Fouad Basrawi-M00466885

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Declaration of Originality
I hereby declare that this project is entirely my own work and that any additional sources of
information have been duly cited.
I hereby declare that any internet sources, published or unpublished works from which I have
quoted or drawn reference have been referenced fully in the text and in the contents list. I
understand that failure to do this will result in a failure of this project due to Plagiarism.
I understand I may be called for a viva and if so must attend. I acknowledge that is my
responsibility to check whether I am required to attend and that I will be available during the
viva period.
Signed …………………………………………………………….
Date …………………………………………………...................
Name of Supervisor ………………………………………………..

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The Valuable Impact of the Balanced Scorecard on Saudi Arabian
Companies
Fouad Basrawi
M00466885
Middlesex University Business School
Msc Financial Management
2014/2015
Supervisor: Dr. Jatin Pancholi
6th May, 2015

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Abstract:
This research aims to represent an insightful understanding about the beneficial impacts of
implementing the BSC through Saudi Arabian companies. From an economic perspective,
due to its fast and consistent growth, Saudi Arabia is considered by many to be one of the top
emerging economies. This paper is part of broader research seeking to know whether Saudi
Arabian companies are aware of the BSC concept or they apply other techniques to measure
its performance. Questionnaire and telephone interview were carried on seven companies, in
order to provide understanding into the degree of implementation in addition to the beneficial
issues that the BSC has bring for the companies. The results showed that slightly few
companies are aware of the BSC approach; however, the majority of the companies are not
considering or currently using the BSC.
Acknowledgment:
I would like to thank my family for the opportunity and support they offered me for
undergoing my Master’s Degree and in successfully completing this dissertation.
I also would like to thank my supervisor Dr. Jatin Pancholi for his feedback and assistance
that had smoothed the work for me.
I give Special thanks for my colleagues in Saudi Arabia that supported me allocating the right
contacts for the company being surveyed.
Finally I would like to thank the Saudi Cultural bureau for the financial support and
assistance they offered me in completing my studying years.

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Contents:
Title Page Number
Title Page......................................................................................................2
Abstract ...........................…………………………………………………...3
Acknowledgment ...................................................................................…...3
CHAPTER ONE: INTRODUCTION………………………………….….8
1.1 Introduction………………………………………………………….......8
1.2 Context and Significance of the Study.....................................................9
1.3 Research Question ...…………........……………………………….…...10
1.4 Research Objectives……………………………………………………. 11
1.5 Limitation of the Study………………………………………………..….11
1.6 Layout of the Study...................................................................................12
CHAPTER TWO: Literature Review and Analytical Framework ...............13
2.1 Introduction……………………………………………………………......13
2.2 Balanced Scorecard Concept…………………………………………...….14
2.3 Balanced scorecard promise........................................................................16
2.4 The cause and effect of the BSC’s four perspectives...................................17

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Title Page Number
2.5 Research method and limitation of the BSC …...................................................18
2.6 Companies performance within BSC ..........…………………………..…….......19
2.7 Implementation process of the BSC.....................................................................21
2.8 Summary............................................................................................................. .31
CHAPTER THREE: Research Methodology, Research Methods, and Data Collection
……………….............................................................................................................31
3.1 Introduction…………………………………………………………….................31
3. 2 Research Methodology ……………………………...............................…..........32
3.3 Research Methods….………………………………………………...….…..........33
3.4 Research Design……………………………………………….......…...……........35
3.5 Data Sources and data Collection …………………………………...………........35
CHAPTER FOUR: Discussion and Analysis.......................................…………..…36
4.1 Jude Water Case Study ……………………………………………………....…...37
4.1.2 Jude Water analysis .....................................................…..................................37
4.2.1 Introduction HAYAT BUILDING MATERIAL COMPANY AND UNITECH
…………………………………………………..........................................................38
4.2.2 Analysis of the group .....................…………………………….........................39

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4.2.3 Implementation of the BSC at IKK group................................................ 39
4.3.1 Omix Introduction ….......................................................…………......................40
4.3.2 Omix Analysis …………….......................................…………........................…41
4.3,3 Implementation of the BSC at Omix …………........………….......................41
4.4.1. Introduction Al Yaseen Agri ..................…………………......….....................42
4.4.2. Analysis of Al Yaseen Agri ……………………………………….......................43
4.4.3. Implementation of the BSC at Al Yaseen Agri ………………...….....................43
4.5.1. Introduction Jarir Book Store …………………………………….......................44
4.5.2. Jarir Analysis …………………………………………………….......................45
4.5.3. Implementation of BSC at Jarir Book Store.........................................................45
4.6.1. Introduction United Cooperative Assurance.......................................................46
4.6.2. United Cooperative Assurance Analysis ..............................................................47
4.6.3. Implementation of BSC at United Cooperative Assurance...................................47
4.7.1 Introduction Bahri Company .................................................................................48
4.7.2 Bahri Company Analysis........................................................................................48
4.7.3 Implementation of BSC at Bahri Company ............................................................49

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CHAPTER FIVE: Analysis of Evidence from the case Studies ….........................52
5.1 Introduction ........................................................................................................52
5.2. Analysis of Data.................................................................................................53
Chapter 6: Conclusions and Recommendations ....................................................54
6.1 Summary............................................................................................................54
References.............................................................................................................56
Appendix.................................................................................................................59
Title Page Number
List of Figures
Figure 2-1 Balanced Scorecard Strategy Map…......................…...............………40
Figure 2-2 Balanced Scorecard Quadrants……………………………..................42
Figure 2-3 Examples of Quadrants Objectives and Measures…………….……….42
Figure 2-4 Numbers of Voyages performed by Vlcc in 2013 VS 2012...................44
Figure 2-5 Break Down of VLCCs Voyages by route 2012 VS 2013..............……44
Figure 2-6 Oil Transportation Voyages During 2013...............................................44

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Chapter 1: Introduction
This section highlights the research content which is about the valuable impact of
implementing the balanced scorecard (BSC) in Saudi Arabian companies. Hence, it has a
brief overview of the research as well as the main subject selected for the study. This section
starts by stating a summarized background for the economical environment of Saudi Arabia.
Moving on, it will discuss the context and significance of the study, followed by the research
question. After that, it will identify the research objective. Bearing this in mind, the paper
will also discuss the limitations of the research and the final section will draw on the main
elements within each chapter of this research paper.
1.1. Introduction
The 2008 financial crisis had left long term influence on the world economy up till present,
affecting the stock markets, MNC’s and other various sized enterprises that had suffered a
great loss and economic deficit. As a consequence of this dreaded event, a high rise in
unemployment rate, inflation rate, poverty as well as less balance trade activities has been
witnessed. The Arabian Gulf and Egypt are the most Arabian countries which were affected
by the crisis since they have a direct contact with the world economy. One of the main
reasons behind the failure of the organizations is that they were structured in a very weak
frame work that involved in lack of management and monitoring that had resulted in its
collapsing from facing any economic deficiency. Maintaining the good performance and
structure of organization is not an easy job as individual believe. It must be linked by
developed strategies and measures which will have a direct influence on the organization in
both period short and long run. Most organization possesses a well-developed and innovative

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strategies but had failed in implementing them accurately which resulted in effecting its
performance negatively.
The kingdom of Saudi Arabia is considered as the largest oil producer and exporter in the
world, where a large proportion of its income is derived from the oil industry. The country
has witnessed a high economic growth by diversifying its investments and subsidizations into
different field in the Kingdom. Such investments had led to develop a very solid and active
market structure which had a very good impacts for both group who are interested in
investing in the country whether the local citizen or foreign investors. It’s concordant with
facts that Saudi Arabia economy is flourishing and implementing high efforts to decrease
some of the factors that have a direct influence on its economy and reputation.
1.2 Context and Significance of the Study
The developed and followed strategies implemented by the company play a very
significance role in leading the company to its success or fiasco. As it has been noticed
recently, the high competitiveness among organizations will state the necessity of choosing
the most suitable strategies along with implementing them which has been considered as the
ultimate challenge. The balance scorecard was created by Robert Kaplan and David Norton in
1992, which has earned a great deal of popularity from different corporations, is also
considered one of important and popular tools employed by the organizations which
contribute in allocating the link between the alternative options of strategy along with its
implementation process. Applied by several different organizations such as government’s
business industries and non-profit organization the balance scorecard was able to prove the

