THE EFFECTS OF THE IMPLEMENTATION OF THE BALANCED SCORECARD (BSC) ON Dissertation

THE EFFECTS OF THE IMPLEMENTATION OF THE BALANCED SCORECARD (BSC) ON FINANCIAL PERFORMANCE IN A SAUDI COMPANY - Dissertation Example 3. Analysis of the industry Saudi Arabia is one of the most powerful economies worldwide – even if it is not yet fully developed; the country has been a member of the WTO since 2005 (Abdallah, 2007), a fact that has been proved quite important for its economy. In accordance with a recent report of KPMG, Saudi Arabia is considered as ‘the 13th best place to do business’ (Fozan 2009). One of the key characteristics of the country’s banking sector is its dependency on the principles of Islamic finance (Mena FN 2011), a fact that should be taken into consideration when evaluating the potential effects of the Balanced Scorecard Model on the financial performance of banks in the particular country. The performance of the country in regard to each particular industrial sector is presented below in Graph 1. It is clear that the financial services sector of the specific country is of key importance for the national economy; the identification of methods that could e nhance the performance of firms operating in this industry would be of significant value – in terms of the expected benefits for the country’s economy. ... 4. Research problem The use of Balanced Scorecard as a strategic tool for supporting the performance of firms in the banking sector has been often characterized by failures; for firms in the banking sector of Saudi Arabia could a different result be expected? 4.1 Issues addressed in the research The research developed for this study focuses on the examination of the following issues: a) the theoretical framework of the Balanced Scorecard, b) the practical aspects/ requirements of the Balanced Scorecard when is used as a strategic tool for supporting the financial performance of modern firms, c) the expected benefits and the potential drawbacks of the Balanced Scorecard both in the short and the long term; reference will be made particularly to the effects of the Balanced Scorecard on the financial performance of firms in the banking sector, d) the use of Balanced Scorecard as a strategic tool in the banking sector of Saudi Arabia – referring to the presentation of the level at which the Balanced Scorecard is used by firms in the banking industry of the particular country, e) the expected requirements of the Balanced Scorecard if its implementation is attempted in firms operating in the banking industry of Saudi Arabia, f) the effects that the implementation of the Balanced Scorecard would be expected to have on the financial performance of banks in Saudi Arabia. 4.2 Issues excluded from the research The following issues will not be included in the research: a) the potential use of other similar models for the support of the financial performance of banks in Saudi Arabia, b) the potential combination of Balanced Scorecard with other