Balanced Scorecard In Hsbc Bank Accounting Essay

balance circuit card In Hsbc Bank Accounting sampleCHAPTER 1In the past decades, many nerves were facing intensive pressures for changes in strategies and structures with appear a proper gracious resource counsel and execution of instrument instruction exemplification (Weng, 2011). It has been a challenge to many managers to measure and appraise their human capital with an increasing and constantly changing volume of employees across the disposal at incompatible levels as well as across different geographic locations with high consistency and banners. Therefore, it is crucial that administrations have a strategical c at a timern tool. Much debate has been taken to find the most cost-efficient way of measuring not however a companys financial surgery but excessively how the company satisfies its customers and employees (Kocakulah and Austill, cc7). Then in 1992, Kaplan and Norton introduced a BSC model. Their pattern of BSC has opened a new field in the literature of commission control (Franco and Bourne, 2003). Since so, BSC has been an interesting topic that many academic authors choose to write. The reasons why the seeker is interested to write about(predicate) BSC argon as spare-time activity.First, it is substantial that writ of execution step be of great signifi rout outce to an organic law, playing as a tool in conveying the companys strategies to individuals objectives (Smith and Kim, 2005). Drucker (1954) also highlighted that all employees, from a big boss to a junior clerk, should have personal work objectives that aligns strongly to the companys system. Therefore, the application of BSC really seconds organizations to depict such objectives evidently. According to Kocakulah and Austill (2007), when morphologic changes and job specifications become more complex, it is required to develop a methodological analysis and formula that can align the organisational strategies and master(prenominal)(prenominal) principles with writ of execution beat and heed indicators. Kaplan and Norton (1992, cited in Kaplan, 2010) recognised that any comprehensive bill and management schema has to link available surgical procedure meliorations to customer and financial exertion.Second, BSC was presented as the most practical and comprehensive performance measurement model and has then become a popular strategic tool amongst managers all everywhere the world (Sanayei et al., 2011). In recent years, the BSC has been a comprehensive model when flavor at management issues for financial and non-financial employments and has been very popular as it attracts a lot of tending (Norreklit, 2000). It has been widely used by many companies and has gained general acceptance as a useful tool for management. From 1992 to 2000, more than 200 companies adopted the BSC method (Kaplan and Norton, 2001 cited in Kocakulah and Austill, 2007). In 2001, David Norton estimated that about 50 sh be of large organizations in t he United States were using the BSC, about 45 per centum in Europe and about a third of the large organizations in Australia used the BSC (Weber et al., 2001 cited in Kocakulah and Austill, 2007). Another recent guinea pig by Bain connection indicated that 57 sh are of firms worldwide use the equilibrate menu, including 75 percent of large firms and 64 percent of firms in North America (Rigby and Bilodeau, 2005). The Harvard bloodline Re trip up in 1997 listed it as one of the 75 most powerful ideas of the 20th century (Bible et al., 2006).Apparently, BSChas become the leading strategic management trunk of the 21st century. Organizations use the plug-in to frame an built-inly new performance management framework that jells strategy at the centre of ob deal management processes and bodys (Kaplan and Norton, 2001).Third, BSC has been chosen by many financial and money boxing institutions as a separate to achieving a successful execution of their strategic plans (Frig o et al., 2000), whereas Aranda and Arellano (2010) stated that it is for strategic information and performance measurement. As a result, BSC was chosen by HSBC Bank to put into use in its early stage of starting traffic in Vietnam. Throughout all these stages, BSC has invariably been used at all levels as (i) a strategic tool to connect organizational goals with 1500-employees targets and (ii) a standard performance measurement trunk to drive individual performance, evaluate their achievements and create values (HSBC Vietnam, 2011).HSBC Bank, a member of HSBC Holdings conclave, is one of the worlds largest financial institutions and the biggest foreign bank in Vietnam. It established the premier to the full-service branch in Ho qi Minh City in 1995 and then expanded to 17 branches and offices across the nation. It strategically directiones on Premier Centers with a enjoyment of delivering world-class international work to high-profile customers. Currently there are one P remier Centre in Hanoi (the North) and one in Ho Chi Minh City (the South) (HSBC Vietnam, 2012) lot a identification number of 6,000 Premier customers.Forth, the enjoyment of BSC in HSBC has been strongly recognized by either employees or managers at all levels. At Group and