6 0. 945(**) 0. 953(**) 0. 960(**) 0. 933(**) 0. 970(**) 1 0. 804(**) 0. 829(**) 0. 961(**) C7 0. 806(**) 0. 855(**) 0. 705(**) 0. 879(**) 0. 733(**) 0. 804(**) 1 0. 985(**) 0. 935(**) C8 0. 820(**) 0. 876(**) 0. 733(**) 0. 878(**) 0. 764(**) 0. 829(**) 0. 985(**) 1 0. 946(**) C 0. 938(**) 0. 965(**) 0. 898(**) . 956(**) 0. 917(**) 0. 961(**) 0. 935(**) 0. 946(**) 1 ** Correlation is significant at the 0. 01 level (2-tailed). processes of production and business was positive and equal to 0. 946. Based on this finding, we tried to determine the reason for this relationship. For this aim, we considered all the factors of each perspective and we evaluated these detailed relationship. Interrelation between factors of process perspective and financial 12528 Afr. J. Bus. Manage. Table 7. The relationship between main perspectives. L P C F L 1 0. 967(**) 0. 888(**) 0. 950(**) P 0. 967(**) 1 0. 824(**) 0. 946(**) C 0. 888(**) 0. 824(**) 0. 771(**) F 0. 950(**) 0. 946(**) 0. 771(**) 1 ** Correlation is significant at the 0. 01 level (2-tailed). Table 8. The relationship between each factor of one perspective with the next perspective. Relationship between factors of learning perspective and three other perspectives Learning factor Process Customer Financial ** ** ** L1 0. 971 0. 793 0. 968 ** ** L2 0. 854 0. 967 0. 827** ** ** L3 0. 921 0. 916 0. 911** ** ** L4 0. 951 0. 917 0. 914** ** ** L5 0. 910 0. 793 0. 929** ** ** L6 0. 984 0. 852 0. 944** ** ** L7 0. 977 0. 884 0. 945** L8 0. 947** 0. 843** 0. 932** Relation Strongly accepted Moderately accepted
Strongly accepted Strongly accepted Moderately accepted Strongly accepted Strongly accepted Strongly accepted Relationship between factors of process perspective and three other perspectives Process factor Learning Customer Financial Relation P1 0. 880** 0. 740** 0. 889** Direct relationship P2 0. 940** 0. 964** 0. 849** Strongly accepted P3 0. 687** 0. 547** 0. 729** Direct relationship P4 0. 869** 0. 968** 0. 765** Strongly accepted ** ** P5 0. 934 0. 817 0. 888** Direct relationship P6 0. 960** 0. 752** 0. 936** Direct relationship Relationship between factors of customer perspective and three other perspectives Customer Factor
Learning Process Financial Relation C1 0. 753** 0. 711** 0. 822** Strongly accepted C2 0. 821** 0. 775** 0. 696** Not accepted C3 0. 656** 0. 579** 0. 803** Strongly accepted ** ** C4 0. 506 0. 525 0. 677** Strongly accepted C5 0. 628** 0. 664** 0. 531** Not accepted C6 0. 748** 0. 663** 0. 600** Not accepted ** ** C7 0. 957 0. 936 0. 961** Strongly accepted C8 0. 921** 0. 923** 0. 937** Strongly accepted perspective as a whole was the greatest level of interrelation between financial and non-financial factors. As it was earlier demonstrated, there is a strong direct relationship between business process perspective and inancial perspective. This relationship has not been declared as a direct relation in Kaplan and Norton Model; whilst its more analysis will be useful regarding its high occurrence rate, factors p1, p3, p5, p6 are the main reason for such strong correlation between business processes perspective and financial perspective. It shows that although, according the model, the relations are series like and bottom-up, there are other relations amongst perspectives as well which must be considered. More detailed analysis of such relations may be posed as the following: P1 high correlation with the financial perspective:
Effective dispatching of orders (in terms of price, specifications and delivery time) with financial perspective; given the status quo of the company, relation of this factor with financial perspective is so that more Mahdieh and Pedram 12529 Figure 3. The relationship between four perspectives in BSC. Figure 4. The relationship between main perspectives factors. attention to this factor will lead to faster payment by the customer and hence improvement of financial status of the company. market with financial perspective; this factor relates to R and D field. And regarding its high importance for the ustomer, it will result in faster payment and also will create direct relationship with financial perspective. P3 high correlation with the financial perspective: Degree of cooperation with distribution channels, with financial perspective; this factor affects on p1 factor and improves the performance in terms of financial perspective. P5 high correlation with the financial perspective: Speed of adopting innovations not yet introduced in the P6 high correlation with the financial perspective: Rate of supporting the groundwork for establishment of a process-based organization with financial; because of its elation with “activity based cost” (ABC) method, it has found relationship with processes and processes separation topics. Considering such direct relations between these two perspectives and their definitions, it can be concluded 12530 Afr. J. Bus. Manage. that although the offered relations in this model are verified in this case, all relations have not been considered in BSC model. Thus, consideration of all of these relations is essential to achieve the strategic goals of the company. Research limitations and suggestion for further Factors introduced in each perspective were general. In utomotive parts manufacturing section, we needed to have interviews with managers and decision makers to determine rates of these factors. During analysis of relationship among different perspectives, a direct relation was attained between customer perspective and learning and growth perspective which may be analyzed precisely in the coming studies. REFERENCES Aidemark LG (2001). “The meaning of balanced scorecards in the health care organization”. Financ. Account. Manage. , 17(1): 23-40. Atkinson AA, Balakrishnan R, Booth P, Cote JM, Groot T, Malmi T, Roberts H, Uliana E, Wu A (1997). New Directions In Management Accounting Research, J.
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