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Barriers of implementing the Balanced Scorecard in Egyptian banks
Barriers of implementing the Balanced
Scorecard in Egyptian banks
(Case study on a local private bank)
DBA - September 2014
Prof. Dr. Alaa Abdel Bary
Barriers of implementing the Balanced 2 Scorecard in Egyptian banks
3 Barriers of implementing the Balanced Scorecard in Egyptian banks
3. AIM of the research
4. Research objectives
5. Research problem
6. Literature review
7. The research design
8. Research significance
11. Dissertation outline
Barriers of implementing the Balanced 4 Scorecard in Egyptian banks
o This research aims to identify the barriers of
using the Balanced Scorecard as a strategy
management tool in the Egyptian private
o The research finding and recommendation will
support the Egyptian banks’ management to
adopt the Balanced Scorecard framework for
strategy management in their banks.
Barriers of implementing the Balanced 5 Scorecard in Egyptian banks
The research will cover the following areas:
o Identify the current strategy execution
practices adopted by the senior management
of the bank (under study),
o Identify the barriers of implementing the
Balanced Scorecard framework.
Barriers of implementing the Balanced 6 Scorecard in Egyptian banks
CBE Governance guidelines
o According to the governance guidelines of the Central
Bank of Egypt (CBE) approved on 5th Jul., 2011, the
board of directors is responsible of the approval of the
bank strategy and strategic objectives, overseen the
strategy execution, and make sure that it is
communicated to all the employees.
Barriers of implementing the Balanced 7 Scorecard in Egyptian banks
What is Strategy?
According to Michael Porter (HBR 4134, 1996),
Operational effectiveness and strategy are both
essential to superior performance, which, after all, is
the primary goal of any enterprise. But they work in
very different ways.
1. Strategy is the creation of unique and valuable position,
involving a different set of activities.
2. Strategy requires you to make a trade-offs in competing to
choose what not to do.
3. Strategy involves creating “fit” among a company’s
Barriers of implementing the Balanced 8 Scorecard in Egyptian banks
DOING DIFFERENT THINGS, OR
DO THE SAME THING DIFFERENTLY
Importance of Strategy
o According to Robers S. Kaplan and David P. Norton
(2008), The Monitor Group asked senior executives, in
a 2006 global survey about their priorities. Number 1,
by a clear margin, was strategy execution.
o The Conference Board in its 2007 survey reported that
executives’ number 1 priority was “excellence in
execution.” After the number 2 priority, “sustained
and steady top-line growth,” strategy execution again
appeared as priority number 3, “consistent execution
of strategy by top management.”
Barriers of implementing the Balanced 10 Scorecard in Egyptian banks
11 Barriers of implementing the Balanced Scorecard in Egyptian banks
The Balanced Scorecard
o Developed by Harvard professor Robert Kaplan and
consultant David Norton, the balanced scorecard does
not focus solely on financial objectives of the firm.
Rather the scorecard shifts the focus from financial
objectives to include the intangible assets.
o Translates the strategy into operational terms.
o The ONLY strategy managenet framework
o LEAD measures
Barriers of implementing the Balanced 12 Scorecard in Egyptian banks
AIM of the research
1. Investigate the barriers of implementing the
Balanced Scorecard as a framework for strategy
management in local banks.
2. Provide recommendations to the bank’s
management to adopt the Balanced Scorecard (BSC)
in their banks.
Barriers of implementing the Balanced 14 Scorecard in Egyptian banks
1. Identify the current strategy management’s practices
in local banks.
2. Identify the important barriers of strategy execution.
Barriers of implementing the Balanced 15 Scorecard in Egyptian banks
1. The Balanced Scorecard framework is not adopted
by local banks that led to unsatisfactory strategy
2. Most of the Egyptian banks’ executive and senior
management focus on operational effectiveness
activities of the bank.
3. Executives and senior management’s focus on
operational effectiveness and tactics has a negative
impact on performance of the whole bank
Barriers of implementing the Balanced 16 Scorecard in Egyptian banks
1. What’s the current strategy management framework
used in the bank?
