Appraising implementation of balanced scorecard as an effective strategic performance measurement tool towards privatisation of public utilities (state owned enterprises - SOE) : case study approach within Gulf Cooperative Council countries

Al-Jarwan, AE

Abstract

Privatisation as a global phenomenon has seen a large number of State Owned Enterprises (SOEs) transforming their individual assets into privately owned and
controlled enterprises. The impact of this transformation might be critical not only for the country but also for the organisation's own existence. Research in this field
has shown that the risk associated with it can be reduced if strategic tools are introduced to measure and improve the performance of the organisations before and
after this process. The Balanced Scorecard (BSC) is one such strategic management tool, which is used to reinforce the implementation of business strategies, in both public and private sectors. This study aims to explore the effectiveness of BSC performance as a strategic tool to successfully assist SOEs in the Gulf countries, which plan for privatisation or indeed have already initiated privatisation.
To accomplish this aim, the research has been carried out in three phases. The first phase investigates the role of BSC as one of the principal tools in restructuring
organisations for better performance, and understands the rationale of SOEs opting for privatisation. The second phase attempts to validate the hypotheses drawn from
the literature pertaining to the concepts of BSC and its approach towards SOE privatisation enabling golden rules to be drawn up. In the third phase, derived BSC model for SOE within Gulf countries pursuing privatisation is prepared,
supplemented by the possibility of testing this prototype model through five defined tasks.
An in-depth literature review has been carried out on Privatisation, Strategic Management and the BSC. By focusing on the micro level of SOE privatisation, the
study highlights the factors that influence the privatisation process of position in the organisation in its chosen market as a key to success. In this context, the BSC is placed as an important assessment strategic tool and as an alternative to the traditional financial indicators. BSC converts an organisation's vision and strategy into a comprehensive set of performance and action measures that provide the basis for a strategic measurement and management system. Its four perspectives remain the same: financial, customers, internal business processes, and learning and growth.
This study has recommended the derived BSC model, which addresses the realignment in the perspectives according to the privatisation objectives pursued by a given SOE. The transformation observed from a customer perspective towards a financial perspective has been in the interest of stakeholders. The hierarchical dominance of the financial perspective in the model seems to be the focal change to
foster productivity in terms of customer relationship, quality excellence, and other well-defined internal processes. The derived model also integrates a strategyfocused approach which involves translating strategy into operational terms, aligning the organisational resources to strategy, maintaining a continual process of monitoring its performance measures, and mobilising change through executive leadership. Finally, collateral findings on issues such as leadership and management, change management, organisation behaviour, and system implementation, and cultural barriers of Gulf countries add value to the proposed model. Thus an
academic extension towards accomplished path of project management during management studies enabled the researcher to contribute the derived model of BSC in manoeuvring the performance indicators for SOE pursuing privatisation.

Citation

Al-Jarwan, A. Appraising implementation of balanced scorecard as an effective strategic performance measurement tool towards privatisation of public utilities (state owned enterprises - SOE) : case study approach within Gulf Cooperative Council countries. (Thesis). University of Salford

• Thesis Type: Thesis
• Deposit Date: Oct 3, 2012
• Award Date: Jan 1, 2004