Traditionally, Kotelnikov ( 2001 ) said most companies tend to measure their public presentation utilizing fiscal prosodies has bit by bit shown it weaknesses since the information are formulated based on old consequences. With quickly altering market and the promotion of engineering, the fiscal measuring entirely is an unequal step as some other factors could besides be a major influence in a companies ‘ public presentation.

As a consequence, companies have started to utilize non fiscal public presentation steps to measure their public presentation in today modern concern environment. Basically, non-financial steps is non a new phenomenon as it was adopted as early in the 1950 by General Electric house in the United Stated ( Anthony & A ; Bedford 2006 ) and by today, there are many types of non-financial or public presentation measuring systems had been use in companies. However, as stated by Johnson ( 2010 ) , the balance scorecard is the most well-known system of non-financial steps today.

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2.0 Balanced Scorecard

Based on Atkinson et Al ( 2007 ) , balanced scorecard was introduced by Kaplan and Norton in 1992 as a public presentation measuring system to steps an organisation public presentation with a comprehensive set of four different but linked positions that derived from organisation ‘s vision and scheme. Basically, balanced scorecard does non entirely stress on fiscal aims but besides non-financial aims because Kaplan and Norton believe by accomplishing these non-financial aims will finally run into its fiscal aims. Therefore, as stated above, balanced scorecard steps public presentation from four positions which are fiscal, client, internal concern procedure and, larning and growing ( Horngren et al, 2005 ) .

Mentioned by Hilton ( 2008 ) , fiscal position truly measures the profitableness of the scheme that has been imposed by company. As for the client position, director should place the targeted market sections in which the company needs to vie and pull. In term of internal concern procedure position, Kaplan & A ; Atkinson ( 1998 ) said, top degree direction should indicate out critical internal operations that significantly making the most value for client and besides increasing the stockholder wealth, in order attending will be given on these facets for betterment. Of class with these three positions are decidedly unequal because the concerns now are traveling frontward with challengers ‘ competition and engineering progress, hence Rajan ( 2010 ) said acquisition and growing position is at that place on the balanced scorecard for a company to place the substructure and scheduling that can maintain the company growing in the long-term and up-to-date. The model of the four key positions of a balanced scorecard is portrayed in figure 2.0 below.Furthermore, the four positions in the balanced scorecard will organize a chain-and-effect relationship as compared to other systems. In such, Kaplan & A ; Atkinson ( 1998 ) said cause-and-effect relationship is a set of hypotheses whereby directors will implement their scheme as trial to see the effectivity of the scheme in the company public presentation.

For illustration, a rise in acquisition and growing will decidedly better concern operation. Consequently, clients tend to experience satisfied with the services of the company which resulted higher productively in the fiscal positions.However, it is non an easy undertaking in implementing a scheme because it could besides confront failure if considerations have non taken decently by the top degree direction. For case, directors implement a scheme by giving an infinite penchant on coloring material pick for auto will increase client similitudes to buy the auto. If there were positive feedback from clients, gross revenues volume will of class rise and hence the production productiveness needs to be improved. Therefore, inducements or excess class in developing workers to go skilled in the spray profession will decidedly able to accomplish the higher volume of production. As a consequence, net income will increase which benefits the stockholders as in the fiscal position.

On the other manus, as mentioned earlier, cause-and affect relationships is a hypotheses theory, and possibly the handiness of colorss may non be favorable to clients. Therefore, the scheme impose is a failure as it did non lift the production volume.Therefore, directors should carefully specify scheme and aims for each position and subsequently supply possible steps for the aims identified. ( Horngren et al, 2005 ) . But, stated by Jazayeri & A ; Scapens ( 2007 ) , balanced scorecard public presentation steps consist of two types which are taking and lagging indexs. Harmonizing to Hilton ( 2008 ) , taking indexs guide direction to do determinations that will ensue a positive effects in future public presentation such as client satisfaction and on clip bringing, whereas lagging indexs are concluding results of fiscal steps resulted from earlier action taken by the company, for case, hard currency flow and net income.

As explained by Hilton ( 2008 ) , taking indexs is used to measure current actions that will finally better of import dawdling steps in the hereafter. As such, senior executives should hold properly identifies dawdling and taking steps for organizing a successful balanced scorecard. Besides that, Horngren et Al ( 2005 ) further mentioned, mark must besides be set for each step so the company may measure the effectivity of the steps and in conclusion, enterprises of accomplishing marks are necessary for advancing the people to travel towards the marks.

