Investigation of the application of balanced indicator systems for the evaluation of companies’ performance
Abstract
Performance appraisal is one of the most important business processes in a company. Although many authors write on this topic, the topic remains relevant due to the need to analyze the performance and uniqueness of companies, as each author conducting research must adapt the most appropriate system of indicators to the selected companies. Analyzing the scientific literature, it has been noticed that most of the articles on the topic of balanced indicators are prepared by foreign authors, and in Lithuania this topic is not widely developed. The problem of the article is: how to create a system of balanced indicators to evaluate the performance of selected companies. The aim of the research is to theoretically substantiate and empirically evaluate the performance of companies in the sales sector using a system of balanced indicators. For any company that wants to work profitably, performance appraisal from a variety of perspectives is very important. This is the method of assessment used in this article, which looks at a company’s performance from four perspectives: finance, customers, internal processes, and improvement and development. The study selects companies of a similar nature and size from the sales sector. Companies of a similar nature are selected in order to obtain more accurate results and to avoid exclusions. Methods used in the article: analysis of scientific literature, comparison of theoretical insights, system of balanced indicators, method of multicriteria evaluation – EDAS. The system of balanced indicators and the EDAS ranking method help to determine the competitiveness of companies and to interpret which perspective of the company’s activities needs to be improved in order to make the company’s operations more profitable and efficient.
Article in Lithuanian.
Subalansuotų rodiklių sistemų taikymo įmonių veiklai vertinti tyrimas
Santrauka
Veiklos vertinimas – vienas iš svarbiausių įmonės veiklos procesų. Nors šia tema rašo daug autorių, tačiau tema išlieka aktuali dėl poreikio analizuoti įmonių veiklą ir unikalumo, nes kiekvienas autorius, atliekantis tyrimą, turi pritaikyti pasirinktoms įmonėms tinkamiausią rodiklių sistemą. Analizuojant mokslinę literatūrą pastebėta, kad didžioji dalis straipsnių subalansuotų rodiklių tema yra parengta užsienio autorių, o Lietuvoje ši tema nėra plačiai išplėtota. Straipsnyje keliama problema: kokią sukurti subalansuotų rodiklių sistemą, kad galima būtų įvertinti pasirinktų įmonių veiklą. Tyrimo tikslas – teoriškai pagrįsti ir empiriškai įvertinti pardavimų sektoriaus įmonių veiklą taikant subalansuotų rodiklių sistemą. Kiekvienai įmonei, kuri nori dirbti pelningai, labai svarbus veiklos vertinimas iš įvairiausių perspektyvų. Būtent toks vertinimo būdas taikomas šiame straipsnyje, kai į įmonės veiklą žvelgiama iš keturių perspektyvų: finansų, klientų, vidinių procesų ir tobulinimo bei plėtros. Atliekamame tyrime pasirenkamos panašaus pobūdžio ir dydžio įmonės iš pardavimų sektoriaus. Įmonės pasirenkamos panašaus pobūdžio tam, kad būtų galima gauti tikslesnius rezultatus ir nebūtų išskirčių. Straipsnyje taikomi metodai: mokslinės literatūros analizė, teorinių įžvalgų palyginimas, subalansuotų rodiklių sistema, daugiakriterio vertinimo metodas – EDAS. Subalansuotų rodiklių sistema ir EDAS rangavimo metodas padėjo nustatyti įmonių konkurencingumą ir interpretuoti, kurią įmonės veiklos perspektyvą reikia tobulinti, kad įmonės veikla taptų pelningesnė ir efektyvesnė.
Reikšminiai žodžiai: subalansuotų rodiklių sistema, įmonių veiklos vertinimas, pardavimų sektorius, EDAS metodas, efektyvumas, konkurencingumas.
Keyword : system of balanced indicators, evaluation of companies’ performance, sales sector, EDAS method, efficiency, competitiveness
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Al-Zwyalif, I. M. (2017). Using a balanced scorecard approach to measure environmental performance: A proposed model. International Journal of Economics and Finance, 9(8), 118. https://doi.org/10.5539/ijef.v9n8p118
Anthony, P., Behnoee, B., & Hassanpour, M. (2019). Financial performance evaluation of seven Indian chemical companies. Decision Making: Applications in Management and Engineering, 2(2), 81–99. https://doi.org/10.31181/dmame1902021a
Apylavaitė, J. (2017). Įmonės vertės nustatymo metodų taikymas [Magistro baigiamasis darbas, Mykolo Romerio universitetas]. Vilnius.
