PRACTICE AND CHALLENGES OF BALANCED SCORECARD IMPLEMENTATION IN ETHIO TELECOM

Abstract

The Balanced Scorecard (BSC) is a performance measurement and strategic management system which appears suitable for use by all types and sizes of business. The BSC‟s greatest strength for most businesses comes from its innate ability to integrate financial and non-financial measures together by measuring both strategic and business performance across four interrelated perspectives. However, unless the company exerts special effort for the implementation of BSc, it may not get its contribution. Thus, the purpose of this paper is to assess the contribution and challenges of BSc implementation in Ethio telecom. Mainly, this study tries to find out the challenges that faced by the organization and the contribution under four perspectives while implementing BSC. The study adopted descriptive research method to assess the implementation of BSC in Ethio telecom and to collect the data semi structured interview and questionnaire have been used. Similarly, to select the sample size from each division the researcher were used stratified sampling technique and based on this 371 questionnaires were distributed to each division according to their strata proportion and out of the distributed questionnaires 333 were returned. On the other side, for semi structured interview the study adopted purposive sampling technique to select the interviewee who have the working knowledge of the study area. To analyze the response that got from the respondents the study used SPSS and presented by graph, table and pie chart. The study result shows that the major challenges that the organization faced are lack of knowledge on how to cascadecorporate strategy, lack of IT support, the template that used to measure the performance is difficult to use, some measures are couldn‟t be measured qualitatively, poor commitment of higher level management and the manual nature of BSc makes difficult to control its implementation. In the contrary, Ethio telecom got benefits from the implementation of BSC that most of employees starting doing their tasks based on plan and target and resources are utilized cost effectively. Hence, to eradicate the identified challenges the researcher recommended that the organization should give adequate training on how to cascade and implement corporate BSC, to make the template easy the organization should assign at least one IT person for each division, the organization should try to identify the metrics that measured qualitatively and to get the greatest contribution of BSC the organization should systemize its deployment.