See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/242354935

Assessing the balanced scorecard as a management tool for hotels

Article  in  International Journal of Contemporary Hospitality Management · August 2005

DOI: 10.1108/09596110510604805

CITATIONS READS
108 3,005

1 author:

Nigel Gareth Evans

Teesside University
36 PUBLICATIONS   613 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Strategic management for tourism hospitality and events View project

All content following this page was uploaded by Nigel Gareth Evans on 31 March 2016.

The user has requested enhancement of the downloaded file.

 International Journal of Contemporary Hospitality Management
Assessing the balanced scorecard as a management tool for hotels
Nigel Evans
Article information:
To cite this document:
Nigel Evans, (2005),"Assessing the balanced scorecard as a management tool for hotels", International
Journal of Contemporary Hospitality Management, Vol. 17 Iss 5 pp. 376 - 390
Permanent link to this document:
http://dx.doi.org/10.1108/09596110510604805
Downloaded on: 31 March 2016, At: 04:15 (PT)
References: this document contains references to 52 other documents.
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

To copy this document: permissions@emeraldinsight.com

The fulltext of this document has been downloaded 8594 times since 2006*
Users who downloaded this article also downloaded:
(2006),"Strategy implementation: a role for the balanced scorecard?", Management Decision, Vol. 44 Iss 10
pp. 1441-1460 http://dx.doi.org/10.1108/00251740610715740
(2009),"The balanced scorecard: a new challenge", Journal of Management Development, Vol. 28 Iss 5 pp.
393-406 http://dx.doi.org/10.1108/02621710910955930
(2001),"Rethinking performance measures: assessing progress in UK hotels", International
Journal of Contemporary Hospitality Management, Vol. 13 Iss 3 pp. 128-136 http://
dx.doi.org/10.1108/09596110110388918

Access to this document was granted through an Emerald subscription provided by emerald-srm:312600 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for
Authors service information about how to choose which publication to write for and submission guidelines
are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as
providing an extensive range of online products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee
on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive
preservation.

*Related content and download information correct at time of download.

 The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/0959-6119.htm

IJCHM
17,5 Assessing the balanced scorecard
as a management tool for hotels
Nigel Evans
376 Teeside Business School, University of Teeside, Middlesbrough, UK

Abstract
Purpose – This study seeks to assess the balanced scorecard (BSC) approach to strategy and its
usefulness for the international hotel industry.
Design/methodology/approach – The paper undertakes a wide-ranging literature review which
focuses on strategic implementation and the BSC approach, which is compared and contrasted with
evidence of practice derived from a survey of hotels in Northeast England.
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

Findings – In reviewing the literature it is clear that sources relating to the more detailed
implementation issues of strategy (which is where BSC can be cited) is relatively scarce. Furthermore
the strategy literature relating to the hospitality sector is relatively weakly developed. However, the
reports are available which indicate the usefulness of a BSC approach, albeit modified to suit
individual circumstances, but also point to potential pitfalls in its implementation. The primary
research conducted indicates that a wide variety of measures are currently being used and that many
hoteliers are using measures from all four of the category groupings identified in the BSC framework.
Research limitations/implications – The primary research is based on a limited survey of hotels
and it is recognised that further research is necessary to establish the exact nature of the causal
linkages between performance measures and strategic intent and also to gain insights into practice
elsewhere.
Practical implications – The paper considers a broad range of generic and industry-specific
literature sources and concludes that, despite its limitations, such a structured approach to strategy
provides a useful managerial tool for hotel managers.
Originality/value – The paper will be useful to academics with an interest in strategic
implementation and performance measurement, and also to practitioners seeking an understanding
of a practical managerial tool in terms of its benefits and potential difficulties.
Keywords Strategic management, Balanced scorecard, Performance measures, Hotels, England
Paper type Research paper