Asmarawati, S. G., & Pangeran, P. (2021). ISO 31000-based risk management and balanced scorecard to improve company performance: A case study at Indonsian YNK Tour and Travel Company. International Journal of Multicultural and Multireligious Understanding, 8(3), 376. https://doi.org/10.18415/ijmmu.v8i3.2341
Černiauskė, G. (2019). KPI rodikliai? https://gintautec.com/naujienos/39-kpi-rodikliai/
Danesh Asgari, S., Haeri, A., & Jafari, M. (2017). Integration of balanced scorecard and three-stage data envelopment analysis approaches. Iranian Journal of Management Studies, 10(2), 527–550.
Dinçer, H., Hacıoğlu, Ü., & Yüksel, S. (2017). Balanced scorecard based performance measurement of European airlines using a hybrid multicriteria decision making approach under the fuzzy environment. Journal of Air Transport Management, 63, 17–33. https://doi.org/10.1016/j.jairtraman.2017.05.005
Dobrovic, J., Lambovska, M., Gallo, P., & Timkova, V. (2018). Non-financial indicators and their importance in small and medium-sized enterprises. Journal of Competitiveness, 10(2), 41–55. https://doi.org/10.7441/joc.2018.02.03
Dwivedi, R., Prasad, K., Mandal, N., Singh, S., Vardhan, M., & Pamucar, D. (2021). Performance evaluation of an insurance company using an integrated balanced scorecard (BSC) and best-worst method (BWM). Decision Making: Applications in Management and Engineering, 4(1), 33–50. https://doi.org/10.31181/dmame2104033d
Gheorghe, M., Moritz, M., & Tarara, A. (2019). Development of a KPI evaluation application for small and medium sized companies. University Politehnica of Bucharest Scientific Bulletin, Series C, 81(1).
Gong, Y., Ying, W., Yu, Y., Zhou, X. Z., & Fan, X. (2021). Research on the key performance evaluation methods of enterprises using BSC and KPI based on analytic hierarchy process – illustrated by the case of Hangzhou cigarette factory. E3S Web of Conferences, 251, 01067. https://doi.org/10.1051/e3sconf/202125101067
Hafshjani, M. J., Najafi, S. E., Lotfi, F. H., & Hajimolana, S. M. (2021). A hybrid BSC-DEA model with indeterminate information. Journal of Mathematics, 2021, 8867135. https://doi.org/10.1155/2021/8867135
Hansen, E. G., & Schaltegger, S. (2018). Sustainability balanced scorecards and their architectures: Irrelevant or misunderstood? Journal of Business Ethics, 150(4), 937–952. https://doi.org/10.1007/s10551-017-3531-5
Jassem, S., Zakaria, Z., & Che Azmi, A. (2021). Sustainability balanced scorecard architecture and environmental performance outcomes: A systematic review. International Journal of Productivity and Performance Management, 71(5), 1728–1760. https://doi.org/10.1108/IJPPM-12-2019-0582
Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard–measures that drive performance. Harvard Business Review, 70(1), 71–79. https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2
Karabasevic, D., Kazimieras, E., Stanujkic, D., Popovic, G. I., & Brzakovic, M. (2018). An approach to personnel selection in the IT industry based on the EDAS method. Transformations in Business and Economics, 17(2), 54–65.
Kozyriūtė, L. (2018). Šiuolaikinės veiklos vertinimo sistemos: lyginamoji analizė. Iš VU EVAF studentų mokslinės draugijos konferencijos straipsnių rinkinio (p. 126–136). Vilniaus universiteto leidykla.
Kvietkauskienė, A. (2017). Įmonių finansinio stabilumo vertinimas – vienas iš sėkmingo investavimo komponentų. Socialinis ugdymas, 47(3), 150–165. https://doi.org/10.15823/su.2017.28
Kylili, A., Fokaides, P. A., & Lopez Jimenez, P. A. (2016). Key Performance Indicators (KPIs) approach in buildings renovation for the sustainability of the built environment: A review. Renewable and Sustainable Energy Reviews, 56, 906–915. https://doi.org/10.1016/j.rser.2015.11.096
Lakshmi, B., Bhagyalakshmi, M. K., & Saraswathi, S. (2019). A study on financial performance evaluation using DuPont analysis in select automobile companies. International Journal of Management, 9(1), 354–362.
