The case study selected for review is that of Cattaraugus County Rehabilitation Center (CCRC) that is a nonprofit organization that has implemented the Balanced Scorecard for effective strategic planning and management of its operations. The analysis presented in this report argues that Cattaraugus County Rehabilitation Center used an effective approach for integrating the balanced scorecard in its strategic planning.
The balanced scorecard is a key strategic tool that could be used for identifying, evaluating, and measuring factors based on four different perspectives to improve the organization’s performance (Savkin, 2016). The use of a balanced scorecard by nonprofit organizations can assist the management to align their objectives related to their financial, customer, internal business processes, and learning and growth perspectives with their mission (Kaplan & Norton, 2015). It could be argued that nonprofit organizations are different from profit organizations as they are not driven by the profit-making motive. Also, their customers are termed differently as recipients and contributors (Savkin, 2016). However, the balanced scorecard could be used by nonprofit organizations in the same way as profit organizations by setting their performance objectives, targets, and measures to achieve strategic effectiveness (Niven, 2008).
Cattaraugus County Rehabilitation Center implemented the balanced scorecard approach, improving its ability to achieve strategic objectives with financial perspectives. Cattaraugus County Rehabilitation Center is a nonprofit organization that has its operations in different constituencies. It provides health recovery services to individuals with physical and mental disabilities (Martello, Watson, & Fischer, 2008).
Cattaraugus County Rehabilitation Center’s management had not been successful in aligning its objectives across its different functions before the implementation of a balanced scored approach by the organization. In particular, the organization was unable to manage its day-to-day activities effectively according to its strategic objectives (Martello, Watson, & Fischer, 2008). It is important for an organization to include all participants / stakeholders in the implementation process. The reason is that all stakeholders’ perspectives are crucial to the strategic success of the organization (Kaplan & Norton, 2015). In the case of Cattaraugus County Rehabilitation Center, it was important for the management to consider the views of customers, who are residents of different communities and are receiving care and treatment from the organization as they expect high service quality (Martello, Watson, & Fischer, 2008).
The organization was successful in getting customers, staff, and other stakeholders involved in the implementation process. It permitted the organization to develop the project focus shared by all stakeholders who were involved in its different functions. The outcome of this approach was the organization-wide acceptance of the balanced scorecard approach adopted by Cattaraugus County Rehabilitation Center. The alignment of different functions with the overall strategy of the organization made the implementation of a balanced scorecard approach a success (Martello, Watson, & Fischer, 2008). The success of Cattaraugus County Rehabilitation Center is further analyzed by considering the four perspectives of performance include in the balanced scorecard (Kaplan & Norton, 2015).
The organization set out the objective related to achieving financial stability. It did so by carefully reviewing the existing financial management practices and policies. It is a crucial part of strategic planning as the organization needs to identify new sources of additional funding and also improve its existing relationships with the donors or funds providers. The organization can add value to its current operations by utilizing the acquired funds efficiently. Moreover, Cattaraugus County Rehabilitation Center allowed its department managers to utilize reserves at their discretion. The empowerment of employees is important for the success of change i.e. the implementation of a balanced scorecard approach to the strategic planning of the organization (Kaplan & Norton, 2015).
Although it was not easy to develop customer goals due to the nature of services provided by Cattaraugus County Rehabilitation Center and the diverse needs of customers, the organization managed to establish numerous customer goals. These goals were related to public relations, availability of staff, service quality, and capacity (Martello, Watson, & Fischer, 2008). The organization implemented an information system that generated timely information to improve its responsiveness and address customer service issues. It is also important that the organization complies with all regulatory requirements in the new system (Asefeso, 2013). Cattaraugus County Rehabilitation Center was successful to improve its public relations by setting objectives that were well crafted and aimed at delivering the best service to the recipients of health services (Martello, Watson, & Fischer, 2008).
Cattaraugus County Rehabilitation Center invested in improving its internal processes by focusing on enhancing its core capabilities, providing training to its staff, and implementing an information system that improved coordination between all functions of the organization (Martello, Watson, & Fischer, 2008). The organization developed a program to recognize and reward efforts of its employees to increase their motivation. The employees accepted change as they were appreciated financially for their role within the organization (Parmenter, 2012). The working environment that affects its services was considered to improve communication between employees and management. Moreover, the corporate values were shared and aligned across different departments to promote cohesive efforts by employees (Martello, Watson, & Fischer, 2008).
The weakness in the implementation of a balanced scorecard approach by Cattaraugus County Rehabilitation Center was the lack of learning and growth perspective in the balanced scorecard (Martello, Watson, & Fischer, 2008). The commitment of the organization to learning and growth in the long-term is crucial. The organization could fail to sustain the positive outcomes of the balanced scorecard approach. Although the case study indicates that Cattaraugus County Rehabilitation Center provided specific objectives, targets, and measure related to other three perspectives of the balanced scorecard, it lacked attention to the learning and growth perspective of the model. It must be understood that it is not possible for a firm to achieve long-term success without outlining its plan to ensuring continuous support and commitment of the management to fulfilling the organization’s mission and strategic objectives (Kaplan & Norton, 2015).
It could be concluded that Cattaraugus County Rehabilitation Center aligned its mission and vision effectively with the integration of the balance scored. The main focus of the organization remained on financial, customer, and internal processes perspectives of the balanced scorecard. The organization and its employees showed their commitment to the adoption of the balanced scorecard. The organization aligned its strategic objectives with operational targets. It achieved operational efficiency through the implementation of the balanced scorecard. The staff was committed and involved in the implementation process that made it easier for the organization to go through change. However, the approach used by the organization did not provide details of learning and growth perspective that could affect the applicability of balanced scorecard in the long term.
Asefeso, A. (2013). Balanced scorecard. Swindon, UK: AA Global Sourcing Ltd.
Kaplan, R., & Norton, D. P. (2015). Balanced scorecard success: The Kaplan-Norton collection. Boston, MA: Harvard Business Review Press.
Martello, M., Watson, J., & Fischer, M. (2008). Implementing a balanced scorecard in a not-for-profit organization. Journal of Business & Economics Research, 6 (9), 67-80.
Niven, P. R. (2008). Balanced scorecard: step-by-step for government and nonprofit agencies. Hoboken, NJ: John Wiley & Sons.
Parmenter, D. (2012). Key performance indicators for government and non profit agencies. Hoboken, NJ: John Wiley & Sons.
Savkin, A. (2016). Balanced scorecard in nonprofit and government organizations. Web.