International Journal of
Contemporary Hospitality
Management
Vol. 17 No. 5, 2005
pp. 376-390
q Emerald Group Publishing Limited
0959-6119
DOI 10.1108/09596110510604805
Introduction
Measuring organisational success and implementing effective strategies for future
success represent continuous challenges for managers, researchers and consultants.
Whilst financial measures are clearly important, new frameworks have emerged in
recent years that take into account a broader range of measures. These frameworks
aim to respond to the criticisms levelled at financial measures, namely that they are
one-dimensional and that they are inherently backward-looking in that they record a
“history of a firm” (Chakravarthy, 1986). The frameworks have increasingly purported
to represent not merely a way of measuring the success of an organisation but go
further in that they offer managers a “road-map” by which they can manage. In
particular they focus on the way in which a strategic vision can be realised, i.e. on
strategic implementation.
Against this background of an emerging literature in strategic management and
continual striving to find a workable means of strategic implementation, managers in a
wide variety of industries are rethinking their performance measurement systems
 (Eccles, 1991). Arguably, nowhere is this more apposite than in the hotel industry. A Balanced
rapid switch from local and domestic competition to a “global” market place in which scorecard as
international hotel companies strive to develop and implement strategies that will
ensure strategic success (Brotherton and Adler, 1999) has led to increasing attention management tool
being given to performance measurement and strategic implementation.
Within this context, this paper aims to place one of the frameworks within the
context of strategic management and to assess the way in which performance 377
measurement is being dealt with in the hotel industry. Specifically, the objectives of
this study are:
.
to review the strategic management literature relating to strategic
implementation;
.
to consider the usefulness of the “balanced scorecard” (BSC) as a key technique of
strategic implementation;
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

.
to evaluate the extent to which BSC techniques have been applied in the
hospitality sector in particular; and
.
to evaluate the means by which a sample of hotels (in Northeast England) are
measuring their performance.

Strategic implementation
Much of the generic strategy literature focuses on strategic analysis and formulation
phases. The more detailed implementation phase has received less attention, as several
authors including Mockler (1995), Candido and Morris (2001), and Kaplan and Norton
(2001, p. 1) point out. Furthermore, the so-called “quality gurus” such as Tom Peters
(1982) have largely abdicated responsibility for delineating patterns of implementation
that are coherent (Morris and Haigh, 1996). Other authors make important
contributions by pointing to the difficulties inherent in the implementation phase
(Epstein and Manzoni, 1998) or by calling for a reassessment of the difficulties inherent
in the process (Lorange, 1998).
This phase is concerned with turning the strategic vision for an organisation’s
future development into tangible and realisable results, and many conceptual
frameworks have emerged that attempt to match measurement with business strategy
(Thomas et al., 1999). These frameworks, such as the Boston Consultancy Group (BCG)
portfolio planning model, and theories such as game theory, are assessed by authors
such as Coe (1981), Bettis and Hall (1982), Hapeslagh (1982), Fraguhar and Shapiro
(1983) and Hamermesh (1986). However, the models and theories, whilst useful in
themselves, are limited in terms of what they measure and the way in which they
evaluate the market environment, business opportunities and competitive pressures
(Abell, 1980; Wind and Mahajan, 1981; Wernerfelt and Montgomery, 1986; Kerin et al.,
1990).
It is against the background of failure to instigate comprehensive implementation
techniques that other approaches have been developed. For example, Shenhar and
Dvir’s (1996) “success dimensions” model is a multi-dimensional concept that measures
effectiveness over four time horizons (the key premise being that to focus on only one
time dimension can be misleading) and focuses on the development and use of “core
competencies”. In noting the limitations of other models in respect of their lack of
consideration for the human resources dimension, Maltz et al. (2003) developed their
 IJCHM dynamic multi-dimensional performance model (DMP). The writers assert that in
17,5 considering five major dimensions (i.e. financial, market, process, people and future),
this integrative model overcomes many of the shortcomings of other frameworks.
In relation to the service industries in particular, during the 1990s a team of
researchers at Harvard University introduced an alternative framework. The Service
Profit Chain (Heskett et al., 1997) assesses the sources of profitability and growth in
378 labour-dominated service firms. Such companies are those where labour is both an
important component of total cost and capable of differentiating the firm’s service from
that of its competitors. The Service Profit Chain’s purpose is to provide managers with
a framework to help them manage by enabling them to focus on (predominantly)
quantifiable measures that lead to financial performance measures. In this respect the
model is similar to the “balanced scorecard” approach to strategy developed by Kaplan
and Norton. However, focusing as it does on the service delivery aspects of
performance, the model is useful but does not represent an holistic approach to
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

managing service based organisations.