condescension level, it supports the implementation of the business strategy, ensuring that all aspects that contribute to its success are taken into account. At a team level, it helps managers align their objectives with those of the business and concenter their efforts and resources on what is most relevant. Individually, it helps an employee bring in how her/his work links with and affects the success of the organization (HSBC Vietnam, 2011).The conciliate of performance measurement and management at HSBC Vietnam have been evaluated by surveys conducted bank-wide to collect employees feedback and response. Such surveys then supported managements strategic analysis and improvement plan (HSBC Vietnam, 2011). However, there has been little empirical explore into whether the balanced scorecard actually works in practice (Neely, 2008). Moreover, as targeted out by Hung-Yi Wu (2012), most of the BSC- link studies have focused mainly on performance measures quite than the causative relationships between key performance indicators for the purpose of strategy implementation. This is the first clock a research is conducted in HSBC (Vietnam) Ltd. at a more focused level with specific attributes directly related to individual BSCs perspectives and capableness relationships as well as their impacts. Accordingly, the author chooses to study on the below topicBALANCED SCORECARD IN HSBC BANK (VIETNAM) LTD.PREMIER CENTERS tyrannical degree AND NEGATIVE EFFECTS1.2. SIGNIFICANCE OF STUDYThe initial purpose of this study is to gain encourage visualiseing of BSC and its role as a performance management tool in an organization. Many studies by Gates (1999), Lingle and Schiemann (1996) sug gested that organizations managed through balanced performance measurement systems perform better than those that are not. Therefore, the research can help figure out substantiating results on a specific organization using the scorecard to support those ideas.Besides, it de bring out serve as a guide to business strategy planning. According to Davis and Albright (2004) and small et al. (2000), banks can save an enormous amount of time and money if they understand which measures, financial or non-financial, are best suited to their necessitate. As such, it is expect that the study can indicate whether the current BSC applied in HSBC is high-flown in a way that an usurp mix of performance drivers and government issue measures has been tailored to the business units strategy (Frigo et al., 2000).In addition, the study reemphasizes the important role and affirmatory effects of BSC on an organizations strategy implementation. As mentioned by Hung-Yi Wu in his 2012 work, banking institutions must develop an effective way to align their strategies with corporate goals found on performance analyses if they are to sustain their competitive advantages. Such effective way is recommended to be the BSC model, which is proved to be a useful and efficient tool in communicating organizations goals and targets to all bank staff and in performance measurement (Bible, et al., 2006). Moreover, the research is to identify good points related to BSC in both academic publications and real-world experiences of an organization.Apart from that, the research helps the author and readers analyze the difference of opinion of BSC from theoretical to practical perspectives based upon feedback of surveyed employees. Accordingly, it is good to understand how BSC has been adapted and implement in the context of HSBC in Vietnam, which is, as pointed out by Burney and Swanson (2010), total to the development of systems that go forth effectively obtain organizational goals. The resea rch testament definitely give more insights of the banks BSC implementation process and effectiveness.Furthermore, the research lead reveal HSBC employees satisfaction level and specific feedback on the banks BSC system and adjoin understanding of its strategic link and potential relationships between BSC measures in practice. It allows the business to stay competitive and profitable (Zeng and Zhao, 2005) in sustainable development.However, apart from the positive effects of BSC on HSBCs execution of strategy, the research also helps to figure out some gaps and areas for attention and improvement that will be analyzed in the following chapters. In case its results are appreciated and draw the attention of higher management then it can make further percentage to the development and acknowledged effectiveness of BSC in HSBC Vietnam. This article may help the management to focus on the need to complete the implementation of BSC system to maximize its benefits and minimize the negat ive effects. The disclosure of the shortcomings, if any, is crucial as it will entice organizations to search for measurement systems that support them better in the thought-provoking business environment (de Waal and Counet, 2009).With these above reasons, the author strongly believes that the topic Balanced Scorecard in HSBC Bank (Vietnam) Ltd. Premier Centers positive and negative effects will help the readers get more into the research.1.3 RESEARCH OBJECTIVES AND QUESTIONSAccording to Varkevisser, Pathmanathan Brownlee (2003), the objectives of a research