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improvement that were engaged in different areas, such areas include: the organizational
communications, fitting the business activities with the vision and the strategy of the
organization and, monitoring the total performance of the organization in parallel with their
objectives. The balance scorecard apply four various approaches to examine the total
performance of the organization along with helping it meet its objectives. These approaches
include: the financial perspective, the growth and learning perspective, the internal process
perspective, and the customer perspective. By implementing and aligning with those
approaches it will defiantly contribute for a better performance measurement for the
organizations.
1.3 ResearchQuestion
The present debate of this research will address some questions concerning the issue of
whether implementing the balance scorecard (BSC) will generate positive influences on the
company performance. The main research question for this study focuses on:
1. To what extent the BSC benefits Saudi Arabian companies in their management in
order to achieve more goals efficiently?
2. Is there a link between BSC and other performance indicators?
This study systematically reviews the data and tools for one of the significant key elements in
measuring organization performance which is known as the balance scorecard

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1.4 ResearchObjectives
The main purpose of this research is to find out a result that can be linked with the research
objectives of the company. Following are the research objective for this thesis that needs to
be evaluated and the outcome may be found out.
1. What is the performance measurement methods implemented across organisation?
2. Are there any non financial methods to measure performance of the company?
3. What does the company and employees know about the balance score card?
4. To what extent the company has implemented the balance score card in its organisation?
5. If there is any balance score card, is it linked to the key strategy of the company?
1.5 Limitations of the study
The researcher used primary and also some secondary data in such way that each information
source should complement each other to produce an effective result. Every possible step has
been taken to achieve the desired result from this study. However, there are certain
limitations with this study which are as follows:
- The researcher could possibly have unwittingly acted in a biased manner during the
collection of data
- It was very time consuming to collect a large data sample by selecting organisations
in Saudi Arabia
- The number of organisations selected for this research may not be truly representative
of Saudi industry

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- The researcher didn’t use any sampling techniques for this study when selecting the
data
- The organisations studied in this research were mostly small and private where
Balanced Scorecards have not been implemented
- The case study for this research is not truly representative of the different industrial
sectors found across the entirety of Saudi Arabia
- The researcher possibly placed too much emphasis on private limited companies
- Due to confidentiality reasons, some of the managers didn’t answer all of the
questions
- Questionnaire was not answered accordingly towards its target, because candidate do
not have any background about the BSC approach.
1.6 Layout of the study
The overall structure of the study takes the form of six chapters, including this
introductory chapter. Chapter Two begins by revealing a variety of literature review and
analytical framework. The third chapter is concerned with the methodology, data sources and
collection used in this study. The fourth section explains the discussions and findings of the
research. Chapter five will clarify the analysis of evidence from the case Studies
implementation of this tool on the Saudi Arabian companies. Chapter six will give a brief
conclusion and recommendation of this research.

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Chapter 2: Literature Review and Analytical Framework
2.1. Introduction
The modern business environment is characterized by a high degree of
competitiveness between organizations and, therefore, choosing the right strategies and
implementing them properly has been a crucial challenge. Strategy is a fundamental key for
any organization to achieve a favourable outcome. It provides the organization with
convenient guiding principles and measures for the purpose of obtaining specific goals and
targets. MacCrimmon (1993, 115) explained that an organization ought to have planned a
symmetrical sequence flow of actions involving resource deployment in order to single out its
strategy. Pinnell (1986, 28) elucidated the purpose of setting objectives by the management in
order to identify the future position of the organization by specifying the required steps and
operations to achieve such objectives. Failure to understand the objective clearly will obstruct
the organization’s activities. Furthermore, planning may be effective in some parts of the
organization but failing in other parts (ibid). MacCrimmon (1993, 117) stated that strategy
aims to achieve objectives; therefore, regulating the executed actions is important. Ohmae
(1982, 92) clarified that strategies can be defined as the technique used by an organization to
distinguish itself positively from its competitors. All of this debate concerning the strategy
operations within organizations demonstrates how crucial is the role of corporate
management through planning, organizing and executing actions and decisions to proceed
towards the stated goals.
2.2. Balancedscorecardconcept

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The Balanced Scorecard (BSC) framework, developed by Robert Kaplan and David
Norton in 1992, is a tool that measures the drive performance of an organization as well as
translating strategic objectives into a set of performance measures (Kaplan and Norton, 1993,
P.2). Used by businesses, industries, governments and non-profit organizations, the BSC has
proved useful for delivering improvements in internal and external communications. The
BSC contributes to improving the organization’s vision, objectives, core values and
performance measures and is able to measure financial and nonfinancial metrics (Kulkarni,
Messina et al., 2008, 1166). According to Abu Sharma (2009, 2), the purpose of the BSC is to
direct, control and support an organization’s long-term strategy. Gumbus (2005, 619) stated
that the BSC also helps in aligning business activities with the vision and strategy of the
organization and in monitoring the overall performance of the organization with respect to
the strategic goals set. The BSC uses four different perspectives to consider the overall
performance of the organization and in helping it meet its strategic goals.
According to Kaplan and Norton (1996, P.56), the four perspectives of the BSC play
an important role in aligning different measures such as short- and long-term intentions, hard
and soft objectives, and between required outcomes and the performance drivers of those
outcomes. These perspectives include: the financial perspective, the growth and learning
perspective, the internal process perspective and the customer perspective. The need for
financial data is not disregarded by the BSC. Funding data must be accurate and timely in
order for any organization to function well because it is a key perspective for its success
(Sharma, 2009, pp.7-16). Financial measures will indicate whether the implementation and
execution of the organization’s strategies are working effectively to meet the required
outcome (Kaplan and Norton 2006, P.6). Financial perspective is divided into different

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financial themes: growth strategies which aim to expand revenue scope and customer value,
whereas productivity strategies involve improving cost and asset utilization (Wu and Hung
2007, p.775). These themes can be employed with any of the business strategy events such as
growth, sustain and harvest depending on the intended objectives and situation (Kaplan and
Norton 1996, p.56). The second perspective involves training the employees and developing
cultural attitudes: the learning and growth perspective. Workers in the current climate must
be in continuous training and learning processes in order to deliver organizational self-
improvement. Kaplan and Norton (1996, p.64) postulated that learning and growth will
determine the framework that the organization must develop to create long-term growth and
improvement by employing the mean of human, information and organization capital (Wu
and Hung, 2007 p.775). Kaplan and Norton (1996, p.64) point out that organizations tend to
train their employees, develop better information technology and systems and align their
objectives in order to close the gap that is revealed from other perspectives between the
existing capabilities of the organization and the required performance to achieve certain
targets. The third perspective, which is the internal process, addresses which actions are most
effective for satisfying both customers and shareholders. According to Kaplan and Norton
(1996, p.62), the internal process perspective will outline some key aspects for executives to
focus on and which the organization must excel at which, in return, will increase customer
satisfaction and shareholder expectations. Norreklit (2000, p.67) believes that the internal
process perspective describes the organization’s operation for achieving the required targets
in order to continue growing and add value to customers. The internal process perspective
will deliver an integrated set of objectives and measures for both periods: the long-term
innovation cycle and short-term operation cycle (Kaplan and Norton, 1996, p.63). The fourth
element is the customer perspective. As Kaplan and Norton stated (1992, p.73), in this
perspective the BSC will require managers to render their mission statement for customer