The balanced scorecard approach to strategy

Of all the frameworks for performance measurement and strategic implementation, it is
the balanced scorecard (BSC) approach that has gained wide acceptance, particularly in
the United States. A survey of its members by the American Institute of Public
Accountants and Maisel (2001), for example, revealed that 43 per cent were utilising the
technique. This is due perhaps not only to its intrinsic value to businesses, but also
because the concept has been aggressively marketed.
BSC presents a tool for translating an organisation’s mission (embodied in its
strategy) into more tangible measurable goals, actions and performance measures. The
technique is documented in four papers (Kaplan and Norton, 1992, 1993, 1996a, b) and
in greater detail in two books by the same authors (Kaplan and Norton, 1996a, b, c,
2001). The later works shifted the emphasis from a system of performance
measurement towards a system for managing and implementing strategy. Many other
authors, such as Hoffecker and Goldenberg (1994), Lingle and Schiemann (1996),
Kutzman (1997) and Frigo and Krumwiede (2000), have helped to disseminate the
technique’s features. Additionally, a number of case studies documenting early
successful adoption (Vitale et al., 1994; Jensen and Gerr, 1994/5) helped to spread the
BSC approach’s appeal.
BSC was derived following the realisation that no single performance indicator
could fully capture the complexity of an organisation’s performance (Epstein and
Manzoni, 1998). In modern business, increasingly dominated by “services”, where
assets are often intangible and organisations are mindful of the demands of a range of
stakeholder groups, the measurement of competitive performance becomes more
complex. A body of literature, whilst not questioning the importance of financial
measures, nevertheless argued that such measures alone were inadequate in
evaluating a company’s competitive position (Eccles, 1991; Webster, 1992; Stalk et al.,
1992; Kaplan and Norton, 1992). This is particularly true of the service sector, with its
focus on human resources, intangible assets, and difficulties with regard to delivery of
consistent product standards (Sherman, 1984; Schmenner, 1986; Bharadwaj and
Menon, 1993).
 The BSC approach, which can be applied at different levels (total organisation, Balanced
strategic business unit, individual operational units or even to individuals), involves scorecard as
identifying key components of operations, setting goals for them, and finding ways to
measure progress towards their achievement. Traditional financial measures, viewed management tool
as lagging indicators of performance, are balanced with non-financial measures, which
are lead indicators and serve to drive future performance. The measures are not to be
viewed merely as a collection of various metrics (Kaplan and Norton, 2001, p. 11), but 379
instead they are selected to show cause and effect in the implementation of the
company’s mission and organisational strategy. An important preliminary step prior
to choosing the scorecard goals and measures is to “map” the strategy in detail, a
process that Kaplan and Norton (2001, pp. 69-131) describe in some detail.
A typical scorecard would include at least four components (as shown in Figure 1),
for each of which the organisation has to identify a number of goals and measures for
gauging the degree of goal attainment.
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

The balanced scorecard approach in the hotel sector

A diverse range of research documenting the application of BSC in differing industrial
and public service contexts, for example health (Wachtel et al., 1999), education
(Lawrence and Sharma, 2002), banking (Littler et al., 2000), retailing (Thomas et al.,
1999) and local government (Kloot and Martin, 2000), has been reported.
A limited literature focusing on the hotel sector in particular has become established
with regard to strategic measures and implementation in general (e.g. Phillips, 1999)
and focusing on the BSC approach in particular. Although hotels are generally thought
of in a service context, in reality they encapsulate three different types of industrial
activity – rooms, beverage and food – which exhibit differing cost structures and
business orientations (Harris and Mongiello, 2001). The underlying diversity of

Figure 1.
A typical balanced
scorecard
 IJCHM activities and their differing cost structures, it can be argued, call for a diverse set of
17,5 relevant performance measures, which a framework such as BSC can incorporate.
Two American studies (Huckestein and Duboff, 1999; Denton and White, 2000)
report on the experiences of Hilton and Marriott franchisee White Lodging Services in
implementing BSC. In both cases, BSC was found to be a generally useful tool, in that it
brings together previously disparate measures of performance (that abound in this
380 sector) in a coherent model. Thereby it “helps unify all parties [stakeholders]”
(Huckestein and Duboff, 1999). In the Hilton study the authors pointed to the
implementation of BSC as having been successful in reinforcing a coherent business
culture, which is seen as vital in a business with so many separate operating units and
with volatility in its personnel. Other benefits include encouraging managers to focus
on both short-term and long-term measures, rewarding teamwork and allowing best
practices and strategic information to be shared. (Huckestein and Duboff, 1999).
An empirical study of San Diego hoteliers (Doran et al., 2002) identifies both the
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

