澳洲留学生Coursework Assignment for MAC_GROUP

澳洲留学生Coursework Assignment for MAC _GROUP

Introduction介绍

 

上世纪80年代，传统管理会计的慧点是以生产为导向，以成本管理为主。然而，在20世纪70年代和80年代，全球化和数字化推动马云从一种机械的方式转变为后机械的方法，以顾客为导向，专注于资源管理。随后，越来越关注风险，创造价值，与战略管理）。在这种情况下，平衡计分卡（BSC）重点是客户满意度和专注于创作有关的无形资产和战略管理的价值，事实上，符合马云的变化趋势，并渗透到组织管理的过程。

本文将阐明平衡计分卡在公共部门的应用相对于它的意图，发展和扩散的过程，以及相应的后果。它始于约BSC的发展和其显著优点的基本介绍，并随后进行它的公共扇区内出现。随后，一系列的计划和平衡记分卡在公共部门应用得到了意想不到的后果，阵列将从制度上揭。此外，结论和平衡计分卡的应用程序相关的限制将被揭示。

Up to 1980s, the conventional wisdom of management accounting (MA) was production-orientated and mainly cost management. However, during the 1970s and 1980s, globalization and digitalization droveMA changing from a mechanistic to a post-mechanistic approach, with a movement towards the customerorientation and a concentration on resource management. Subsequently, MA increasingly focuses on the risk, value creation, and strategic management (Wickramasinghe and Alawattage, 2007). In this circumstance, the Balanced Scorecards (BSC) with an emphasis on customer satisfaction and a focus on the value creation related to intangible assets and strategic management, indeed, complies with such trend of MA change, and permeate in the organizational management process.

This essay will shed light on BSC’s application in public sector with respect to its intention, development and diffusion process, and corresponding consequences. It starts with a fundamental introduction about BSC’s development and its significant advantages, and is followed by its emergence within public sector. Subsequently, an array of intended and unintended consequences of BSC’s applications in public sector would be disclosed from an institutional perspective. Furthermore, the conclusion and limitations related with BSC’s application will be revealed.

 

Development of Balanced Scorecard平衡计分卡的发展

 

This section will firstly refer back to the theoretical concept and the development of BSC, and then highlights the several major benefits brought from BSC compared with traditional performance management system (PMS). 

According to Kaplan and Norton (1996), BSC contains four interlinked perspectives - financial, customer, internal process, and learning & growth. It includes both financial and non-financial measures, and provides a mix of outcome measures (lag indicators) and performance drivers (lead indicators). BSC emphasizes the cause-and-effect relationships interrelated with four perspectives and indicates hypothesized causal relations between organization’s strategic objectives (Kaplan and Norton, 1996). BSC was firstly introduced in 1992 as an advanced PMS by Norton and Kaplan in order to better valuate intangible assets (e.g. employee skills, customer satisfaction). BSC subsequently was developed as a strategic management tool in 1996 for determining, communicating and implementing corporate strategy. In 2001, BSC was further developed by building strategy maps to translate strategy into operational terms. Thus, BSC now is not only a performance measurement system but also a strategic management tool.

There are three main benefits of BSC systems compared with conversional PMS. From performance management perspective, BSC provides a multidimensional system of performance measurement, and considers different types of stakeholders, such as customers, employees. In contrast, conversional PMS merely focuses on accounting and financial measures, which are outcomes of the process. From the aspect of strategy management, BSC integrates different perspectives and concernsmoreabout strategic alignment by coping with the conventional PMS’s problems, which are the loosely linked measurements and restricted focus on budgetary complaisance (Wickramasinghe and Alawattage, 2007). From the communication perspective, BSC systems provide a language of dialog to improve communications and collaborations across the organization (Inamdar, Kaplan and Bower, 2002). 