2. What are the barriers to implement the Balanced
Barriers of implementing the Balanced 17 Scorecard in Egyptian banks
o Michael E. Porter explained the differences between
Operational Effectiveness (OE) and Strategy (1996).
o Robers S. Kaplan and David P. Norton (HBR 2008)
explained the importance strategy execution and
management using the Balanced Scorecard
o The topic of using the Balanced Scorecard in
commercial banks was covered in some researches in
India (Sagar R. Dave, 2012), but discussing the
barriers of using the Balanced Scorecard in Egyptian
commercial banks was not discussed in other
Barriers of implementing the Balanced 18 Scorecard in Egyptian banks
Literature review, cont.
o Ahmed et al. (2011) conducted a study in which they
surveyed a sample of 27 banks in Pakistan to identify
the measures that are used by the sample banks to
evaluate their performance according to the four
perspectives of the Balanced Scorecard (BSC).
Barriers of implementing the Balanced 19 Scorecard in Egyptian banks
Literature review, cont.
o Sabah M. Al-Najjar (2012) conducted a study to
contribute to the understanding of how Balanced
Scorecard (BSC) is developed and applied in
evaluating the performance of a Large Local Bank
(LLB) in Iraq. Using the concepts of Kaplan and
Barriers of implementing the Balanced 20 Scorecard in Egyptian banks
The research design
o The purpose of the research is to discover the barriers
of using the Balanced Scorecard (BSC) as strategy
management tool in a local private banks, and to
provide some recommendations for the management
to successfully implement the Balanced Scorecard
o The research type is exploratory, descriptive and,
qualitative. The research will be done using in-depth
interviews (IDI) with the executive committee (EC)
members of the Egyptian private bank (under study).
Barriers of implementing the Balanced 21 Scorecard in Egyptian banks
The research design, cont.
The proposed data collection will be as follows:
o An official request will be sent to the chairman of the bank
about the research purpose for approval.
o A confidentiality agreement will be signed with the
concerned person in the bank.
o The detailed questionnaire will be developed to support
the research objectives.
o Interviews with the executive committee members will be
o The interview will be conducted by the researcher.
o Data will be collected and analyzed using a statistical
o Research findings and recommendation report will be
discussed with the executive committee.
Barriers of implementing the Balanced 22 Scorecard in Egyptian banks
Barriers of implementing the Balanced 23 Scorecard in Egyptian banks
Research significance, cont.
Our research results will support the bank’s executive
committee members to apply the Balanced Scorecard
framework for their strategy management and hence
will outperform their competitors in the marketplace.
Barriers of implementing the Balanced 24 Scorecard in Egyptian banks
Limitations and delimitations
o This research will be conducted on a private bank and
the findings can’t be generalized to all the
governmental and international banks due to the
different management practices.
o The quality of the findings and recommendation
depends on the understanding and cooperation of the
executive members of the bank.
Barriers of implementing the Balanced 25 Scorecard in Egyptian banks
Consent, access and participants' protection
The researcher will sign a confidentiality agreement with
the bank under study and the detailed results and
findings will be treated accordingly.
Barriers of implementing the Balanced 26 Scorecard in Egyptian banks
Chapter 1 - Introduction
Chapter 2 - Literature Review
Chapter 3 - Research Methodology
Chapters 4 - Findings and Results
Chapter 5 - Discussion and Conclusion
Barriers of implementing the Balanced 27 Scorecard in Egyptian banks
1 month Chapter 1: Introduction
4 months Chapter 2: Literature Review
Chapter 3: Research Methodology and Research
1 month Chapter 4: Findings
1 month Chapter 5: Discussion and Conclusions
1 month References and appendices
Barriers of implementing the Balanced 28 Scorecard in Egyptian banks
o Robert S. Kaplan & David P. Norton (2008), The
Execution Premium. Harvard business school
Publishing Corporation, 3-5.
Barriers of implementing the Balanced 29 Scorecard in Egyptian banks
o Michael E. Porter (1996). What is strategy, Harvard Business
o Sabah M. Al-Najjar (2012). Designing a Balanced Scorecard to
Measure a Bank's Performance: A Case Study, International
Journal of Business Administration, Vol. 3, No. 4.
o Ahmed, Z., Bowra, Z., Ahmad, I., Nawaz, M., & Khan, M. (2011).
Performance Measures Used by the Commercial Banks in
Pakistan within the Four Perspectives of Balanced Scorecard.
Journal of Money, Investment and Banking, (21), 12-20.
o Sagar R. Dave, (2012). Applying Balanced Scorecard in Indian
Banking Sector: An Empirical Study of the State Bank on India.
Pacific Business Review International Volume 5 Issue 6.
o Charan, R., & Colvin, G. (1999). Why CEOs Fail? Fortune.
Barriers of implementing the Balanced 30 Scorecard in Egyptian banks
31 Barriers of implementing the Balanced Scorecard in Egyptian banks