perceived benefits and potential pitfalls. Doran et al. (2002), whilst noting the reported
successes of Hilton and White Lodging Services, suggest that such success may owe a
great deal to the two organization’s unique circumstances (e.g. histories, strategies,
opportunities and constraints) and suggest that it is imperative that the BSC approach
is modified to take into account individual circumstances. In relation to the
identification of the causal linkages between balanced scorecard components, Doran
et al. (2002) provide a useful illustration of how these might be viewed in a hotel context
(see Figure 2).
In a European context, a study by Brander Brown and McDonnell (1995) is both
dated and limited in its scale, focusing as it does on one property in the South of
England. Notwithstanding these evident limitations, the hotel manager saw obvious
benefits in using the technique. The study identified that a scorecard for an individual
hotel would be likely to vary from a scorecard for a group of hotels, that the measures
would need to be continually reviewed in order to retain their relevance, and that
components might need to be prioritised. In a wider ranging paper, Harris and
Mongiello (2001) examined the range of performance measurement concepts available
to managers (including BSC). The continuing research identified the key indicators that
hotel managers find useful in managing their businesses, and acknowledged BSC’s
value.
Atkinson and Brander Brown (2001), in a study of UK hotels, report that such hotels
predominantly focus on financial performance dimensions, and that they focus on the
short term with little strategic use of the information. Two explanations for such a
short-term financial orientation are offered:
(1) that increasing corporate ownership of hotels leads investors to set demanding
financial targets whilst paying little attention to the processes driving the
results; and
(2) that many senior managers promoted from operational roles consequently tend
to focus on “real-time operational control rather than future-oriented strategic
intent” (Atkinson and Brander Brown, 2001).

Primary research: issues and methodology

Within the literature, there are clearly gaps. It is evident from a broad-based literature
review that while some aspects of BSC implementation have been examined in some
 Balanced
scorecard as
management tool

381
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

Figure 2.
The causal linkages
among balanced scorecard
components in a hotel
context

detail, its application to the hospitality field has not been fully explored, particularly in
a UK context.
The research for this exploratory study focuses on the UK hospitality sector and in
particular the medium to large hotels in the Northeast of England. The primary
research is directed particularly towards the stated objective of evaluating the means
by which a sample of hotels are measuring their performance. In order to produce an
overview of the types of performance measurement taking place in the UK and the
regularity with which the measures are being assessed, the Northeast of England is
used as a representative region since it is diverse, containing both urban and rural
areas, attracts both leisure and business tourists, and has an identifiable population of
both chain and independent hotels. The study targets hotels in the three- and four-star
 IJCHM categories, since these are of a sufficient size to warrant detailed attention being given
17,5 to performance measurement and strategic implementation.
This study is exploratory in nature, utilising questionnaires, and is designed to
obtain a broad understanding of the situation under investigation. The study focuses
on the key figures in the implementation of strategy, i.e. hotel general managers who
were surveyed through a structured postal questionnaire. It is recognised that hotel
382 managers may be unaware of the terminology used in the management literature and
consequently the research focuses on the individual indicators chosen by managers to
ascertain the extent to which they can be viewed as balanced in accordance with the
BSC approach. Only in a final question was the terminology “balanced scorecard”
introduced so as to gauge whether managers are aware of the framework.
The questionnaire is primarily designed to obtain information on the detailed
performance measures being used by the sample of hotels selected and to compare the
responses with the BSC approach. Consequently questionnaire sections mirrored the
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

BSC components (financial, customer, internal business, and innovation and learning
perspectives). The individual questions were derived by carefully assessing the
parameters that have been used in the literature (cited previously) to measure hotel
performance. The questionnaire was sent to all three- and four-star hotels in the
Northumbria Tourist Board (NTB) area, covering the counties of Durham,
Northumberland and Tyne and Wear and the northernmost part of North Yorkshire,
and valid responses from over 42 per cent of those surveyed were received,
representing a satisfactory response rate.

Primary research: discussion of findings

Questionnaires were returned from hotels in all size categories ranging in size from
under 30 rooms to 200 rooms (very large hotels of over 200 rooms are not represented
in the region). Of the respondents, two thirds were from chain hotels and one third from
independently owned hotels, which also tend to be smaller.
With regards to financial performance, Figure 3 shows that most hotels are highly
active in terms of measuring their total operating revenue, in that most measure this
variable on a daily basis. The majority of hotels also actively measure their revenue per
available room (RevPar, a standard industry measure) on a daily or weekly basis, and
most hotels measure their costs relative to budget either weekly or monthly. Other

