Question

B) Ashesi University is Ghana’s number one university in the 2020 Times Higher Education Impact Ranking. The university presently measures its performance by comparing its actual costs against its budgeted costs for the year. Given the university’s international status, it is currently facing stiff competition from both public and privately-owned universities in Ghana. At one of its executive meetings, a member in the finance department has suggested that Ashesi needs to consider additional performance measures such as those indicated by the Balanced Scorecard.

Required:

1. Briefly elaborate on your understanding of the Balanced Scorecard and how the management of Ashesi university can utilize this approach to performance measurement [10 marks]
2. Discuss two (2) non-financial indicators (from different perspectives of the balanced scorecard) that Ashesi University could use for its performance evaluation. [4 marks]

Answer 1

Answer (i)

The Balanced Scorecard, referred to as the BSC, is a framework to implement and manage strategy. It links a vision to strategic objectives, measures, targets, and initiatives. It balances financial measures with performance measures and objectives related to all other parts of the organization. It is a business-performance management tool.

The BSC is not just a scorecard, it is a methodology. It starts by identifying a small number of financial and non-financial objectives related to strategic priorities. It then looks at measures, setting targets for the measures, and finally strategic projects (often called initiatives). It is in this latter stage where the approach differs from other strategic methodologies. It forces an organization to think about how objectives can be measured and only then identifies projects to drive the objectives. This avoids creating costly projects that have no impact on the strategy.

Management of Ashesi university can utilize this approach to performance measurement for the following:-

• Evaluates in Performance - Customers

1. Quality of Graduate
2. Quality of service to the community
3. Customer Service
4. Job Satisfaction

• Evaluates in Performance - Financial

1. Cost Focus
2. Revenue Focus
3. Training, Development and welfare activities Focus
4. Survive Focus

• Internal Business Process Perspective

1. Quality of Teaching, Learning process and other facilities
2. Management Information

• Mission Achievement

1. Mission and Objectives

• Learning and Growth Perspectives

1. Quality Assurance
2. Quality of Planning
3. Quality of Academic Staff Development
4. Quality of Management staff Development

Answer ii

Non-financial indicators (from different perspectives of the balanced scorecard) that Ashesi University could use for its performance evaluation

Non-financial KPIs are other measures to assess the activities that an organisation sees as important to the achievement of its strategic objectives. Typical non-financial indicators include measures that relate to customer relationships, employees, operations, quality, cycle-time, and the organisation’s supply chain or its pipeline. Some prefer to use the term ‘extra-financial’ rather than non-financial, suggesting that all measures that contribute to organisational success are ultimately financial. In addition to financial and non-financial, other common categorisations of performance indicators are quantitative versus qualitative; leading or lagging; near-term or long-term; input, output or process indicators etc.