Emergence of Balanced Scorecard within Public Sector在公共部门出现平衡计分卡
 

This section will firstly note that New Public Management (NPM) reforms propel the diffusion of BSC in public sector, and then point out several special characteristics of public sector compared with private sector. In the early 1980s, due to recession and taxes revolts,NPM reforms, initiated by Prime Minister Margaret Thatcher in the UK and in the municipal governments in the USA,was subsequently adopted by other OECD countries (Gruening, 2001).NPM strongly emphasized on adopting PMS from private sector into public sector (Hood, 1991). In the NPM situation, under the pressures from constrained resources and urgent needs on performance improvements, BSC has been increasingly implemented by public organizations in diversified ways (Hoque and Adams, 2008). 

There are several special characteristics of public sector in comparison with private sector. Firstly, bureaucrats serve various principals, such as users, payers, politicians, professional organizations, and correspondingly have multiple tasks (Dixit, 2002). Consequently, incentives provided in public sector will be less effective, and the conflicted goals possibly will result in incongruent performance measures (Propper and Wilson, 2003). Secondly, due to nonexistence of market trading, it is quite difficult to measure the quality of services and products provided by public sector. Thirdly, the absence of the entry and exist options might lead to a lack of completion between public organizations (Propper and Wilson, 2003). In that case, as a multidimensional performance management system, BSC could facilitate public sector to satisfy the interests of differing stakeholders and to achieve multiple objectives. In addition, BSC can improve effectiveness and efficiency in public sector and make public organizations more accountable, transparent and competitive. Even though initially designed for private sectors, BSCsoon widely diffused in public sector.

 

Intended Consequences预期后果
 

As discovered in prior section, BSC is an innovative MA practice that not only acts as a performance measurement system, but also a strategic management system. It is a powerful communication tool for organisation as well. In public sector, such MA practice is advocated to adopt by the NPM so asto overcome the management bureaucratic models with a customer-focused exercise,which centred on motivation and performance, as well as more transparency and accountability (Hood, 1991).In this section, the implementation of BSC in the public sector would be referred to, and the consequences of such adoption are to be highlighted as well in the institutional context.

 

A Multidimensional Performance Measurement System多维绩效考核体系

 

Public sector is a specific segment which is directed towards the need of society and public welfare enhancement instead of profitmaximisation. While it is constrained on budget, it is also required to improve the efficiency and effectiveness of the services it provides. As traditional PMS only considers financial metrics, such practice is likely to lead managersto focus on short-term financial/budgetary outcomes, which is not the primary objective in public sector (Mendesaet al., 2012). In contrast, the additional non-financial measures in BSC offer managers a much broader view of comprehensive performance of public service, promote managers to identify and appreciate other performance drivers that lead to their strategic accomplishment.

For example, a waste service organisation in Portugal set its client perspective goal as building loyal customer base by providing excellent customer service. To achieve this objective, meaningful key performance indicators (KPIs), such as citizen satisfaction index, utilization of the deposition capacity, can be developed and summarized in BSC (Mendesaet al., 2012).Considering that the KPIs provide accurate and concise information covering most relevant and meaningful aspects of client perspective, managers will be able to effectively monitor and evaluate organisation’s performance against the set targets in order to make continuously improvement on customer service. Additionally, BSC system also can be used to monitor and evaluate managers and employees’ own performance. In accordance to elements in the expectancy theory, a BSC-based reward system will motivate employees, if meaningful rewards are linked to performance indicators that they can affect (Decoene and Bruggeman, 2006). Study on this waste service shows out of four BSC perspectives, financial only contributed to 1.75% of the 52.45% overall performance. This result confirms BSC’s significant contribution to the improved performance of public service, considering the emphasis of BSC’s balanced view on financial and non-financial factorsthat drive the performance, and the promotion of strong involvement and commitment from all levels within organisation (Mendesaet al., 2012).