Figure 3.
Financial performance
 financial measures are used far less frequently. Quite a large number of hotels never Balanced
compare their financial performance with that of local competitors. scorecard as
From the customer perspective, Figure 4 shows that respondents actively consider
customer satisfaction ratings and the number of complaints, with the vast majority management tool
considering these aspects at least monthly. It is somewhat surprising that quite a large
number of hotels never consider important benchmarking measures such as mystery
guest assessments, returning guests and their share of local markets. 383
The internal business perspective shown in Figure 5 shows that the hotels surveyed
are highly active in measuring their response to complaints and service errors with
almost all respondents considering these measures at least monthly. Employee
turnover, a key issue in such a labour-intensive industry, is also measured actively by
respondents but rather less frequently. The payroll and revenue segment is also
obviously actively considered by most hotels.
The innovation and learning perspective, shown in Figure 6, shows that the
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

respondent hotels generally consider these aspects of their business rather less
frequently than the other three dimensions. However, the hotels surveyed claim to
consider the identification of new markets on a regular basis, although given the focus
of such an activity it is difficult to understand how this might be carried out on a daily
or weekly basis, and this provides an example of a set of responses that perhaps
requires some verification. Most hotels also consider staff appraisals, target setting and
improvements but, as might be expected, on a far less regular basis than the other

Figure 4.
Customer perspective

Figure 5.
Internal business
perspective
 IJCHM
17,5

384
Figure 6.
Innovation and learning
perspective

measures. It is perhaps somewhat surprising that the consideration of improvements is

not attributed greater priority, with about 40 per cent of respondents only considering
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

this category quarterly.

The hotel respondents were categorised as to the extent each was using the chosen
measurement indicators, as shown in Table I. Overall the respondents are making very
high use of the performance measures, with over 70 per cent in the very high category
and relatively few making low or very low usage of the performance measures chosen.
This somewhat high level of usage indicates that many of the hotels are currently
operating a performance measurement system, which in terms of the aspects being
measured approximates to the balanced scorecard approach. However few of the hotels
appear to be utilising the BSC approach explicitly and few seem to be operating an
integrated form of performance measurement as advocated by BSC proponents. Of the
low and very low respondents, all were from relatively small independent hotels,
perhaps an indication that owner managers used more informal means of assessment
in order to manage their properties.
A set of questions was asked in order to gauge the level of autonomy in relation to
the choice and utilisation of measures by hotel managers in order to ascertain the
extent to which managers were guided by head office and the strategies being pursued
by their companies. The data gathered indicates that general managers usually have
some input into the choice of appropriate performance measures, in that only in three
cases were the chosen performance measures chosen solely by head office.

Percentage of
hotels
Hotel categorisation Criteria for hotel categorisation surveyed

High Key indicators considered at least monthly and more than

75 per cent of all indicators considered at least quarterly 71
Moderate Key indicators considered at least monthly and more than
Table I. 75 per cent of all indicators considered at least annually 6
Categorisation of Low Over 50 per cent of all indicators considered at least annually 17
respondents according to
their overall usage of Very low Less than 50 per cent of all indicators considered at least
performance indicators annually 6
 Furthermore, the chosen measures appear to be influenced to a large degree by the Balanced
strategies adopted by the companies, in that all but two respondents indicated this was scorecard as
a contributory factor in selecting the appropriate measures. However, further
investigation would be needed to probe the way in which the linkage takes place and management tool
the direction of that linkage, i.e. do the performance measures drive the strategy or vice
versa?
Surprisingly, for a concept that has been promoted largely through the academic 385
literature, a large number of respondents were aware of the BSC concept. Again,
further research would be required in order to determine the extent of the managers’
knowledge and whether the performance measurement system in place approximates
to the BSC approach as outlined by its authors.
It is recognised that the research which was carried out is limited by three factors.
First, it is limited in scale, in that responses were received from a limited sample.
Second, it is limited in terms of its sample, in that it focuses solely on three- and
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

four-star properties in Northeast England. Third, it is limited in relation to the research

methodology employed, in that the questionnaire approach adopted is capable of
providing broad themes, but further research is required in order to verify the findings
and produce more detailed findings.
Notwithstanding these limitations, it can be argued that this exploratory research
has produced some useful and interesting findings. Previous research in this field has
indicated that hotels are using a wide variety of performance measures (Harris and
Mongiello, 2001), but that there is an over-concentration on short-term financial
measures of performance (Atkinson and Brander Brown, 2001). The research carried
out indicates, contrary to the findings of Atkinson and Brander Brown (2001), that the
hotels surveyed are in fact using a wide variety of performance measures and that they
are taken from all four of the categories identified by Kaplan and Norton (2001).
Furthermore, using the categorisation developed by the author, 71 per cent of
respondents are making very high use of the chosen performance measures. The
understanding by managers of the need to use a balanced approach to performance
measurement so that different stakeholders and their interests are considered appears
to be corroborated by the fact that many respondents are aware of the BSC approach.
The findings seem to indicate that there is a relationship between both the size of
hotel and whether it is independent and the level of activity with regards to
performance measurement, although this was not tested statistically owing to the
limitations in the sample size. Larger and chain hotels appear to be more actively
measuring their performance in a formal way, utilising a range of variables. Clearly the
findings also show that there is a link between the strategy of the companies concerned
and the way in which performance is measured, but again further research would be
necessary in order to gain a fuller understanding of how this might work in detail.

