This case study examines how Cattaraugus County Rehabilitation Center, a nonprofit serving individuals with disabilities, implemented the Balanced Scorecard framework to bridge the gap between strategic planning and day-to-day operations. Drawing on Kaplan and Norton's four perspectives—financial, customer, internal business processes, and learning and growth—the paper traces the organization's adoption process, including its mission and vision review, strategy map development, and the engagement of all personnel. The study concludes that the Center's implementation effectively reflected its organizational mission and vision, producing benefits that outweighed the time investment required.
The Balanced Scorecard is a concept introduced in 1992 through the publication of a landmark article in the Harvard Business Review. After its introduction, the concept was quickly adopted by various companies, reflecting the potential and power of this management tool. Within the first two decades of its inception, the Balanced Scorecard became a revolutionary management framework, as evidenced by its adoption by many private, public, and nonprofit organizations across the globe.
Cattaraugus County Rehabilitation Center is an example of a nonprofit organization that has adopted this concept. The organization began using the Balanced Scorecard approach in its strategic planning process as a measure toward bridging the gap between strategic planning and the daily activities of the Center. Cattaraugus County Rehabilitation Center adopted the approach with the ultimate objective of aligning each of its departments with the organization's overall strategic plan. As the adoption process demonstrates, the Center did an effective job of implementing a Balanced Scorecard in a fashion that reflects its organizational mission and vision.
The Balanced Scorecard was introduced by Kaplan and Norton to help organizations design, assess, and measure factors that enhance performance. Organizations have traditionally placed considerable emphasis on financial measures in their internal operations. When introducing the concept, Kaplan and Norton argued that dependence on financial measures alone is inadequate, since these measures are lag indicators that reflect the outcomes of past actions rather than drivers of future performance (Martello, Watson & Fischer, 2008, p. 68). The Balanced Scorecard retains financial performance measures while complementing them with factors that promote and enhance future financial performance. It is generally based upon the cause-and-effect relationships between financial and non-financial factors, which form the foundations of organizational strategy.
Kaplan and Norton emphasize the need to shift focus from tangible assets to intangible ones, because intangible assets had become the primary source of competitive advantage by the end of the twentieth century (Kaplan, 2010). Since the concept's introduction, it has become necessary for organizations to design initiatives for managing their intangible assets. This process is organized around four perspectives: financial, customer, internal business processes, and learning and growth. These four perspectives provide managers with a series of performance metrics balanced between outcome measures and the factors that drive future results.
Cattaraugus County Rehabilitation Center has existed for more than fifty years, having been founded by a group of parents who had children with disabilities. The Center had been engaged in strategic planning for many years, often relying on external consultants. While these efforts yielded some results, top management experienced persistent difficulties in bridging the gap between strategic planning and the daily activities of the organization. As a result, management was unable to develop a strategic plan that pervaded the entire organization and functioned as a living document. Following these unsuccessful attempts, the organization decided to adopt the Balanced Scorecard in order to align itself with its overall strategic plan (Martello, Watson & Fischer, 2008, p. 72).
One of the first major steps the organization took in applying the Balanced Scorecard was to review its mission, which primarily focuses on the customer. Because the Center's consumers are individuals with disabilities, its mission is to provide them with comprehensive services designed to help them achieve maximum independence. This review was followed by the development of a strategy map that articulates the Center's strategic objectives across the four Balanced Scorecard perspectives.
"Management process, strategy map, and benefits achieved"
Cattaraugus County Rehabilitation Center is an example of an organization that successfully adopted the Balanced Scorecard approach to enhance strategic planning and management. The organization chose this approach because previous strategic planning efforts had not produced the desired outcomes. While top management initially had doubts about the significance and effectiveness of the process, the organization's director convinced them to move forward based on the approach's potential benefits. The Center then reviewed its mission and vision and developed a comprehensive strategic plan for implementation, organized around four perspectives that guided the application of the Balanced Scorecard.
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