The Impact of Applying Balanced Scorecards on Increasing the Operational Efficiency of Activities in Manufacturing Companies

Abstract

The study aimed to measure the impact of applying six dimentions of balanced-scorecards (BSCs) on two elements representing the operarional efficiency of activities in Syrian manufacturing companies. The independent variable was measured through dimentions of BSCs, namely, financial perspective, internal business perspective, cumtomer perspective, learning and growth perspective, social perspective, and the risk perspective, and thus divided into two groups: financial and nonfinancial dimentions of of two types of banac-score cards – the company’s BSC and the individual's BSC. The dependent variable, namely, the operational efficiency (OE) was measured by two elements: operational cost reduction and informal reports of two Syrian manufacturing companies located in the City of Damascus. The study adopted a descriptive and analytical approach and a questionnaire form was designed and distributed to participants of planning managers, cost accountants, financial managers, production managers, marketing managers, internal auditors, and general managers, who are working in these companies. The researcher used a descriptive and inferential statistical analysis to measure the impact of the independent and dependent variables of the study.

The study results showed the following:

1.based on the descriptive statistical analysis participants perceived the application of BSCs as between moderate to high levels (average results were between 2.33-5) with the conclusion that employees and managers perceived the importance of BSCs to translate the company's strategy and achieve predetermined objectives, dspit difficulties associated with the application of BSCs in manufacturing companies.

2. based upon inferiential statistical results (HO-1) there was a significant impact of applying BScs on increasing operational efficiency in manufacturing companies in Syria. The conclusion is characterized by the need to apply BScs to get their benefits not only in applying the integrated six dimensions but also to support control and auditing systems in manufactruing companies.

3. the regression results also showed (HO-1-1-) that there was a significant impact of applying BScs on operational cost reduction in manufacturing companies in Syria. The conclusion is that the efficiency and effectiveness are important elements in companies and can be impoved by the application of the BSCs for the company and for its individuals.

4. the regression results showed (HO-1-2) that there was no significant impact of applying BScs on informal operational reports in manufacturing companies in Syria. The conclusion is that informal reports and practices were perceived differently by the middle and top management and smart managers dealt with informal practices for the benefits of formal practice and therefore expanding the database of formal procedures within the BSCs.

5. results showed that there were differences (HO-2) of the impact of applying BSCs on increasing operational efficiency in manufacturing companies in Syria attributed to the academic and professional experience factor. The conclusion is characterized in focusing on intensive employees traing programs and operational experience as a need to the application of the BSCs in manufacturing companies.

In line with these findings, the researcher recommended the following:

1. more studies are needed on the application of the conpany's BSC and the individual's BSC on other different manufacturing and service companies with impacts on profitabiltiy, cash flows, and liquidity using different research methods: such as questionnaire forms and the content analysis.

2. adopting reqular and continual training programs for different managerial levels in manufacturing companies to understand the application of the BSCs  in thses companies.

3. the need to discover new cases to identify areas of cost reduction for manufacturing companies to enhance performance effectiveness and efficiency of activities based on the aaplication of BScs, as done in this search.

Keywords: Balanced Scorecards, Operational Efficiency, Syrian Manufacturing Companies.