The balanced scorecard as a performance management tool for third sector organizations: the case of the Arthur Bernardes foundation, Brazil

Abstract

The aim of this paper is to contribute to the theory of public management by presenting empirical evidence of using the Balanced Scorecard for third sector organizations. The research was conducted within an interpretive paradigm using an action research strategy. Data was collected through focus group and individual interviews and analyzed using interpretation and content analysis. The main limitation of this study lies in its application to a very singular type of organization that operates as a driver to improve the efficiency and nimbleness of other public organizations, although the methods employed here are very likely to be applicable to other kinds of organizations without adversely affecting the results. The findings corroborate Kaplan and Norton's (2001) suggestion that non-profit organizations should put customers at the top of their strategic maps. They also indicate that sponsors should be considered a strong stakeholder in the strategic plan, and need to be satisfied in order to ensure legitimacy and sustainability. Although some authors have suggested that an overall framework should be devised for an entire organization, the evidence indicates that developing a single Balanced Scorecard for each department promotes cooperation rather than competition and leads to synergy rather than fragmentation.

Proposal to Implement the Balanced Scorecard in a Non- profit Organization

“…Thus, at the top of the BSC was the financial perspective that contained the most relevant financial metrics to see whether or not the organization was on track to make a profit. Later, the BSC was applied to nonprofit institutions with some success (Manville, 2007;Martello et al, 2008;Gomes & Liddle, 2009;Júnior et al, 2012;Retolaza et al, 2012;Gonheim & Baradei, 2013, Machado et al, 2013, Seth & Oyugi, 2013, Pinto & Angius, 2015. Profiting is not a primary target for nonprofit institutions, and therefore many have modified the original structure of the BSC, placing clients as a top-down perspective (Kaplan & Norton, 2001a).…”

“…Thus, over the last few years, several studies and investigations have been carried out on the application of BSC in nonprofit institutions that prove that this tool can bring benefits in terms of its performance (Kaplan, 2001;Manville, 2007;Martello et al, 2008;Gomes & Liddle, 2009;Júnior et al, 2012;Retolaza et al, 2012;Gonheim & Baradei, 2013;Machado et al, 2013;Seth and Oyugi, 2013;Pinto & Angius, 2015). As such, BSC can be a useful tool for these organizations to build strategy and organize and communicate operational activities (Kaplan, 2001).…”

A Managerial Perspective on the Use of the Balanced Scorecard for Non-Profit Organizations in Educational Field

“…According to Gomes and Liddle (2009), the purpose of the balance scorecard in a non-profit organization is putting customers at the top of their strategic maps. The paper presents the experience of using the Balanced Scorecard as a planning and performance appraisal tool for helping third sector organizations to: define objectives and targets; define performance measures; define actions for ensuring performance improvement; and ensure the institutionalization of a virtuous quality improvement cycle.…”

Strategic Planning in Brazilian Small-Scale Municipalities: is the Balanced Scorecard a feasible tool?

“…There is evidence that BSC has been employed in the USA and Canada (Askim, 2004), Great Britain (Kaplan and Norton, 2001), Australia (Yetano, 2009, Farneti and Guthrie, 2008, Hoque, 2008, Italy (Farneti and Guthrie, 2008), New Zealand Norton, 2001, Greatbanks andTapp, 2007), Norway (Chan, 2004, p. 216), among other countries. Despite being widespread in developing countries, there is few empirical evidence in literature about the application of the balanced scorecard (BSC) in developing countries (Gomes andLiddle, 2009, Ruas, 2003), but no evidence whatsoever for the specific case of Brazilian small-scale municipalities. Lee (2006, p. 52) argued that the following characteristics legitimate the BSC as a useful framework for improving performance and they are:…”