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service into specific measures that are concerned with the matter of customers. In other
words, the customer perspective will focus on the target market which must be determined
along with the organization’s policies in serving them. The way in which customers are
viewed is the key to success in this category. According to Kaplan and Norton (1996, p.59),
this perspective will direct managers in identifying the market and customer sector that the
business unit must excel in and measure business performance in such sectors. Moreover,
they emphasized the importance of measures included in this perspective that will result in
producing good outcomes. Such measures include customer retention, customer acquisition,
customer profitability and customer satisfaction. Kaplan and Norton (2006, p.6) stated that
when organizations tend to achieve the desired value and quality of their customer demand,
they will build customer loyalty and profit will then increase. Jones and Sasser (1995, P.90)
agreed with Kaplan and Norton, stating their beliefs based on validated research that there is
a relationship between an increase in customer loyalty and long-term financial performance.
Kaplan and Norton (1992, p.71) stated that managers should monitor the organization from
different areas using different instruments at the same time rather than depending on one
instrument which may work against their objectives.
2.3 Balanced scorecard promise
Accordong to Cokins (2010, P25) the BSC will assist managers to establish unity
between organizations’ objectives and strategies which is known as translating the vision
phase. In order to follow the designed framework, the statements must have a clear set of
objectives and measures that are being discussed by all senior managers around the long-term
drivers of success. The second approach of the balance scorecard is to control the strategy
above and under organisation and individual objectives. Normally, divisions are assessed

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through their financial performances which are connected to short-term financial targets. The
BSC will help managers to ensure that all levels of the divisions are acknowledged including
the long-term master plan, managerial and individual purposes that are in line with it. The
third approach which is known as business planning enables organisations to merge their
work and financial plans. Most organisations today implement different strategic approaches
which tie up executive time, energy and resources and, as a result, managers will encounter
difficulties in assimilating to those strategic goals which lead to continual failure in
outcomes. However, when managers implement and follow the specific goals structured in
the BSC for assigning resources and setting priorities, they can engage and match only those
actions that best fit their long-term strategic goals. The fourth approach is known as strategic
learning. This approach involves analyzing feedback and assessing processes that concentrate
on whether the company, divisions and individuals have achieved their financial goals. The
BSC will operate as the centre management of the company where it can control short-term
results using three additional perspecctives. Furthermore, the scorecard empowers companies
to adjust strategies to reflect reality (ibid).
2.4. The cause and effectof the BSC’s four perspectives
Kaplan and Norton (1992,1996,2000,2002) ,explained that there is a cause and effect
relationship between the four perspectives. The subsequent chain assumes that the operations
of the organizational learning and growth are the operator of the internal and business process
activity. Therefore, the operations of the process are, in turn, the operators of the customer
perspective that are the operators of the financial measure activities. They also emphasize the
significance of mixed outcome measures (lag indicators) and performance drivers (lead
indicators) as a prerequisite for the success of the BSC. In contrast, Norreklit (2000, P.75)
argued that the cause and effect relationship demands a time lag between the cause and effect

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because it uses them at the same time without taking into account any time lag which
indicates it has no time dimension. In spite of this, the effect of the operational activity will
occur at different times because the effects of different activities involve different timescales.
The absence of a time lag hinders both the difference and the relationship between operations
and development.
Furthermore, Norreklit (ibid) also proved that there is an absence of any casual
relationship between the perspectives. Donaldson (1984, P, 1831) agreed with Norreklit by
showing that the link between the growth and debt equity ratio can be described as a more
interdependent relationship. Laitinen (2003, P.314) stated that the four perspectives along
with their interrelationship complexity is causing the measures in the functional framework to
appear to be more unsteady to each other. Therefore, it will not be possible to deliver
evidence for how the organisational internal factors must be developed. Furthermore,
Norreklit (2000, P.81) observed that the BSC was not the proper strategic management tool
that Kaplan and Norton alleged, seeing that there were obstacles in confirming organizational
and social environmental implanting.
2.5 Researchmethod and limitation of the BSC
According to Chang (2012), the BSC is researched in comparison with previous measuring
methods such as the Intellectual Capital method and the Enterprise Value method. It was
argued that the BSC model clarifies inadequate measures for past financial performance as
well as serving as a tool integrated with the company’s mission and vision. This gave the
BSC the lead in strategy measurement tools because it offers these two factors unlike the
other methods which offer inferior results with lower accuracies. Other alternative research
methods include the effects of the BSC on capital structure, on overall company performance
and its relation with intellectual capital.

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Thomas Housel (1994, p.5) argued that “the BSC needs an objective measure” because the
BSC model is not objective. He also believed that it doesn’t allow for the necessary
comparison to rate or measure performance. This makes financial and accounting analysis
impossible unless the model results in an objective measure of value, considering the
financial perspective part useless. This shows a limitation because the model lacks a specific
objective measure. Kulkarni et al (2008: 1166-1171) stated that the subjectivity of measures
in the BSC model will lead to ambiguity in the vision statement given by the organization.
Objective measures must be taken in the third step of the BSC model in order to address this
lack of clarity. Kulkarni (ibid) effectively makes the same point as Housel, confirming the
fact that the real limitation and the research gaps in the issue of the BSC model are due to the
absence of objectivity in measurements. Other limitations include confidential data from
companies. This forbids researchers from comparing the different effects of the BSC on the
different types of companies which use it. The tool is also far more complex than other tools,
making it a difficult tool to analyze.
2.6 Companies performance within BSC
The empirical literature and reports have shown the performance of companies that started to
implement the BSC in their strategic plans. Howie and Macht (2009, p123) stated that highly
recognized private and public industries from different countries around the globe have
implemented the BSC since the year 2000 and had announced that the BSC management
system was a significant key for achieving certain valuable targets
Based on an executive management tools and trends survey (2009), the reports have shown
that the BSC ranks among the top ten most used tools. Moreover, a recent study by Crabtree
and Debusk (2008, P.10) indicated empirical and quantifiable indicators showing the
significant role of the BSC in creating organisational value by analyzing the share price

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performance of more than 150 companies, both BSC users and nonusers, resembled by their
activity, size and other standards over the performance of the BSC users for three years post
espouse period. The results demonstrated that firms employing the BSC outperformed non-
user firms in three measures of performance: net assets, book to market ratio and market
value of equity. Moreover, Word (2009) focused on the effectiveness of the BSC when
technologies such as business intelligence and decision analytics contribute to the
performance of the BSC. This confirms that if business analytics can be aligned with those
applying the BSC, 57% will achieve breakthrough performance and this figure rises to 77%
when the BSC has been applied for three years or more. As such, an organisation will benefit
from a technological framework if it wishes to measure and maintain strategic performance.
The hall of fame report reflected the performance of numerous companies operating in
various activities that had implemented the BSC framework through their strategies. For
instance, Volkswagen (Palladium Group, 2010) showed a superior improvement in its
performance among different perspectives. They witnessed better employee engagement, an
increase in production and revenue volume and the number of repairs declined by 40%.
Megasalud, the Chilean healthcare network, (Palladium Group, 2010) experienced an
improvement in its performance after introducing the BSC where it succeeded in doubling
revenues, profit and return on equity, while decreasing the waiting time for clients in clinics
by half with fewer errors being made when calculating the fee paid to doctors. Another
example from the hall of fame is the first New Zealand-owned consumer bank, Kiwi Bank,
which experienced some difficulties such as rising costs and other issues which made it hard
to maintain growth. The BSC was able to deliver several successes for the institution from
different angles such as an increase in both the deposits and loan transactions of the bank,
more employee engagement in work activities, as well as improvement in Internet banking
usage (ibid).

