Although literatures abound for big companies where execution of the Balance Scorecard is rather common, survey aimed on the executions and restrictions of the Balanced Scorecard in little and moderate-sized endeavors ( SMEs ) is non easy to uncover. This is despite the widespread theoretical cognition bespeaking that execution of the Balanced Scorecards in SMEs is more likely to neglect compared to larger houses. This survey seeks to place the grounds for the failure of the Balanced Scorecards execution among service SMEs in the Kingdom of Saudi Arabia ( KSA ) . It specifically investigates the challenges confronting Saudi service SMEs in following and implementing their Balanced Scorecards. To back up make fulling the spread, this paper was prepared looking into Saudi Service SMEs that face challenges in their attempts to implement the Balanced Scorecard. The research explores the cause of the unsuccessful execution of the Balanced Scorecard. The research purpose of this paper is to place the challenges confronting directors in implementing the Balanced Scorecard and provides grounds why these challenges have come to put. Data was gathered for this paper via instance surveies and interviews. Fifteen in-depth interviews were performed, with the directors concerned with the design and execution of the Balanced Scorecard. The research worker besides looked at houses internal studies, and collected information relevant to the design, and execution of the Balanced Scorecard in those houses. The consequences obtained from this survey indicate that hapless design and execution of the Balanced Scorecard, coupled with the deficiency of resources to ease the execution are the biggest subscribers to the job. Other challenges included deficiency of senior direction committedness to the undertakings ; hapless employees and stakeholder battle and communicating ; long development procedure and incapacity caused by the deficiency of human capital and equipment, including package and hardware.
Chapter 1: Introduction
This chapter introduces the thesis and provides an equal background and principle for the research. The survey will seek to measure the application of the Balanced Scorecard in the Services sector. It peculiarly focuses on Small and Medium-sized Enterprises ( SMEs ) operating in the Kingdom of Saudi Arabia ( KSA ) , and aims to place the challenges confronting directors in the execution of the Balanced. The research will besides explicate factors lending to the challenges.
Background to the Study
1.2.1 SMEs in Saudi Arabia
Saudi Arabia is the biggest state in the Gulf Cooperation Council ( GCC ) , both geopolitically and economically, with its economic system being mostly dependent on its huge oil sedimentations. It non merely has the biggest oil militias in the universe, but is besides the universe ‘s biggest manufacturer and exporter of oil. Oil histories for approximately 90 % of exports and approximately 80 % of authorities income ( The Economist Intellegence Unit, 2012 ) . With the authorities ‘s successful execution of the foreign direct investing policies and the power of the banking and pecuniary system have supported the state to go the first regional fiscal system and an of import market in the universe. While Saudi has a stable and strong fiscal and banking system, which encourages private investings through huge funding and authorities advantages, SMEs face troubles in procuring support and support.
1.2.2 SMEs in Saudi Arabia face some Major jobs.
Harmonizing to the Saudi Chamber of Commerce, SMEs face tremendous challenges which include the absence of incorporate on the job descriptions for SMEs and deficiency of adept Saudi human resources in assorted Fieldss i.e. Management, accounting, selling, proficient, engineering and other indispensable abilities. Other troubles include unequal support, hapless information and policy models, coupled with inadequate or deficiency of inducements, ordinances and weak bonds between big houses and SMEs, ( Atkinson, Waterhouse and Wells, 1997 ) .
The Government of KSA confirmed the formation of National commission two old ages ago, which is accountable for the readying of comprehensive schemes to promote and develop SMEs, through the cooperation of high official members of different adept Government and private functionaries. This has nevertheless been hampered by the slow creative activity of the commission due to the challenges undertakings in the manner of the work of the commission.
1.2.3 Challenges for SMEs in KSA
Within the present fiscal clime, Saudi SMEs face formidable challenges that restrict their capableness to stay competitory and sustainable. The absence of focussed and changeless support services and programs, which fulfil the demands of SMEs across their betterment stages, has to a great extent contributed their short lives. On norm, SMEs last seven old ages. Leading among SME challenges is their incapableness to entree capital ( debt and equity ) that is related to their exceptional stage of enlargement. Equity investing is of import for endurance of a venture, peculiarly in its early stages. Though, in KSA a famine of venture capital and angel investor financess is at that place that encourage immature organisations in different Fieldss.