project tally what is to be achieved by the study. It is advised by Ababa (2005) that if specific objectives are properly formulated, they will facilitate the development of research methodology and will help to orient the collection, analysis, interpretation and utilization of data. Therefore, these objectives should be closely related to the research problem (Saunders et al., 2009). Furthermore, objectives should be logic al, coherent, feasible, realistic and considering local anesthetic conditions as well as being qualifyd in operational circumstances that can be measured and phrased to clearly meet the purpose of the study (Ababa, 2005). With the topic Balanced Scorecard in HSBC Vietnam Ltd. Premier Centers positive and negative effects, six objectives of the study are determined as following.To understand the concept of BSC and its perspectives as a performance measurement tool,To identify positive and negative effects of BSC in HSBC Vietnam,To measure if HSBC BSC model is different compared to an prototype model,To evaluate the relationship between employee understanding of the organizations objectives with a well-performing organization,To analyze the causal relationships (if any) amongst four perspectives of BSC, andTo identify the weakest one of the four perspectives to improve.With these research objectives, the study is to be conducted to clearly answer the questions relevant to the topi c as below.What is the Balanced Scorecard and its four components?What are HSBC BSC positive and negative effects?What is an ideal BSC model and what is HSBC BSC compared to it?How do HSBC employees understand the organizations objectives and its relationship with a well performing organization?Are there any relationships amongst four perspectives?Which one among the four perspectives needs more focus?1.4 BOUNDARY OF THE STUDYDue to the limitation of time and scope of work, this research only focuses on a small group of employees, hereinafter mentioned as those working at two Premier Centers in Hanoi and Ho Chi Minh City, but not extended to the entire number of about 1500 employees bank-wide. Two Premier Centers have a number of 60 staff including Premier Center Managers, Sales Managers, Relationship Officers, function Managers, Services Assistants, Counter Officers and tellers. As such, the findings and results are only typical of part of the real figures and possibly not comple tely accurate.In addition, the research is only conducted at employees level or a single group of employees point of have rather than on the senior managements stand point, then there will be some imbalanced justifications and explanation after the survey.It is hoped that once the research methodology is proved to be trustworthy enough to the representative sample, it will be supported to apply to the whole bank with full participation of employees at all levels including senior managers to get a broader view and more precise results.1.5 OUTLINE STRUCTUREThis paper consists of five main chapters.Chapter 1 IntroductionThis 2389-word section is an introduction to the research, serving as an instructive context to what leads the author to the chosen topic and why to choose the topic. In addition, it is followed by a brief summary of significance of the study and key issues that the research work intends to address. The scope of study is also included in the first chapter in order to narrow the boundary and put the focus on the research area.Chapter 2 Literature ReviewThis 4836-word chapter is the theoretical background of the study focusing on the relevant literature and theories on performance measurement, balanced scorecard and its perspectives. It helps to demonstrate an understanding of the research topic and its environ content. At this stage, it is important to critically review many academic authors points of view on the research topic and related issues. From those literatures, specific hypotheses are genuine as a foundation to start the research.Chapter 3 MethodologyIn this part, the research philosophy, strategy, method and approach used in this study are described. It also presents the process of gathering data, sampling method, implementation of questionnaires and techniques of analysis. Some estimable issues when conducting this research in a banking organization resembling HSBC are also mentioned. 3836 is the number of words in this chapter.C hapter 4 Data Analysis and give-and-takeThis section outlines the findings and results of information collection at HSBC as conducted in chapter 3. Feedback from its employees will be revealed through a list of figures and tables. The proposed hypotheses will be further discussed based on the results. There are 3897 words for this chapter.Chapter 5 Conclusions and RecommendationsThis is a summary of the main conclusions of this research and feasible recommendations to the research issues. Some limitations and suggestions for side by side(p) researches are also included.CHAPTER 2LITERATURE REVIEW2.1 IntroductionThis chapter will cover the literature on performance measurement, strategy map, balance scorecard and its role in aligning organizational goals to the strategy. By studying related literature on BSC, it is seen