Lee, S., Costello, F. J., & Lee, K. C. (2021). Hierarchical balanced scorecard-based organizational goals and the efficiency of controls processes. Journal of Business Research, 132, 270–288. https://doi.org/10.1016/j.jbusres.2021.04.038
Legeckaitė, K. (2013). Įmonių veiklos efektyvumo vertinimas taikant subalansuotų rodiklių sistemą [Magistro baigiamasis darbas, Mykolo Romerio universitetas]. Vilnius.
Lindermüller, D., Sohn, M., & Hirsch, B. (2022). Trading off financial and non-financial performance information to evaluate state-owned enterprise performance – a process tracing-experiment. International Public Management Journal, 25(5), 639–659. https://doi.org/10.1080/10967494.2020.1799888
Mackevičiūtė, J. (2018). Logistikos įmonės veiklos vertinimas [Magistro baigiamasis darbas, Mykolo Romerio universitetas]. Vilnius.
Marr, B. (2012). Key Performance Indicators (KPI): The 75 measures every manager needs to know. Pearson.
Paulauskaitė, K. (2021). Vidiniai ir išoriniai įmonės vertės veiksniai [Magistro baigiamasis darbas, Vilniaus universitetas]. Vilnius.
Paustian, M., Wellner, M., & Theuvsen, L. (2015). The balanced scorecard as a management tool for arable farming. International Journal on Food System Dynamics, 6(3), 147–158. http://centmapress.ilb.uni-bonn.de/ojs/index.php/fsd/article/view/633
Poddar, A., Seema, S. P. A., Murali, S., & Seema, A. (2017). Employee loyalty, organizational performance & performance evaluation – a critical survey. IOSR Journal of Business and Management, 19(8), 62–74.
Quesado, P., Guzmán, B. A., & Rodrigues, L. L. (2018). Advantages and contributions in the balanced scorecard implementation. Intangible Capital, 14(1), 186–201. https://doi.org/10.3926/ic.1110
Rekvizitai. (n. d.). Įmonių katalogas, įmonės. https://rekvizitai.vz.lt/
Ruli, C., & Kristanto, H. (2021). Implementation of balance scorecard and key performance indicator on customer service employee productivity. EUREKA: Social and Humanities, 4, 26–32. https://doi.org/10.21303/2504-5571.2021.001988
Sabol, A., & Sverer, F. (2017). A review of the economic value added literature and application. UTMS Journal of Economics, 8(1), 334–344.
Sarraf, F., & Nejad, S. H. (2020). Improving performance evaluation based on balanced scorecard with grey relational analysis and data envelopment analysis approaches: Case study in water and wastewater companies. Evaluation and Program Planning, 79, 101762. https://doi.org/10.1016/j.evalprogplan.2019.101762
Soltani, M. R., Edalatpanah, S. A., Sobhani, F. M., & Najafi, S. E. (2020). A novel two-stage DEA model in fuzzy environment: Application to industrial workshops performance measurement. International Journal of Computational Intelligence Systems, 13(1), 1134–1152. https://doi.org/10.2991/ijcis.d.200731.002
Tanackov, I. (2016). Evaluation in logistics using combined AHP and EDAS method. In International Symposium on Operational Research SYM-OP-IS, XLIII, Tara, Serbia.
Tätilä, J., Helkiö, P., & Holmström, J. (2014). Exploring the performance effects of performance measurement system use in maintenance process. Journal of Quality in Maintenance Engineering, 20(4), 377–401. https://doi.org/10.1108/JQME-07-2013-0051
Turshan, M. N., & Karim, N. A. (2019). The effect of adopting Balanced Scorecard (BSC) as strategic planning tool on financial performance of banks operating in Palestine. Asian Social Science, 16(1), 95. https://doi.org/10.5539/ass.v16n1p95
Vafaee Najar, A., Tabatabaee, S. S., Houshmand, E., Ebrahimipour, H., & Zomorodi Niat, H. (2021). Balanced and imbalanced performance evaluation using balanced scorecard and analytic hierarchy process. Journal of Patient Safety & Quality Improvement, 9(2), 79–90.
Vaitasė, L. (2018). Kauno Šilainių poliklinikos e. sveikatos sistemos vertinimas taikant subalansuotų veiklos efektyvumo rodiklių sistemą (SVERS) [Magistro darbas, Lietuvos sveikatos mokslų universitetas]. eLABA.
Xie, D., & Deng, H. (2021). Practice of EVA-based balanced scorecard in the construction of performance evaluation system. Mobile Information Systems, 2021, 5198364. https://doi.org/10.1155/2021/5198364