With respect to debt capital, less than 2 % entire loaning of Saudi Bankss is traveling to SMEs contrasted to about 14 % in non-GCC states. In malice of the size of sector, investors avoid imparting to SMEs for different motivations ( The Economist Intellegence Unit, 2012 ) . Generally, a common deficiency of accessible and dependable cognition is there is about them. Furthermore, no confirmed legal state of affairs is at that place that supports for indirect register and legal enforcement in affair of default. Last, different SMEs do non hold audited fiscal studies, efficaciously restricting the chances of procuring funding or gauging their public presentation. This needs pecuniary organisations to pass greater resources and clip in serving them, ensuing in enhanced working costs, either doing loaners to bear down premiums to SME consumers, or disregard them wholly.
All of these jobs enhance the jeopardies of loaning. Without the proper inducements for loaners to heighten the flow of recognition to the SME sector, or the suited scheme tools to command their jeopardies, Bankss can non be anticipated to show SMEs a major portion of their loaning portfolios. Other issues for SMEs contain a demand of adept human resources in concern and proficient Fieldss, bureaucratic ruddy tape, a deficit of market cognition, and a usually delicate policy/regulatory status.
The Saudi authorities, along with the private sector has identified the possibility of SMEs and their demand for an extended base of support consisting capital ( debt and equity ) , developing and concern installations. Actually, Saudi Arabia has the biggest figure of private and public sector SME support programs within the GCC ( The Economist Intellegence Unit, 2012 ) . The presently defined Ninth Economic Plan looks to turn SME support, farther through heightening the capableness of specialised financess and pecuniary establishments to give recognition to SMEs, while at one time supplying different manners of proficient support.
Even though their Numberss are big and some of the programs are good supported and productive, the current SME support programs perform in an uncoordinated and fractured state of affairs. A basic deficiency is there about strategic cooperation which stops a holistic method to turning the sector. Consequently, of import lessons are lost and efforts are usually duplicated taking to higher costs and preventable redundancies. SMEs are mostly self-dependent and directors are required to research best patterns in order to last and turn their concerns. Employment of systems such as the Balanced Scorecard to accomplish corporate ends and high public presentation is of import to SMEs.
1.3 Rationale for set abouting the Research
The principle behind this research is the writer ‘s involvement in the subject. The research worker ‘s background is in operations direction and finance. This has enabled the writer to understand the concern workings of SMEs in the services sector. The research worker is a citizen of Saudi Arabia and is interested in the field of disposal and direction. This paper looks into the application of the Balanced Scorecard in Saudi services SMEs. The writer believes that the merchandises of this research will assist concern with scarce resources to better their operational effectivity and efficiency. This survey will besides supply direction with an apprehension of current issues related to the Balanced Scorecard and help them in accomplishing better organisational public presentation.
1.4 Research Aim
To look into the challenges confronting directors of SMEs that are supplying Servicess in Saudi Arabia and are implementing the Balanced Scorecard as a strategic planning system.
1.5 Research Questions
What are the challenges confronting directors in implementing the Balanced Scorecard?
Why and how these challenges were created and emerged?
How these challenges can be overcome through looking at the different factors related to Balanced Scorecard execution in SMEs?
1.6 Undertaking Roadmap
This research paper is organized in the undermentioned order:
Chapter 2 – Literature Review, which covers the Saudi SMEs ‘ operating environment and provides a elaborate literature reappraisal sing their operations, public presentation and the Balanced Scorecard.
Chapter 3 – Research Methodology
This chapter provides inside informations on the methodological analysis applied in this research. It shows the scheme of the paper, performed research attack and the methods of informations digest applied.
Chapter 4 – Findingss and Analysis
This subdivision highlights the findings found based on the followed methodological analysis.
Chapter 5 – Discussion and Recommendations
This chapter discusses the deductions of the findings, by supplying recommendations for Saudi service SMEs.
Chapter 6 – Decision and Further Research
This chapter provides a decision of this paper and suggests future research possibilities.
Provides a conclusive list of all the beginnings that were used in the study and undertaking