that BSC really plays a significant role in the success of an organization and that it helps to measure the success of the strategy (Kaplan and Norton, 2001). Schneid erman (1999) stated that balanced scorecards that did not have a sound foundation would fail. Therefore, this chapter will summarize the positive and negative effects of BSC collected from many studies and elaborate hypotheses to name the effects of BSC in practice of a specific organization. Additionally, it is learnt from this chapter that the four perspectives of BSC are inter-related, and that even though financial results are very important, delivering long term value and success will require a focus on non-financial factors including high performing people, efficient processes and effective customer services (Kaplan and Norton, 1996). The following part is related conceptualization on the research content.2.2 Performance measuring rod2.2.1 DefinitionPerformance measurement is defined by Lebas (1995) as a system by which a company monitors its daily operations and evaluates whether it is attaining its objectives. Meanwhile, Lichiello and Turnock (1999) define it as the select ion and use of quantitative measures of capacities, processes, and outcomes to develop information about critical aspects of activities, including their effect on the public. Basically, it is considered part of a performance management system (Sanayei et al., 2011) and is set aligned with the organizations strategy.According to Hronec (1993), performance measurement system is a tool for balancing multiple measures (cost, quality, and time) across multiple levels (organization, processes and people). while it was suggested by Green et al. (1991) to target the value-added activities of the company, Kaplan (1991) suggested that an effective performance measurement system should provide timely, accurate feedback on the efficiency and effectiveness of operations. In fact, organizations always plan to build an effective tool to help them manage the performance and well achieve the targets.2.2.2 The role of performance measurementAccording to Christian C. Johnson (2007), it is important t o understand why measuring an organizations performance is both necessity and vital. An organization in operation(p) without a performance measurement system is like an airplane flying without a compass, a Formula One endure car driver guiding his car blindfolded, or a chief executive officer operating a company without a strategic planThe purpose of measuring performance is not only to know how a business is performing but also to enable it to perform better. The ultimate purpose of implementing a performance measurement system is to improve the performance of an organization so that it may better serve its customers, employees, owners, and stakeholders.Basically, a performance measurement system enables an enterprise to plan, measure, and control its performance according to a pre-defined strategy (Johnson, 2007). Many authors including Atkinson and McCrindell (1997), De Toni and Tonchia (2001), as cited in Pongatichat and Johnston (2008), have identified its benefits as a to ol to (i) communicate the organizations strategic direction, strategic priorities, (ii) create a divided up understanding, (iii) monitor and track the implementation of strategy, (iv) align short-term actions with long-term strategy, (v) make clear the links between performance of individuals and sub-units, and sub-units and overall organizational performance, (vi) heighten integration among various organizational processes, (vii) focus change efforts, and (viii) facilitate organizational learning.2.2.3 Different performance measurement modelsMany researches on banking performance measurement used traditional measures like statistical analysis (Arshadi Lawrence, 1987 Devlin Gerrard, 2005), structural equation models (SEM) (Collier, 1995), multi-criteria classification methodology (PARCLAS) (Kosmidou et al., 2006) and DEA (Giokas, 2008). In the meantime, Wu et al. (2011), Chen et al. (2008), and Meyer and Markiewicz (1997) chose to adopt the four BSC perspectives, including both financial and non-financial indicators. In their 1992 work, Kaplan and Norton also described performance measurement as a way to review an organizations financial and non-financial goals. Figure 2.1 summarizes the selection indicators of banking performance measurement that have been investigated in several important studies, along with their main analytical methods (Wu et al., 2011).According to Weber et al. (2001) and Bible et al. (2006), traditional measures no lifelong worked effectively because those measures relied so strongly on financial indicators and did not sufficiently cover other critical factors like skills, competencies, and motivation of employees customer and provider relationships innovative product development databases and information technologies efficient and responsive operating processes innovation in products and services customer loyalty and relationships and political, regulatory, and societal approval. Meanwhile, the BSC can cover all these measures in a more specific and appropriate way that supports management in implementing organizational goals.