The Balanced Scorecard (BSC) is defined as a system of strategically managing and planning use in various businesses and organizations. It is used to put the activities of the business in alignment with the organization’s mission and vision. It also seeks to enhance communication both internal and external. Another function of the BSC is to check on the performance of the organization with regards to the overall goals. BSC was first used by Kaplan and Norton (2005), who used it as a framework to measure performance by putting into consideration the performance of the non-financial organizational measures as well as the financial aspect of the business to help establish a balance and provide the information to the top management for decision making. When constructing terminal 5, the British Airport Authority (BAA) adopted the use of BSC so as to reduce the cost and loses.
Comparison between British Airport Authority’s approach and BSC approach
British Airport Authority employed a strategic approach through which the objectives, the design, the needs of the project which included the basic concepts of a BSC model; the mentioned aspects to the goal of the organization. Like BSC models, the British Airport Authority used Key Performance Indicators (KPIs) to monitor the progress of the project and make alterations where it was necessary. The use of KPIs aimed to establish if the actual progress of the project was meeting the objectives after a certain time. The approach employed by the organization that helps promote working together and the eventual quality outcome since the methods used are efficient.
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The differences came because of the alteration of the BSC model to come up with one that specifically aimed to fulfill the needs of the work. As an investment that had taken a lot to plan, provide materials and the possible benefit to the transport system in the United Kingdom. As a result, there was need for tailoring the approach to the types of work involved. For example, British Airport Authority’s BSC model included the external factors such as the external contractors; aspects that does not exist in the traditional BSC model. BSC does not have the rigorous stages of studying and help reduce the risk of falling back and effectively solve problems that may arise since it would have been known long ago that the problem was going to occur. The internal environment between the British Airport Authority approach and that of BSCs approach was significantly different including those external stakeholders who played major roles in decision making for the organization.
The BSC
The balanced scorecard is a flexible model that allows and organization to make changes and that are necessary for the achievement of their own goals and needs. Every organization has its goals and in most cases tailors the activities towards the achievement of those goals. The construction of Heathrow’s terminal 5 best describes the flexibility of the BSC model. As reported by Basu, Little and Millard (2009), the management allowed the changes within the BSC model so as to help achieve their own objectives. BSC is a model that can be adopted by any organization and used to plan for and monitor the programme performance. Organizations that seek to expand their business introduce something new or even try to crack a market. Projects planned by the governments and other organizations have specific targets in terms of times, period of construction, the amounts of funds available to conduct performance monitoring and the magnitude of the problems. All the financials and the non-financial projects are catered for in this model and a little, alteration to the model to suit ones specific requirement does not do any harm.
Conclusion
The Balanced scorecards are significant tools for evaluation of the programmes successes, monitoring the performance and progress of the business and assessing the available resources and to establish the needs or if they are fulfilling their something. The main advantage of the BSC tool is its ability to me modified to suit the situation without failing to meet the quality requirements in measurements in organizational performance. This has been demonstrated by how the Heathrow Airport management who chose to use the BSC model with minor alterations to help fit and help reach the goals of the organization. As discussed, there are number similarities between British Airport Authority’s approach and BSC model. There are also differences between the British Airport Authority’s approach and the traditional BSC. The size of the projects, the number of people to cater for, the available resources to meet the needs and the speed at which the program has to be completed, play a crucial role in the differences. The British Airport Authority used the BSCs model to make the changes seen with the construction of the terminal 5 at the Heathrow airport. Despite the changes made to the BSC, there was no negative outcome as a result of any changes. This makes BSC the most suitable model of performance monitoring which should be embraced by all organizations; public and private (Coe & Letza, 2014). They can use it to assess, monitor and evaluate programmes and the standing situation of the organization both financially as well other aspects.
References
Basu, R., Little, S., & Millard C. (2009). Case study: A fresh approach of the Balanced Scorecard in the Heathrow Terminal 5 project. Measuring Business Excellence, 13(4), 22-33.
Coe, N. & Letza, S. (2014). Two decades of the balanced scorecard: A review of developments. The Poznan University of Economics Review, 14 (1), 63
Kaplan, R. & Norton, D. (2005). The Balanced Scorecard: Measures That Drive Performance. Harvard Business Review , 71-79
