Financial
Perspective
Not only profit oriented oragnisations
but also non-profit organisations must have a solid understanding of their
financial situation. However this perspective is kept below the other
perspectives by NPO due to the priority of non-financial objectives and it will
raise the question how will the organisationbe affordedfor what they came
together to do.Funds for the operations will be generated both by trading
income and non-trading income. For an example in a religious organisation
trading income would be money collected from selling Dammabooks and non-trading
income would be the donations. Distribution of gains to targeted community and
promoting sustainability of the organisation are two aspects to be balanced by
NPO out of surpluses. Distributions (which indicate the quality of programmes) are
required to attract donors e.g.:distribution of stationery goods to school students
in a rural area. Funding sources, cost of services and overheads etc. could beincorporatedinto
NPO’s strategic plans and operating income, return on capital and economic
value addition could be measured. Through these measures it focuses on
improving value to stakeholders while controlling the cost since lack of funds.
Finally financial reports could improve the confidence of donors and other fund
grantors ensuring the financial sustainability.
2.2.2. Member Perspective
There is a
question of naming people who are involved with the NPO, as ‘customers’ due to
the variation and nature of dealings in compared to PO. Ali B. Somers (2016)
has widened the customer perspective as stakeholder perspective recognizing
them as employees, volunteers, suppliers, beneficiaries, donors and consumers.This
perspective focuseson improving stakeholder value and questions that how will
the organisation ensure that they are delivering what they had decided to
deliver from the start. The attitudes, satisfaction and retention of stakeholders
could be measured by setting objectives.
Internal Business Perspective
This perspective will question on how
the organisation will ensure that they are doing it in the most efficient way. It
concerns about the efficiency of programmes or services
offered and the ability to fulfil needs of the community. It measures the cost and quality of services
provided.
2.2.4 Learning and Growth Perspective
This view raises the question how will
the organisation move forward to ensure that they continue in the future or
achieve succession. This aspect looks at the human capital of the organisation
and measures the necessary skills, community connection and retention etc. In this
scenario skills, knowledge and attitudes of leaders and employees are essential
for the success of marketing, branding and donor development.
Mission Perspective
This perspective supersedes all the other
perspectives and highlights the importance of prioritising and achieving the
social objective. For an example religious organisations have focused on spreadingDamma
as much possible. All the other spiritual activities have been arranged around
this perspective. The effectiveness could be measured by setting objectives for
milestones and feedback programmes.
In order to apply BSC in to the
strategic planof the organisation, vision and mission of the organisationshould
be clearly stated andvision should be converted in to operational goals.Next it
is required to identify objectives and measures which is called a strategy map
and adjust strategy based on feedback. The responsibilities of volunteers/
members can be assigned as per the map andwork can be reconciled after the
completion.Outcome can be used as an external communication methodologyto
promote next and on-going activitieswhich will enhance the credibility towards
investors. Few examples for objectives and measures related to a religious
organisationhave been presented under appendix 01.
Since original BSC was developed to
cater PO (as per the literature reviews) amendments might be required (adding
mission perspective) to reflect the achievement of mission of NPO. Occasionally
implementation is difficult in NPO than PO due to unavailability of properorganisational
structure,absence of indicators which has linked to goals,lack of management
commitment, political issues, lack of resources and misrepresentation of
information. Most of these disputes have been arisen due to barriers in
implementing strategy i.e. BSC is applied to the organisational strategy and
failure in strategy execution leads to the failure in BSC. Mainly members do not understand the strategy
and superiors do not consume enough time to discuss on strategy. Further
budgets have not been linked to strategy and performance of superiors has not
been connected to strategy.Thus well-articulated mission and strategy, staff
involvement and training, identification of correct key performance indicators
and measures and communication are the critical success factors in BSC
implementation.
Successful implementation of BSCmay
enhance cross-functional collaboration, co-operation, communication and the
visibility across the organisations. Application of BSC to Sri Lankan
organisations would bring similar benefits Amendments may be required to the
original BSC especially in applying it to non-profit organisations.Implementation
should be well planned avoiding main barriers.