Recognizing some of the weaknesses and vagueness of previous management approaches, the Balance Scorecard approach was developed in the early 1990's by Dr. Robert Kaplan (Harvard Business School) and Dr. David Norton. A new approach to strategic management, the Balance Scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective.
The Balanced Scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision, strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and result. When fully deployed, the Balanced Scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Today, some Korean public firms have implemented the Balanced Scorecard to increase and enhance personal and organizational performance as one performance measuring system because the standard of performance measures and high level of personal and organizational performance can be created.
Firstly, the applicability of the Balance Scorecard approach to Korean ocean-going shipping firms' management system will create more effective and efficient organizational performance by making a balance among missions in the organization while affecting non-financial indexes.
Secondly, the approach suggests positive information and theoretical evidences to improve Korean shipping firms' management system while examining the availability of the Balanced Scorecard as a management tool.
The research methodologies used in this study are as follows:
First, literature surveys and reviews those examine management system to improve/enhance organizational competitiveness. Second, factors which are related to competitiveness of ocean-going shipping firms that are generated from analysis on their management situation and shipping market environment. Third,literary surveys and studies about the Balanced Scorecard are reviewed. Fourth,factors of the Balanced Scorecard which facilitate organizational objectives are generated from questionnaire and its' relationships are reviewed. Fifth, for statistical inference, the Reliability Analysis (Cronbachs Alpha-Test) method, the factor Analysis Method, Correlation Analysis and the Structural Equation Modeling (SPSS AMOS 4.0) are used to examine relationships between the four factors from Balanced Scorecard Model and the dependent variables such as the capabilities for handling external and internal environmental changes in the Korean Shipping Companies.
This study suggests four perspectives to the applicability of the Balanced Scorecard into Korean shipping companies:
Firstly, it is verified that the Balanced Scorecard approach can be applicable to Korean shipping firms. Secondly, the most important perspective among the Balanced Scorecard's 4 perspectives are the Customer Perspective and then the Financial Perspective. Hence, Korean ocean - going shipping firms'competitiveness can be explained as a reliable shipping service to the customer. Thirdly, the most critical success factor to strengthening the Learning and Growth Perspectives based on questionnaires are the success of teamwork stabilization among business units. Fourthly, in internal process perspective,establishment of information system and strategic alliance with shipper is the most critical factor. Fifthly, providing a reliable shipping service in the Customers Perspective and ability to create new service line is the most important factor.
This study provides CEO in Korean ocean-going shipping firm guidelines and availability as to what kinds of factors should be considered and what is the most critical factor in adopting the Balance Scorecard into their business.