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Ramos and Caudeli (2013, P.20) studied introducing the BSC in the Spanish Port System.
Within five years the port managed to employ the BSC in all of its departments. The BSC
contributed to an increase in regional competitiveness by means of better strategy and
operations actions within the port agency. The economic and customer indicators were higher
than the previous year because the effects of BSC implementation increase over time.
Kaplan, Norton and Rugelsjoen (2010, P.13) explained the experience of two
companies (Solvay Pharmaceuticals and Quintiles) where in 2006 they upgraded their
partnership from a preferred partnership to true alliance. The BSC helped to identify the role
of each partner in relation to specific objectives. Implementing the BSC involved a joint
steering committee to oversee the creation of the map, scorecard and identify the alliance
objectives such as: living the alliance, collaboration, speed and process innovation, growth
and value for both parties. The alliance reduced total cycle time for clinical studies by
approximately 40% by bringing new products to the market more quickly, reducing costs,
registering programmes in a timelier manner, keeping everyone focused on delivering the
alliance strategy. Finally, it is possible to infer that both companies implemented unified BSC
techniques to create alliance value that will contribute to their future success.
2.7 Implementation process ofthe BSC
Kaplan & Norton in 1996 developed the balanced scorecard (BSC) after studying various
other introductory management theories including the following:
 Management by objectives (Drucker, 1954)
 Principles of management (Fayol, 1916)
 Value disciplines (Treacy & Wiersema, 1995)

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 Theory Y (McGregor, 1960)
 Hierarchy of needs (Maslow, 1962)
 Open-book management (Case, 1995)
 Leading change (Kotter, 1996)
As mentioned previously, the BSC is a widely accepted tool measuring the performance of
management. It is used across many different organizations has yielded positive benefits in its
initial time. A BSC technique is very productive for an organization’s current management
environment and flexible towards any dynamic environment where there is any change in
social or technological factors within the organization.
It’s necessary to make an analysis for the BSC in order to establish how successful the
techniques will be if implemented. Treacy (1995) concept of value disciplines can be
identified on how to implement the BSC across an organization successfully. An organization
can adopt such scorecards or bring itself closer to that category. After successful
acknowledgment these tools can be used to develop best practice scorecards in line with
different types of organization strategies.
Many researchers and experts have advocated the BSC as a powerful management concept
for developed countries. Many surveys have been performed on the successful
implementation of the BSC in many European countries including the UK (Francis and
Minchington, 2000), Denmark, Finland, Sweden and Norway (Kald and Nilsson, 2000) as
well as the USA (Silk 1998). The implementation process of the BSC is not a rule of thumb
that has a fixed formula but is far more flexible and can be adopted in many ways, especially
in a dynamic environment. It was clearly endorsed by Kaplan and Norton; the BSC concept is
very flexible and can have a wide range of applications in various situations.

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Braam and Nijssen (2004, p.336) described the development stages of the BSC in 2004 and
stated that Kaplan and Norton in 1996 emphasized driving scorecard information and
business strategy towards congruency. In order to be successful and interpret these strategic
goals into the real objectives of the business in a more economical way they implied four
management processes: clarification and translation of vision and strategy; communication
and linking strategic objectives with measures; target setting and business plan; and
enhancing strategic feedback and learning.
To keep strategy as the focal point of the management process, Kaplan and Norton (2001)
extended the above work by presenting five principles. These are translation of strategy into
operational terms; organisation and strategy alignment; strategy as everyone’s everyday job;
strategy a continued process; and organizing change through leadership. Hoque and James
(2000) found that the use of the BSC brings related critical strategic measures onto a single
platform in such an arrangement that keeps the manager away from focusing and improving
one thing at the expense of another and makes cause-and-effect interactions clear. For an
organisation to achieve long-term goals and objectives this is considered a very good process
in management accounting to measure financial and non-financial performance for several
linked goals (Ittner et al., 2003).
Kaplan and Norton (1993, p.3) established that an organization’s mission, culture and use of
technology have a greater impact on the overall business. For that reason, Kaplan and Norton
agreed that organizations need to clarify their strategy on the basis of the competition they’re
facing and the nature of the environment in which they are operating because this will help
managers regarding what to implement when making a performance evaluation.
During his research on the implementation of the BSC, Mendes (2002, as quoted in Jordão
and Novas 2013, p.102) found that the BSC not only measures past performance but also

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plans for future measures. The BSC is widely used as a tool for performance measurement;
some researchers including Nakmura et al. (2005) have suggested that in an organization’s
strategic activities are clearly linked with functional activities like production, research and
development and human resources etc. They found that an effective system for measuring the
performance of an organization should be made of the different processes of an organization
Many companies implemented the BSC in their organization key strategy which helped
Kaplan and Norton (2001, p.92) to find that in an organization it’s not only important to
develop a strategy but also to implement it. For that reason Norton and Kaplan suggested five
key strategic principles that need to be included when implementing a strategy:
 Translate the strategy to operational terms
 Align the organization to the strategy
 Make strategy everyone’s everyday job
 Make strategy a continual process
 Mobilize change through executive leadership
From the above five principles it is possible to derive several other elements such as strategy
maps which mean that the overall strategy of the organization should be aligned with a value
proposition such as the maximization of overall shareholder value. It also includes elements
of personal objectives to be aligned with the strategy of the company along with other things
like incentives aligned with team goals. It means that during implementation the strategic
process should be aligned to the gross root of the organization; all employees of the
organization should have access to information and meetings in order to discuss performance
etc. It also takes into account the change management programme. The figure below shows
the useful BSC strategy map presented by Kaplan and Norton (2001):

25
Balanced Scorecard Strategy Map
BalancedScorecard StrategyMap (Kaplan&Norton,2001)
The four interrelated perspectives of the Kaplan & Norton BSC (financial, customer,
internal process and learning and growth) are designed to cover the function of the
organization, whether internal or external, in terms of the present and in the future.
Below is a figure taken from A Practitioner’s Guide to the Balanced Scorecard conducted by
CIMA:

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An organization’s strategy can be rendered into detailed objectives lying within each
of the above four areas identified. The breakdown of the above four main areas into
detailed objectives is necessary to align strategy with functional activities (Nakmura et
al., 2005) and to find appropriate quantitative measures to ascertain the success of
these objectives. The following table lists some examples that can be found in each of
the four perspectives. Below is a figure taken A Practitioner’s Guide to the Balanced
Scorecard conducted by CIMA:

27
The Financial Quadrants
Financial measures are as important as non-financial measures because they have their
own message to tell. According to Kaplan & Norton (1996), financial quadrants are
the focal point of the remaining three quadrants.

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The overall objective of the company is to maximize shareholder value. However,
according to Jensen (2002), the BSC is not concerned with shareholder value. Be that
as it may, Kaplan and Norton proposed that the BSC is a guide, not a straight coat and
that mangers are free to make choices. It means that an organization can use the BSC
in any way that is consistent with their strategy and makes allowance for both
measures: operational and shareholder value. It can also be derived from the above
discussion that the BSC can be very helpful for many organizations to provide a base
for appraising and linking financial measurements with strategy and to motivate
managers to accomplish this by making incentives related.
The Customer Quadrants
Customers are very important for most of the executives in order to improve the
performance of the organization. For that reason, organizations mostly focus on
customers’ needs, their satisfaction and adapting their business from customer
crossing point. Many organizations’ mission statements stress the need to attract
customers and if an organization wants to be profitable it needs to keep an eye on and
deal with their customers.
In this quadrant of the BSC, an organization can measure success in terms of how
happy their existing customers are with the company’s products and services by
measuring customer satisfaction through surveys and reviews.
To select the most appropriate objectives and measures for this quadrant of the BSC, it
is necessary to identify what is valued by the customers so as to meet their needs.
Michael Porter states in his book ‘Competitive Advantage: Creating and Sustaining

29
Superior Performance’:
‘An organisation’s competitive advantage grows fundamentally out of the value a
firm is able to create for its buyers that exceed the firm’s cost of creating it. Value is
what buyers are willing to pay’ (Porter, 1985).
Porter (1980; 1985) postulated that buyer value is created and passed on into goods
and services through an organisation’s value chain. The customer quadrant of the BSC
may be used as a tool to find the perception of customers, such as what they value
when receiving products and services.
The Internal Business Processes Quadrant
This quadrant essentially focuses on the non-financial measures of the organization
that could be quality of products and services, timeliness and output. This is usually
done by checking operational processes. Cost accounting is very helpful in this regard
for control and bringing improvements to processes. For many commercial businesses,
enhanced operational processes are very important but in terms of competitive
advantage it’s not sufficient because Porter (1996) stated:
‘The quest for productivity, quality and speed has spawned a remarkable number of
management tools and techniques: total quality management, benchmarking, time-
based competition, outsourcing, partnering, reengineering, and change management.
Although the operational improvements have often been dramatic, many companies
have been frustrated by their inability to translate those gains into sustainable
profitability… A company can outperform rivals only if it can establish a difference

30
that can be preserved’.
So in a BSC an organization needs to focus both on enhancing processes along with
those that will help them in achieving a competitive advantage.
The Learning and Growth Quadrant
This quadrant’s objective is to find an infrastructure for the organization that will help
it with future development and learning. This principally deals with people, processes,
culture, and information systems within organizations. Most business organizations
will measure this quadrant with investment in skill and training, individual
development and providing a system that delivers information efficiently. However, it
is very difficult to identify the main strategic measure in this area. Identification of
other soft issues such as team motivation, culture, creativity, and knowledge
management is ambiguous. Some examples of objectives and measures within the
learning and growth quadrant are given in the above table.
According to Kaplan and Norton, measuring this quadrant should include such things
as organization alignment, motivation, employee skills and the ability of information
systems.
In 1996, Kaplan and Norton stated that:
‘When it comes to specific measures concerning employee skills, strategic information
availability and organizational alignment, companies have devoted virtually no effort
to measuring either the outcomes or the drivers of these capabilities’ (1996a: 144).