 

A Strategy Alignment and Communication Tool一个战略匹配和通讯工具#p#分页标题#e#

 

BSC not only provides performance measurement, but also gives managers a clear guidance of what should be done and measured. By monitoring and evaluating KPIs, the organisation can keep aligning the short-term actions with their long-term strategic objectives. A study of BSC implementation in municipal governments in the USA and Canada suggested administrators’ perception that BSC provides a clear link between objective measures and organisation’s mission (Chan, 2004). Thus BSC system is also considered as a strategic evaluation system. 

Furthermore, by translating the organization’s vision and strategy into clear and objective performance measures,BSC is a powerful communication tool for the employees and other stakeholdersin the organisation. Internally, as the BSC communicates organisation’s vision and strategy to all levels within the organisation, employees may have a better understanding of organisation’s strategy and direction that the organisation is headed, and how they can contribute to achieving that strategic objective (Kaplan and Norton, 1996). Besides, as BSC provides employees with opportunities to discover assumptions underlying the organisational strategy, learn from different results, and perhaps offer their own contribution to future development. Such high-level involvement is likely to cause better motivation towards the improved performance (Decoene and Bruggeman, 2006). For external stakeholders, BSC translates non-financial objective into KPIs, which are much clearer and easier to be understood in order to improve the transparency and accountability of public administrations. 

This section demonstrates the linkage between BSC adoption in public sector and organisation’s institutional logic. BSC provides a framework with a shift on organisational focus from financial indicators to broader non-financial perspectives. It shares value and belief to employees on all organisational levels.Cooperated with the KPI-based reward system, BSC provides guidance of desired pattern of behaviour within the organisation. 

 

Unintended Consequences意外后果

Strategic Goal Inconformity and the Performance Measurement Dysfunction战略目标不一致和绩效评估功能障碍

 

The obvious unconscious consequence of BSC’s application in public sector is the strategic goal inconformity and the performance measurement dysfunction, which are essentially related to BSC’s assumption of cause-and-effect relationship. To begin with, as Scott (1987) argues, multiple principals would strategically pursue their corresponding interests in public sectors, which could result in goal confliction in a public agency. Accordingly, performance measures towards the numerous interests in public sectors may also contradict. It, however, is difficult for BSC’s indicators to balance and integrate various stakeholders and their interests.In addition,such substantial and conflicting interests lead to incompatible performance dimensions, implying performance measurement dysfunction ofthe assessed KPIs permeating in BSC’s real-world application (Carrillo et al., 2003).KPIs in BSC, according to Bobinski (2005), should provide rational guidance for organisations’ social behaviors in order to achieve their anticipated targets, which accords with the institutional theory.Nevertheless, distorted measures, which don’t capture complexity and altered behaviour, may contribute to performance measuremaximisationby sacrificing non-measured actions, particularly in public sector with no notion of market value or profitability(Brignall and Modell, 2000). As a consequence, focusing on measurable only would seriously limit the viewpoint of public sector and might result in the deviation in strategic management. With regard to the customer satisfaction perspective in BSC, a mere concentration on the rate of discharged patientsfollowed by KPIs’ guidance, as a typical representative, indicates more attention on the speed of treating patients rather than the high quality in the treatment process in public healthcare system.Subsequently, the reduction in treatment quality, the complaint of patients, and anadverse influence on reputation, might damage the development of public healthcare system in the long run(Conrad and Uslu, 2012).

 

Adverse Outcomes towards Satisfaction on Targeted Indicators

 