2.1 Benefits of Balanced Scorecard

Combination of both fiscal and non-financial facets in a balanced scorecard did convey many benefits in an organisation.

Based on Kaplan and Atkinson ( 1998 ) , balanced scorecard used by directors in implementing scheme that create value for current and future clients and besides heighten other necessary countries to better further is good for company future public presentation. In add-on, Yu et Al ( 2008 ) province another benefits from balanced scorecard is that the attack that interpreting scheme ends into measureable parametric quantities can really assist company to measure their public presentation. Besides that, Drury ( 2004 ) further luxuriant directors can besides place which operational steps needed to be improvised by looking at the balanced scorecard. Another benefit is that balanced scorecard can heighten communicating degree within organisation.

2.2 Limitation of Balanced Scorecard

Although balanced scorecard portrayed to be positively effectual in today modern concern direction, rather a Numberss of negative unfavorable judgments have seem appeared towards the whole thought of balance scorecards.

Based on Drury ( 2004 ) , balanced scorecard that assumes cause-and-effect relationships to be additive is excessively equivocal and deficiency of grounds because these relationships are simply hypotheses. For case, a good public presentation by employees does non necessary brings a higher net income. Therefore, this has shown there is no additive relationship between betterments in a position will transport on the following position to stand out every bit good. Another factor that criticized severely on this theoretical account is the clip slowdown ( Jazayeri & A ; Scapens, 2007 ) .

Time slowdown between a cause-and consequence could falsify the effectivity of balanced scorecard, for illustration, developing given to employees will non instantly ensue an increasing in productiveness degree. Sometimes, a cause of an action needs a much longer period to see the consequence and hence there is no coherency between the positions. Basically, it is non simple to implement an effectual cause-and-effect linkage in an organisation, as statistics shown merely 23 % out of 157 companies keep systematically verified their hypotheses and other companies do non verify cause-and-effect will non convey any values to the balanced scorecard ( Garrison et al, 2008 ) . For illustration, a fast-food concatenation directors will presume the employees turnover will evidently ensue higher net incomes, but it turn out that the supervisors turnovers is the factor that will hold impact on net income because employees turnover did non assist explains the difference across the eating houses.

Besides that, theoretical account of balanced scorecard which lay on a top to toss off attack make a barrier to it as Atkinson et Al ( 2007 ) said senior executives that merely understand the scheme or aims implemented is deficient because the whole organisation should hold working towards the aims. Therefore, those in-between and lower degree of employees should hold recognition on it or else the balanced scorecard scheme map impose by top degree direction will be wasted. Nevertheless, senior direction should besides set committedness to it and actively involved for confidence of effectual balanced scorecard has put up. A portion from that, another restriction to the balanced scorecard is clip devouring in term of brainstorming scheme map to enforce by a group of senior executives and besides expensive to implement because sometimes company hire advisers from outside to give sentiments ( Drury, 2004 ) .

3.0 Business Value Scorecard

Due to many negative reviews on the balanced scorecard, a new public presentation measuring system has started to develop, for case concern value scorecard. Business value scorecard is different as compared to equilibrate scorecard, and it is used within the BAE Systems of British Aerospace ( Jazayeri & A ; Scapens, 2007 ) . As mentioned by Jazayeri & A ; Scapens ( 2007 ) , BAE systems is 2nd largest defense mechanism contractor and their concern was dining for the first three old ages but since the autumn of Berlin Wall, the company was making bad as the portion monetary value bead enormously. Therefore, direction had started to alter concern attack to get the better of the state of affairs by traveling to denationalization. However, a important alteration in the civilization of the organisation will hold to done for the employees to accept alterations that go oning in the organisation.

