The use of the balanced scorecard in small companies

The Balanced Scorecard (BSC) is a performance measurement and strategic management system which appears suitable for use by all types and sizes of business. The BSC's greatest strength for most businesses comes from its innate ability to integrate financial and non-financial measures together by measuring both strategic and business performance across four interrelated perspectives. Many studies have shown that the BSC can be successfully implemented within large-scale companies and organizations. However, there is limited empirical evidence regarding the use of the BSC within small companies. This study adds to the existing literature by reporting the results of a comparative investigation of BSC awareness and use within small companies located in the UK and Cyprus. In addition, the study examines the reasons for non-adoption by small companies and whether these companies use performances measures that are similar to those typically contained within the BSC model. The research data was collected from self-completed questionnaires that were distributed to 500 companies in the UK and Cyprus. The findings of the survey suggest that the majority of small companies, especially in the UK, are unaware of the BSC, and consequently levels of BSC usage are extremely low. Certain respondents believed that BSC is an unsuitable tool for small companies and that its implementation is beyond the resources available to such entities. However, the findings also suggest that even though very few small companies actually use the BSC, many such companies appear to use performances measures and indicators similar to those typically included within a BSC model.