Using a balanced scorecard to improve the financial perspective of an organisation : a case study of the Tshwane University of Technology Polokwane Campus

Abstract

The current trend in business is that the more rapidly customers are able to receive the services they require; the better the organisation can perform. However, customers’ needs are becoming progressively more complex due to the increased number of communication channels and ubiquitous business information. Serving today’s informed customers with traditional business methods have proven to be too difficult for organisations that are too rigid to change. Determining how to support business stakeholders effectively and efficiently, ranging from clients to shareholders can seem daunting; yet it does not have to be. The major objective of this study was to use a balanced scorecard (BSC) to improve an organisation’s financial perspective. A case study of the Tshwane University of Technology (TUT) Polokwane campus in South Africa was used to inform the study. This study was motivated by the fact that, as much as the BSC is widely being used to align organisations’ operations to its mission and objectives, many organisations in the developing world still use traditional financial performance measurement systems. Another motivation for the study resulted from the fact that despite the strategic positioning of the TUT Polokwane campus in Limpopo province, the campus is still failing to attract potential students and high-calibre staff. The study modified the BSC for non-profit organisations (Kaplan & Norton, 2001) to come up with a conceptual framework that suits the TUT Polokwane campus environment. Secondary and primary data were used. Secondary data was obtained by reviewing relevant documentation that contributed to identifying key performance measures. These measures were used to develop the instrument for collecting primary data. Primary data was analysed quantitatively. The results of the study showed that many of the questionnaire items were good. Three of the six hypothesised relationships between the six constructs and the improvement of the financial perspective were fully supported, while the other three were partially supported. Relevant modifications were made to the measuring items and consequently, the BSC. The modified BSC that was a result of this study can be used as a reference framework by universities that wish to implement it within their settings. To the management of the TUT Polokwane campus this study will serve as a standard to set the business operations congruent to the university’s mission and vision. This study recommends that future research should consider using longitudinal surveys since users’ perception and customer needs change as the business environment changes. The study also emphasised the need for continuous review and modification of the resultant BSC that will be introduced at the campus in order to cope with the ever-increasing changes in business and technological developments.