Simultaneously, referring to the real-world application of BSC, some seriously adverse outcomes might be resulted in towards satisfaction on targeted indicators from an institutional context in an example of the National Health System (NHS). The uncomfortable financial position prior to 2006 exposed a considerable external pressure for the NHS, particularly in relation to financial performance. Under such circumstance, several KPIs related with the financial perspective and customer satisfaction were established as authoritative guidance for the NHS. In order to achieve cost improvement and financial stability, over 150 posts were lost with a significant reduction in nursing level. Meanwhile, as a result of the combination or reorganisation of wards, the number of beds was reduced by about 18% between 2005 and 2008, which realized the target of a £10 million financial surplus.Accordingly,the Clinical Decisions Units (CDUs), which were aimed to improve the quality of care in Accident and Emergency (A&E) department, were reported to be used inappropriately in order to improve customer satisfaction with a no longer than four hours waiting time. Besides, some nurses without medical training in most CDUs were often relied on to initially assess the seriousness of a patient’s condition to shorten the treatment time and increase the number of discharged patients (Conrad and Uslu, 2012). Even though the set targets were fulfilled by the institutional behaviour within the NHS, the focus changed from ‘patient first’ to ‘work with the budget’ due to central committees and centralist focus raised doubt towards the quality of care in healthcare system.

 

The Potential Purpose of “Window Dressing” of Organisations组织“窗口敷料”的潜在用途

 

March and Olsen (1989) further maintains that application of BSC could just be a “window dressing” of public sector rather than a completely economically rational decision grounded on the institutional theory. According to Brignall and Modell (2000), the public raise their desire for information disclosure and transparency under the circumstance of economy, efficiency, and effectiveness. Consequently, the pressure exerted by external and internal constituencies to conform with a set of populace expectations drives public sector to take such window-dressing actions in return for legitimacy gain, approvals of objectives and rewards, and a ultimately guarantee its continued existence(Hoque, 2004). A common means of gaining legitimacy, in the view of DiMaggio and Powell (1983), is alignment with some rationalized institutional myth through some isomorphic process. The UK’s NHS, as a remarkable evidence of the isomorphic power, realized the indicator improvement from a situation with no (hospital) trusts to one in which almost every provider had converted to the trust format within 4 years. Such change, from the legitimacy view, implies that BSC is merely a type of institutional administration instead of a tool of management. From this view, public sectors may be undergoing reforms not to achieve managerial efficiency but for legitimizing themselves to the electorate, ordinary citizens, and other constituents such as media (Broadbent and Guthrie, 1992). 

To summary, the unintended consequences of BSC in public sector, involving the strategic goal inconformity and the performance measurement dysfunction related to BSC’s assumption, adverse outcomes towards satisfaction on targeted indicators, the potential purpose of “window dressing” of organisations, institutionally reveal the necessary of BSC’s development.

Conclusion总结

In conclusion, this essay focuses on the application of BSC in public sector with reference to its development and diffusion procedure, and accordingly intended and unintended consequences. To be specific, complied with the management accounting change towards the customer-orientation perspective, BSC is put forward and widespread utilized in terms of its merits, namely a mix of outcome measures, the concern about strategic alignment, and the improvement on organizational communication. Meanwhile, considered as a strategic performance management tool, BSCexerts its role to deal with the efficiency problem within public sector. In addition, the intended consequences of BSC’s application in public organisations, consisting in a multidimensional performance measurement system and a strategy alignment with the communication tool, are demonstrated in relation to the organizational institutional logic. As for its unintended consequences, in accordance with strategic goal inconformity and performance measurement dysfunction, adverse outcomes resulting from the satisfaction of targeted indicators, and potential “window dressing” actions, are exposed grounded on the institutional theory as well. Based on the above discussion, we conclude that the balanced scorecard is regarded as an institutional practice in its application within public sector by providing guidance towards social behaviour. Nevertheless, some limitations are still to be discussed. Although BSC is likely to link employees’ motivation with performance, there is no empirical data to suggest the association. Further research should be undertaken to exam the effects of BSC on individual’sbehaviours, motivation and performance. Moreover, most temporarystudies on BSC implementation in public sector are analysedwithin developed countries.However, little knowledge of such MA practice in public sector in emerging economies is involved. Future studies can be conducted to explore whether adoption of BSC framework in public sector in emerging economies would improve organisational effectiveness.#p#分页标题#e#

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