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2.8 Summary
This section has provided significant insight into some of the companies that have already
implemented the BSC into their organisations. The empirical literature and sources used in
this section have demonstrated that the BSC was an essential key for the organisations to
develop their performance and unlock new potential that aligns with their strategic interests
such as improving profitability, increasing revenue, enhancing customer satisfaction,
improving efficiency and enabling technological advances.
Chapter 3: ResearchMethodology, ResearchMethods, and Data Collection
3.1. Introduction
The research methodology shows the approach that is to be applied and the basis used for this
study. This chapter shows how the data were gathered and also examines any ethical issues in
relation to the study along with any limitations associated with this study.
The aim of this report is to examine the implementation of the Balanced Scorecard in Saudi
Arabian companies in order to establish whether organisations across Saudi Arabia are using
the Balanced Scorecard as a tool for measuring performance. This study was designed to
clarify any reasons or limitations why they may not have been able to implement it.

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3.2. ResearchMethodology
This dissertation is of an interpretive nature, discovering the issues, and the best suitable
method to tackle this is to approach it using a qualitative research method. This research is
not going to evaluate numbers because it is not concerned with quantifying in relation to
Balanced Scorecard implementation. Also it is not seeking any numbers reflecting how many
organisations have implemented the Balanced Scorecard. Alternatively, it looks at the
implementation of the Balanced Scorecard as a tool of measure in organisations across Saudi
Arabia. It sets out to establish whether or not organisations in Saudi Arabia have
implemented the Balanced Scorecard.
According to Strauss and Corbin, qualitative research is defined as:
"Any kind of research that produces findings not arrived at by means of statistical procedures
or other means of quantification" (Strauss and Corbin, 1990, p. 17).
Further to the definition of qualitative research, Bryman describes the difference between
qualitative and quantitative research as follows:
Quantitative research can be illustrated as a study planning that pay attention to
quantification in the gathering and data analysis process, qualitative research can be
illustrated as a research strategy that usually emphasises words (Bryman, 2004, p.19).

33
Individuals express themselves and their insights of their world through words. Such a
method helps in examining and finding out the key information that is most appropriate for
this study. Furthermore, it is necessary to decide upon a research design and method.
Bryman (2004) offers insight about the research design and emphasised the following key
elements:
A research design is all about the framework for the research, which guides you about the
how to collect and analyse the data. An option regarding how to design the research shows
the different priorities being assigned to a wide range of available research process
dimensions.
On the other hand, a research method is simply the approach that is to be used for the
collection of data such as through questionnaires, interviews or observations. Observations
involve the researcher listening to and watching others (Bryman, 2004, p.27).
3.3. ResearchMethods
The research method chosen to collect data for this study is a questionnaire and semi-
structured telephone interviews. Some of the differences between semi-structured and
unstructured interviews are outlined below:
- “In unstructured interview the researcher uses an assistance records that gives a
concise detail that tend to deal with a certain range of topics. There may be just a
single question that the interviewer asks and the interviewee is then allowed to
respond freely, with the interviewer simply responding to points that seem worthy of

34
being followed up. Unstructured interviewing tends to be very similar in character to
a conversation.
- A semi-structured interview. The researcher has a list of questions or fairly specific
topics to be covered, often referred to as an interview guide, but the interviewee has a
great deal of leeway in how to reply. Questions may not follow on exactly in the way
outlined on the schedule. Questions that are not included in the guide may be asked as
they pick up on things said by interviewers. But, by and large, all of the questions will
be asked and a similar wording will be used from interviewee to interviewee.
- In both cases, the interview process is flexible. Also, the emphasis is on how the
interviewee frames and understands issues and events - that is, what the interviewee
views as important in explaining and understanding events, patterns and forms of
behaviour” (Fds.oup.com p.314).
The aim of this research is to understand the implementation process of the Balanced
Scorecard in organisations across Saudi Arabia. It was deemed by the researcher that the
most appropriate method for the collection of data will be through questionnaires but the
problem is that only conducting questionnaires would not help the participant to express their
own personal experiences. For that reason the research uses some of the base questions that
were put to all participants as the basis for additional semi-structured interviews as a lever to
allow participants to expand upon their stance by expressing their views.

35
3.4. ResearchDesign
A number of different models were studied before deciding upon the research design for this
dissertation, such as comparative design, cross-sectional design and case study design.
Comparative and cross-sectional design were both rejected for this study because they do not
offer a standardised approach to be used for assessing the key research questions for this
dissertation. Therefore, it was decided that the best approach was to carry out a multiple case
study.
Blaxter et al. (2003) described a case study as:
“In many ways, ideally suited to the needs and resources of the small scale researcher”
(Blaxter et al., 2003, p.71).
It was further described by Yin (1994) that there are three types of case study and that the
most appropriate out of these three would be the critical case. This is important because it
will decide on the basis of a hypothesis whether Saudi Arabian organisations have embraced
the Balanced Scorecard across their operations.
3.5. Data Sources and data Collection
Data were chiefly collected by sending questionnaires to selected companies across Saudi
Arabia. An explanatory email was sent to them, inviting them to take part in the study and
also let them know about the researcher and the aims of the study.

36
In addition, telephone interviews were arranged with the owners and top-level managers of
the companies. At the start of each interview, the researcher introduced himself and then
asked a few question about the research in order to understand their perspective.
However, Questionnaire was not answered effectively as demanded. The reason behind the
semi failure of the questionnaire is that the companies being surveyed are not aware of the
balanced scorecard. The majority of the companies were telephone interviewed to discuss
some of the questions of the questionnaire to get more validated data to implement in the
study.
Chapter 4: Discussion and Analysis
This chapter presents the case studies for the companies participating in this paper and the
vital observations that have been made to present the empirical evidence gathered for this
research along with other expressive sections of the data. To analyse and explain the
empirical facts, these data are presented and rationalized with as much accuracy as possible.
First of all, a number of companies are described along with the market in which they operate
in order to better appreciate the framework and connotation of the findings. Secondly, in
order to better understand how strategy is managed across these organisations,
implementation processes and strategy communication are studied for a boarder picture about
these companies. The next step is to examine the Balanced Scorecard along with its measure
and framework across these companies. Finally, a conclusion is derived on the participation
of these companies in implementing the Balanced Scorecard and how it is affecting these
organisations.