Consequently, main executives implement concern value scorecard that focuses on five key values which are public presentation, people, clients, partnership and, invention and engineering to function the alterations. Basically, in public presentation cardinal value is to put best possible marks so people are besides driven to maintain continuously challenge for betterment. On the other manus, people cardinal value is non to handle employees as extension of machine because the company really does hold extremely talented skilled people working for the company. As for clients aspect is of class handle them as the highest precedence by supplying good services before and after gross revenues. Besides that, main executive besides stresses out the demands to understand and transcending the clients ‘ outlooks for the betterment in company public presentation. A portion from that, he besides did recognize that partnership with others is good for the company when come the countries that they non utilize to run, and as such, prosecuting spouses on long-run footing did favor the company in the hereafter. For illustration, Perodua is a joint venture between Malaysia and Nipponese spouses, Daihatsu will finally assist Perodua in the hereafter because partnership between both endeavors can interchange cognition for better betterment. Technologies have continually altering and so does the concern environment, hence, invention and engineering cardinal value is necessary, so the concern can remain in front.

After that, the five key values were farther reinforced by developing five ‘Value Teams ‘ in which each squad is lead by the senior line director which has the power to convey alterations of an organisation. As explained by Kotter ( 1996 ) , groups without strong leader will non possess the power required to alter even with the handiness of capable and dedicated staffs. Hence, each squad should hold strong and capable leader to steer the squad towards the alterations. Nevertheless, a changing in a civilization of an organisation certainly deals with some barriers such as opposition to alter from employees. As stated in the article by Jazayeri & A ; Scapens ( 2007 ) , about 30 % of direction in BAE can non manage the alterations and therefore go forthing the organisation. Consequently, directors should do the people feel the battle towards the civilization alteration and understand the impact of the aims steps towards the public presentation, if non they will lose their confident shortly which will ensue them to go forth ( Evan & A ; Price, 1999 ) . A portion from opposition, tenseness flair between central offices and concern units is besides another obstruction for the concern value scorecard.

Hence, top direction degree should ease the tenseness between them, so all the people will be working together on this attack.Harmonizing to Jazayeri & A ; Scapens ( 2007 ) , concern value scorecard is evolved from the old system which is known as traffic visible radiation. Traffic visible radiation is a powerful tool and it is attractive with many colorss such as green will bespeak everything on mark, brownish-yellow agencies minor bumps, ruddy coloring material represent major job that needed to take immediate action. On top of that, there are still other colorss, blue for case, bespeak it is completed, black means no study or white if there are nil to steps.

Generally, concern value scorecard that applied traffic visible radiation is utile indicant as it pulls the colors measures in a scorecard can alarm the senior directors a clear image of the company state of affairs and subsequently will take the directors to recognize other steps that should besides hold in the company.

3.1 Differences between Balanced Scorecard and Business Value Scorecard

As compared to equilibrate scorecard, concern value scorecard is different as it is emerged within organisation and it is non a top down attack as mentioned by Atkinson et Al ( 2007 ) . Truly, this attack that emerged within organisation is to heighten communicating and the barriers between central offices and concern units.

Of class the tenseness will lift on both parties when discussed on the scheme but the good thing is there are communicating from both parties which objectives steps enforce is agreeable by central offices and concern units, so they are more motivated to accomplish the mark set. Unlike the balanced scorecard, the communicating is a one manner down attack, and so the aims implement to the lower degree direction will non be effectual because the employees may non accept the scheme imposed by the seniors.Furthermore, the concern value scorecard is non concentrating on cause-and-effect relationship as in balanced scorecard but the coherency of the assorted positions. Jazayeri & A ; Scapens ( 2007 ) said the different positions have to be consistent and fit together so senior directors can organize the maps and activities of the concern as whole instead than single parts as in balanced scorecard. In other words, BAE Systems expression at the inter-relationship in the assorted steps but non the insouciant relationships as stated by Drury ( 2004 ) . In add-on, concern value scorecard can be besides used as direction control system of the organisation.

Conclusively, concern value scorecard adopted by BAE Systems is non merely designed as it evolves over a long period of clip. Of class the cultural alteration certainly received some opposition but later, directors of BAE seem to react rather positively towards the concern value scorecard. The employees besides rather accept the concern value scorecard and working together to accomplish the scheme set by top directors which lead to the success of this attack.

4.0 Decision

In decision, the balanced scorecard did turn out to be utile but it does capable to restriction particularly on the cause-and-effect relationship hypotheses. Therefore, the development of concern value scorecard has developed in the BAE Systems.

Nevertheless, companies should non merely implement a public presentation measuring system because it has to depend on the suitableness and types of concern operating. For case, fabricating mill will utilize activity-based direction ( Johnson, 2010 ) . Therefore, company should decently see the right public presentation measuring system for measuring the company ‘ public presentation.