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4.1. Jude Water Case Study:
Jude Water distillates and distributes bottled water and was established in 1990. Today it is
recognised as producing the best quality bottled water across Saudi Arabia. The company is
constantly improving to meet the demands of customers by looking at their different
requirements. Bottled water is considered to be a healthier package for the growing market
that faces health challenges, especially in Saudi Arabia where water quality is a problem.
4.1.2. Jude Water analysis:
The Jude Water factory is very cautious about its customers and provides them with quality
products with low calories and perfect taste. Therefore, it continuously researches in order to
fully comprehend the vital role of water and hydration for consumers’ health. The stated
objectives of Jude Water are as follows:
 Maximise profit
 Delivering high quality bottled water
 Conduct research to provide quality services, keeping in mind the consumers’ health
and hydration requirements
Jude Water is a private company and its operations are relatively modest in size. Most of the
decisions taken at Jude are made at the apex level and are decided by either top
management or the owner himself. There is no formal implementation of the Balanced
Scorecard at this company. In fact, one of the answers to the questionnaire by the managing
director of the company was:
“We don’t have any set of rules to measure non-financial indicators for the company’s
growth.”
The reason for this is because of the culture in Saudi Arabia where the head of the
department is responsible for everything, as is the case in most private companies like a
sole trader and they don’t have the required resources to implement this. Therefore, a

38
telephone conversation was followed up to find out much more about the company’s
performance measuring tools, the managing director said:
“As Jude’s overriding manager, my objective is to maximize my company’s profit. As such,
we don’t have performance measuring tools but we are looking at maximization of sales and
cutting our expenses and providing quality services to customers.”
This express that the company strategy is to generate revenue as their priority mission
leaving behind other perspectives such as customer and other perspective that will have a
positive influence for their performance in the long run.
4.2.1. Introduction HAYAT BUILDING MATERIAL COMPANY AND UNITECH
The Al-Hayat Building Material Company is part of IKK group which was established in Saudi
Arabia in the 1960s to provide services to the construction industry and meet clients’
demands. Al-Hayat was later founded in 1983. Today, Al-Hayat is one of Saudi Arabia’s
largest merchants of basic sanitary items such as chrome bathroom fixtures, electric water
heaters cast iron manhole covers, brass valves, flexible hoses etc. It is well known as a
major market leader with more than 21 branches and outlets providing services to thousands
of contractors and traders. Al Hayat is the representative and distributor of major
international manufacturers such as Grohe, Ariston, Kludi, Ottone Meloda, Savil, Fiore,
Mamoli, Duravit, Sangra, Hebei, and Hitachi among others.
The goals of the group are to serve its clients according to their needs, to seek out new
business opportunities and diversify into various industries to fulfil clients’ needs under one
roof.
Unitech is part of IKK; it secured second position in terms of revenue within the group and
continues to dominate a larger geographical presence in comparison to other companies in
the group.

39
Following the construction boom, Unitech has enjoyed several years of successful strategic
growth through its diversified range of products and its geographical expansion that covers
the major parts of the GCC and MENA region stretching into the heart of Europe. This
expansion had allowed Unitech to record revenues of US$190 million in 2010 with 1259
employees in total.
Unitech today has an extensive presence across 70 locations in 40 cities distributed across
14 countries. Their operations incorporate 36 sales offices and showrooms, 5 factories, 22
warehouses and 7 outlets.
4.2.2 Analysis of the group:
The group aims to strengthen its global market position, continuing to enhance its product
portfolio across its business segments and capitalize on regional expansion opportunities.
Particular focus is being placed on:
- Product quality
- Service network
- Brand awareness
- Focused production structure and efficient logistics flow
According to Mr. Talal Hajjar, Deputy General Manager at Al Hayat Building Material, the
overall focus of the group is on quality and there is no compromise on quality and we believe
in consultation, production and delivering on time, caring for customers and after market
service.
The group is continuously researching implementing automated tasks and upgrading
procedures. They believe in client satisfaction and are committed to offering competitive
products and services. Mr. Hajjar added up: “Our organisation is quite diversified in terms of
functions and it is geographically spread out. What I like about our business is our collective
ability to correct mistakes and upgrade performance.”

40
Mr. Hajjar emphasised in his interview said that employees are their key assets and was
quoted as saying:
“….Twice a year we make a list of employment history and those who have served the
company over a period of time are recognized. We have staff members who have been
working at Unitech since 1983 and quite others who have been with the company more than
20 years. This shows the importance that Unitech gives to its colleagues; members of its big
family….”
4.2.3. Implementation of the BSC at IKK group
With a strong commitment and passion for customer care, satisfaction and delivering quality
products on time, the group has applied BSC since 2007. Initially there were no experienced
staffs available within the group to implement the Balanced Scorecard so in the very early
stages an American company was outsourced for this purpose due to its widespread
experience in the relevant field. The outsourced company initially started working on
collecting information about previous performance measurement with IKK by conducting
meetings with seniors managers, followed by mid-level managers and at last with lower level
managers.  After this long process, the results were submitted to senior-level management
and responsibility for the BSC was given to the quality control department which is
responsible for customer care; the quality of products; employees; finance; and the
education and research perspective.
4.3.1 Omix Introduction:
Omix is an engineering construction company also known as Abdul Aziz Bin Omran Al
Omran & Partners Company based in Riyadh Saudi Arabia. Its vision is to become one of the
largest integrated construction companies and to contribute effectively to the state economy.
Its primary objective is to offer a high level of customer service and be distinguished in

41
developing and training national manpower and stability at a high level of quality in concern
of social values and high work ethics.
4.3.2. Omix Analysis:
Omix construction has similar objectives to other companies, providing quality services and
goods, and customer care but in addition they are particularly focussed on national policies
offering the following:
- Supporting Saudi gross domestic product
- Training and development of national competencies
- Supporting national industry
It is important to understand Omix’s strategies in order to know much more about how they
would cope with implementing the Balanced Scorecard. Some of the strategies are as follows:
- Support national industry
- Improve work ethics
- Ensure environmental protection
- Quality policy
- Safety of workers
4.3.3. Implementation of the BSC at Omix:
Omix were not able to answer the questionnaire. It was found that the corporation is
knowledgeable about the Balanced Scorecard as a performance measurement but it was found
that the system is not implemented across the organisation, which measures non-financial
indicators.

42
To find out more in a telephone conversation, one of the senior managers was asked: “What
is it that increases your sales?” He answered: “Great service. It’s what the customer
demands!” This can be taken as a customer perspective or objective. It was also asked how
Omix delivers great service? Omix must research different customer needs and should deliver
within an agreed timeframe, which reflects the characteristics of then internal process
perspective in the BSC.
A further question asked was “how do employees learn the processes for different clients’
needs to meet deadlines?” He answered: “By providing proper training and continuous
professional development.” This is known as the Learning & Growth Perspective in the
Balanced Scorecard.
All of the mechanisms described above support the ultimate goals and mission of Omix. In
light of the above discussion, the senior manager can find out how Omix business is running
and where it needs improvement. It can also be found out what employees need to
understand and what they need to do to help them achieve the overall goal.
Omix has the full balanced picture of what matters, whether its what matters most to OMIX,
what matters most to customers or what matters most internally to achieve the overall
mission. However, as a private company with limited resources there is no proper
mechanism for implementation of the Balanced Scorecard to measure non-financial
indicators.
4.4.1. Introduction Al Yaseen Agri:
Al Yaseen Agri operates in the agricultural sector providing a wide range of products and
services across Saudi Arabia. It was founded in 1980 in Ahsa as a single branch mainly
focusing on vegetable growers and opened its second branch in 2000 in Dammam and started
providing services in gardening and public health services. In 2009 it experienced rapid

43
growth, opening 11 branches across Saudi Arabia and expanding its operations from the
machinery division to the integrated pest management division.
4.4.2. Analysis of Al Yaseen Agri:
Al Yaseen Agri’s vision is to achieve leadership and excellence in the Saudi agricultural
market and to provide efficient and cost effective services to its customers.
The goals of Al Yaseen Agri are given as follows:
- Continuous quest for excellence in performance
- Transfer ideal technologies to the Saudi agricultural market
- Attain adequate financial returns to ourselves and to our customers
4.4.3. Implementation of the BSC at Al Yaseen Agri
Al Yaseen Agri is a private company and has grown in recent years, and is still in the process
of expanding its business across Saudi Arabia, and is looking for opportunities in other
countries. They are currently providing services to Saudi vegetable growers and the farming
community. This includes supplying a range of vegetable seeds, specialty fertilizers,
agrochemicals and an assortment of other agricultural inputs.
The company claims to have secured a prominent position across the market. It also claims to
have a wide spectrum of customers ranging from individual vegetable growers to large Saudi
agricultural companies. However, they have no processes for non-financial performance
measurement. As the Financial and Administrative Manager of the company, Mr. Sameh
Fouad replied to one of the questions:

44
“Although we care about customer services and the quality of products, we don’t have clear
Balanced Scorecard processes implemented to measure them but to some extent we take steps
to research and know about the markets and take measure in those areas.”
Al Yaseen Agri claims to be a marketing company and they state that their marketing strategy
is as follows:
“We are basically a marketing company. We make meticulous efforts to study and segment
our market needs in order to be able to provide efficient and cost-effective solutions to satisfy
our customers' requirements and supply outstanding, competitively priced and innovative
agricultural technologies. We screen the world market seeking agricultural technologies
suitable for Saudi farming. We do a thorough field assessment in our "Trial Station" to
ascertain their technical and economical viabilities before we put our marketing force behind
them. In so doing, we obtain a fair market share for our suppliers and seek to financially
reward both our customers and our suppliers.”
It can be derived that Al Yaseen Agri has not implemented the Balanced Scorecard but from
their marketing strategy it seems that they are using this up to a moderate level to provide
quality services and thus being rewarded.
4.5.1. Introduction Jarir Book Store:
Jarir was founded in 1979 in Riyadh and was later changed into a joint stock company that
become listed on the Saudi capital market in 2003. The paid up capital of Jarir is SR900
Million. The main operation of the company across KSA and other GCC countries are as a
retailer and wholesaler. One of the divisions is Jarir Bookstore which has 31 outlets in 14
cities across Saudi Arabia and another 5 outlets in GCC countries. In addition, Jarir has a
wholesale division with 4 stores and 6 direct sales offices.

45
4.5.2. Jarir Analysis:
Jarir’s activities includes office and school supplies, selling toys and educational aids,
different types of books and publications, arts and craft materials, computer peripherals and
software, mobile phones and accessories, audio visual instruments, photography tools, and
maintenance of computers and electronic items. Jarir operates through two divisions under
the trademark of Jarir Bookstore.
- To maintain leadership in the quality of service to our customers
- To provide products of superior quality at the best price to our customers
- To be the market leader in office supplies, I.T. products and books
- To respect individual initiative and provide opportunities for personal growth to our
employees
- To build a strong management team with effective leadership skills
- To serve and give back to the community because we believe it is our social
responsibility
- To achieve profit and growth in order to make all of the other values and objectives
possible
- Ensure the health and safety of its employees
4.5.3. Implementation of BSC at Jarir Book Store
Jarir uses the Balanced Scorecard as a performance measurement tool. The company values
its customers and provides quality services and products. It respects its employees and backs

46
them to build effective leadership skills. Esam El Hassan, Marketing director of the company,
said about its employees:
“Our employees are our key assets and they are the engineers who build our dreams into
realities.”
Esam also mentioned in his conversation that:
“The company is maintaining a very high standard of health safety. Management of the
company includes a team of professional safety advisers who monitor key safety performance
indicators. Performance and recommendations are presented to the board. A key
performance indicator for health and safety is calculated by comparing the number of
injuries with previous years. Actions are always taken to reduce it.”
“The company sets targets in terms of customer satisfaction, quality assurance, learning and
development and other key areas and then employees are pushed to achieve those and this is
regularly monitored and then performance is measured at the end of the financial year.”
4.6.1. Introduction United Cooperative Assurance
United cooperative
United Cooperative Assurance is mutual insurance cooperation and is registered on Tadawul in 2008
with a total capital of SAR 300,000,000. The company has distinguished itself from its competitors by
providing the Saudi markets with the best opportunities in serving its required insurance demand for
all types of companies and project. The services that the company provide range from casualty and
incident events, corporate medical, marine cargo and hull, flight incident as well as energy insurance.
The company headquarters is located in Riyad and their operations extend throughout the kingdom
with more than 115 points of sale. Its strategic focus on selected categories has contributed to

47
rapid growth, market acceptance and the overall success of the company. The prosperity of
United Cooperative Assurance is linked with good business decisions and business practices.
The achievement of this company have enabled them the opportunity to extend their
operations in the near future in other countries such as Qatar, Kuwait and Dubai.
4.6.2 United Cooperative Assurance Analysis
- To be a centre of excellence in providing the best offers to the customer by top
quality, safe and successful products to meet customer needs
- To give the highest priority to their customers and the environment
- To manage growth based on the principles of sustainable development
- The company will encourage a motivating mission climate recognized by an
organizational culture that focus attention on performance, team work, learning and
development
- Employees and stakeholders will share the rewards of sustained profitable growth
4.6.3. Implementation of BSC at United Cooperative Assurance
The group is has extensive experience in implementing the Balanced Scorecard to measure
non-financial performance across its activities. Some of the index that is weighted across the
company was stated by one of the sales managers, Mr. Yasser Al Rifae, throughout his
answers to the questionnaire
The company is focusing on the quality perspective for how to increase servicing capacity,
where they believe in achieving goals by expanding projects and providing essential facilities
for planning and customer outturn.
The second issue the company takes into consideration is the employee perspective by
improving and developing its staff members, they are looking for competent employees to

48
retain. Therefore, the main objectives is to provide a friendly environment to their employees
and to continuously develop them professionally with their skills.
“Apart from that, we have an education and research perspective where we are looking to
improve our systems to assure quality. We research for the use of advance information
technology for our services. We also have financial measures like general revenues,
budgets andEPS.
4.7.1 Introduction Bahri Company:
The National Shipping Company of Saudi Arabia, widely known as Bahri, was founded in
1978 through a Royal Decree. It was formed as a public company from the very beginning
with 58% of the shares being held by Saudi nationals, 22% by the Saudi Government Public
Investment Fund, and the remaining 20% by Saudi Aramco Development Company.
Bahri initially was a very small multipurpose shipping company but has grown rapidly and is
now one of the biggest shipping conglomerates in the world. Bahri also owns a subsidiary
known as the National Chemical Carrier, which has a fleet of 24 chemical carriers. This
subsidiary was founded in partnership with SABIC and is now one of the largest
companies of its type in the world. Bahri has diversified rapidly since its formation and now
the company's services include transportation of crude oil, general cargo, chemicals, LPG and
other dry bulk.
4.7.2 Bahri Company Analysis:
Bahri’s vision is “linking economies, sharing prosperity and driving excellence in global
logistics services.”

49
Bahri’s mission is to focus on values and responsible business fundamentals, and it wants to
be a leading service provider for running a world class fleet through best practice. Their
mission also includes building mutually beneficial relationships with all stakeholders.
4.7.3. Implementation of BSC at Bahri Company:
We were unable to have any connection with the Bahri Company, instead we had analysed
their annual report to get valuable information about whether they are implementing the BSC
or not.
Bahri is a public limited company and it has provided some values and guidelines for
operations in order to provide best service. The values of Bahri are:
- Driven
- Relentless
- Transparent
- Considered
Meanwhile, the guidelines for the operations of the company are as follows:
- Effective customer care set-up
- Reliable service and excellent safety record
- Maintain customer confidence
- E-service to keep track of cargo
Along with all these, Bahri’s management are considered:
- Dynamic, qualified, experienced, focused and determined
- Having operational expertise across all business segments

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- Pursuing expansion of new business opportunities with a synergy
- Adhering to organizational strategic initiatives
In addition to financial measures, Bahri also measures non-financial performance. There is no
clear evidence of whether the Balanced Scorecard is implemented in Bahri but from annual
reports they have used some non-financial indicators which can be used across the company
along with other things for measuring the non-financial performance of the company. The
figure below presents some of the non-financial indicators used for a number of operations
performed during 2012/2013.

51
Apart from these, Bahri is focusing on quality and introduced a strategy for quality
management systems in 2013 that has achieved some of the following targets:
- Automation of 25% of quality records in Enterprise Resource Planning (ERP)
- Re-engineering quality policy
- Development of SMART key performance indicators for the current processes
- Development of new process documents for some departments
80HR continuously advises as to any changes required. Employee training and development
is considered particularly necessary and aims to assist them in the achievement of
organizational objectives. For this reason, a framework for training and development has
been introduced to enhance the current and future needs of employees (Annual Report, 2013).

52
Bahri also takes measures for health and safety and other social responsibilities. However,
there is no indication of proper procedures for measuring the performance of the company
through a Balanced Scorecard or where Bahri may have identified any non-financial
indicators that could be used for that purpose. In contrast, the company is focusing more on
financial performance through its finance division, which actively participates in strategic
plans and decisions.
Chapter 5: Analysis of Evidence fromthe case Studies
5.1 Introduction
In Saudi Arabia there is a system of family and tribe which has a great effect on the actions
of individuals working in an organisation. The reason behind this is that Arab culture
principles are to show respect and obedience to elders or those who are top in the hierarchy
of a family or organisation (Hofstede, 1984). Such culture greatly influences the behaviour
and interpersonal interactions of individuals and organisations as a whole. Hence, Arab
society works in a legitimate environment but one with unequal distribution of power, roles
and resources where they concentrate on obeying role obligations (Hofstede, 1984). This
can be further portrayed into more traditional assertiveness, where the role of genders is
decided by the religion of Islam which is widely practiced across the Arab region. By
studying Islamic law it can be derived that Islam highlights consultation, discussion,
collaboration and social relations at work. However, in contrast to Islamic law, KSA society
has a system of kinship, tribe and joint family systems that affect individual behaviour in
hierarchy, which decides obedience and authority. Hence, in such an environment managers
supervise in an autocratic manner while juniors anticipate commands (Hofstede, 1984).
In KSA this contradictory effect can damage many things across an organisation. Learning
opportunities will be particularly affected because of the focus on historical practices which

53
do not consider an individual’s empowerment as a tool for sharing new ideas and its
implementation effectively. According to Hofstede (1984), in KSA the system of an
organisation is highly centralized and controlled through bureaucracy. Therefore, Arab
culture can be characterized as a principle of high uncertainty avoidance that means that
managers will avoid certain situations or will be unwilling to become involved in a scenario
where the results are unclear and where it involves high risk.
5.2. Analysis of Data
After analysing each company by the method it uses for developing it strategies and
expanding it activities. It has been shown that most of the companies are not aware of the
BSC framework and managers try to obtain their targets through their own beliefs and do
what best for their business interest in terms of profit.
The unequal distribution of power in an organisation that is acceptable to an individual to an
extent is represented by the term “power distance.” It shows the tendency of how far
someone is willing to accept unfettered power. Hofstede’s (1984) results showed that
organisations in Arab countries exhibit high power distance. High power distance countries
and organisations are centralized with a strong separation between managers and
employees and little vertical mobility. This can be seen through their multi-hierarchical levels.
The structure of an organisation is central to its success in many ways, especially when
there is a transfer of knowledge and tendency to learn among individuals and groups across
the organisation. Therefore, managers in an organisation with high power distance will show
greater influence over their subordinates who, in turn, will not be able to work independently
and will act as sub-missives. Hofstede’s (1984) analysis is in support of the view that the
culture of KSA encourages organizations that are highly centralized, strictly hierarchical and
fully bureaucratic.

54
In such organisations and cultures, it becomes difficult to look for continued growth
opportunities and to implement new things through the needs of innovation and learning and
they lack generosity, which is an essential element required in developing the Balanced
Scorecard.
Chapter 6: Conclusions and Recommendations
In developed countries, the Balanced Scorecard has been widely implemented and is used
effectively not only in profit-driven organisations but also in non-profit organisations.
However, in many developing countries or where business techniques are now developing,
there is very little knowledge or use of the Balanced Scorecard.
This study has discussed the implementation of the Balanced Scorecard approach in
organisations across Saudi Arabia. A case study approached has been used where the author
studied a number of organisations in order to establish whether they have implemented the
Balanced Scorecard or in which stage they are in their implementation of the process.
Most of the companies are equally focussed on the necessity of their primary mission for
maximizing profit, to have financial stability along with the necessity to provide customers
with quality products and services. The emphasis on both of these perspectives has become
an obligation for these organisations to efficiently and effectively serve their customers.
During the study it was found that many of the case study companies are private companies
and they have very little knowledge of the Balanced Scorecard. Despite this, these companies
are aware that success results from not only focussing on financial measures but also non-
financial measures such as improving services, quality and employee training etc. However,

55
most of the companies have no procedures in place to identify non-financial indicators where
they can measure the non-financial performance of the company.
The use of the Balanced Scorecard is considered very new across Saudi Arabia and only very
few organisations are aware of its importance. This has made it difficult for most of the
companies to develop procedures and properly implement the Balanced Scorecard across
their organisation.
Dr Robert Kaplan, researcher of the Balanced Scorecard who first introduced this concept,
visited Saudi Arabia to attend seminars where he delivered lectures to various organisation
managers and owners on the importance of the Balanced Scorecard. The purpose of this was
to:
- Learn about the KPI naming standards that ensure quality assurance for the selection
process
- Practice KPI selection techniques (Value Flow Analysis, KPI balancing)
- Review KPI selection good and poor practice
- Identify essential KPIs by industry and functional area
This was also for the purpose of developing a thorough understanding of the principles and
good practices of strategy mapping, and how to find out the stream process which needs to be
afforded greater focus.
Many challenges lie ahead for organisations across KSA that need to develop outcome
measures for their individual departments and link these with strategic objectives. This will
prove to be a very difficult process to implement because there is a lack of knowledge and
expertise to implement it efficiently and effectively.

56
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Appendix 1:
The objectives of the balanced scorecard is connect activity plan to operation by organising
operating objectives based on the company’s strategic direction, and measuring actual
performance versus these objectives.
Examining the traditional financial measures of performance, and the non financial measures
(customer perspective, the internal business process perspective and learning and growth
perspective) are also examined.
Please answer the following questions carefully. All contributors will be given a print of the
research outcome.
Thank you for your contribution and combined effort. Your collaboration in this research is
totally elective. There are no prospective fears related with this study. Nevertheless, if you
experience inconvenient answering any questions, you can stop answering the survey at any
point. It is very important for us to learn your opinions.
Your information will be coded and will remain confidential. If you have questions at any
time about the survey or the procedures, you may contact Fouad Basrawi by email
fouad.basrawi@gmail.com
Balanced Scorecard Survey(2010)
Question1: Name of personcompletingthe survey:
-----------------------------------------------------------------------------------------------------------------------
Question2: Job title of personcompletingthe survey:
-----------------------------------------------------------------------------------------------------------------------
Question3: Numberof employees/Divisions:
-----------------------------------------------------------------------------------------------------------------------
Question4:Doesyour companycurrentlyusinga BSC?

60
If no please goto question5
-----------------------------------------------------------------------------------------------------------------------
Question4a: whenhave youplannedto espousethe BSC?
-----------------------------------------------------------------------------------------------------------------------
Question4B: Didthe adoptionof the BalancedScorecardaccompaniedbya change inCorporate
strategyor strategicDirection
--------------------------------------------------------------------------------------------------------------------
Question4C: When didyoufirstuse a BSC?
Question5: For Howmany yearsdidyouuse the BSC?
-----------------------------------------------------------------------------------------------------------------------
Question5a: What wasthe yeardiscontinued?
-----------------------------------------------------------------------------------------------------------------------
Question5b: In case of discontinuedscenario,please mentionwhy?
-----------------------------------------------------------------------------------------------------------------------
Whichperspectivesare usedinyourcompany?
A) Financial perspectives
B) Customerperspectives
C) Internal Business processperspectives
D) Learningandgrowth perspective
E) All perspectives
How manymeasuresare usedinthroughthe perspective youimplemented?
-----------------------------------------------------------------------------------------------------------------------
Didyou use otherperspectives?If yes,mentionhow manymeasure youincl

61
Question 8 - Considering your company's experience, please use the following scale to
indicate your level of agreement with each of the identified issues associated with the
implementation of a Balanced Scorecard
Strongly
Disagree
Disagree Undecided Agree Strongly
Agree
Improved Market
Position
Improved
Communication
of Strategy
Improved
Achievment of
strategic goals
Improved
financial
performance
Improved
Efficiency in
operation
Balanced
Scorecard
Measures of
Performance are
Directly Linked
to Strategy

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