Practical issues and implications for hotel managers

This paper has assessed the BSC approach through a review of the available literature
and through primary research carried out in Northeast England. In this section the
practical issues and implications for hotel managers in adopting the approach are
outlined. The BSC approach is not without its critics. Nørreklit (2000), for example,
alleges that the concept is based on persuasive rhetoric rather than convincing theory
based on empirical underpinnings. Notwithstanding the criticisms, this paper has
 IJCHM reported on several studies, which have indicated the practical value of the BSC
17,5 approach in a range of contextual settings including hotels. The research carried out
lends some support to the notion that a range of performance measures are necessary
and that they are most useful when applied in a coordinated way.
Three American-based studies of BSC application to the hotel industry (Huckestein
and Duboff, 1999; Denton and White, 2000; Doran et al., 2002) all point to benefits
386 derived but also to potential pitfalls to be avoided. In their study of Hilton Inc.,
Huckestein and Duboff (1999) conclude that the benefits far outweigh the time and
resources required to implement the value creating process, while Denton and White
(2000) point to improved performance at White Lodging Services during the first two
years of using the BSC rubric. The studies report a number of benefits, which include:
.
encouraging managers to focus on both long-term and short-term measures of
success, because managers become more aware of the implications of their
actions;
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

.
rewarding teamwork, since the hotel property is assessed as an overall entity;
.
making performance appraisals more objective, in that they are linked to BSC
outcomes;
.
explicit sharing of best practice, giving consistent and easily interpreted
summary information when the BSC is adopted in a unified way across a chain of
hotels;
.
allowing strategy information to be disseminated throughout the organisation;
and
.
enabling negative trends to be identified by owners and senior managers in their
early stages, long before financial performance deteriorates.

However BSC adoption can be a lengthy and complex process, requiring commitment
of time and resources. Furthermore, in that it requires the mapping and alignment of
strategy with performance measures, it cannot be viewed as an “off the shelf” solution
(Doran et al., 2002). Thus, BSC requires tailoring to each set of organisational
circumstances and cannot be viewed as a one-off event but rather as a continuing
process that requires monitoring, continuous learning, feedback and adjustment. As
Huckestein and Duboff (1999) state, “one should not underestimate the challenges in
moving a company from static, backward-looking measurements to a comprehensive
business design that integrates a forward-looking approach”.
At each stage of the development, implementation and evaluation of the framework
potential difficulties need to be overcome. Key potential difficulties include:
.
Mistaking data for useable information – A balance needs to be achieved in
having enough detail to be actionable, but only enough to be meaningful and that
can be easily interpreted by managers (Lingle and Schiemann, 1996).
.
Failing to establish causal linkages between scorecard components – Kaplan and
Norton (2001, p. 69) argue that each measure of a balanced scorecard becomes
embedded in a chain of cause-and-effect logic that connects the desired strategic
outcomes with the drivers that will lead to the successful achievement of these
outcomes. Thus, in this way the mapping of the BSC tells the story of the
strategy in a way that is meaningful to stakeholders. For example, if employees’
 morale is improved, then guests will receive better service. More satisfied guests Balanced
will yield increased bookings, repeat customers, etc. (Doran et al., 2002). scorecard as
.
Failing to get the support of employees for the management system – It is management tool
important that an understanding of strategy cascades down through an
organisation so that all employees are aware of strategic intent and the impact of
operational activities upon its delivery. Such an understanding is more easily
conveyed using a tool such as BSC, which clearly establishes causal links. Hilton 387
Hotels emphasise the strategy to all employees through customised orientation
presentations at all properties, which it reinforces through all employee
communications (Huckestein and Duboff, 1999). Doran et al. (2002) emphasise the
need for managers who fully understand the implementation of a BSC approach
and who can act as “champions” of the changes it entails.

Conclusions
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

This study has considered BSC in the context of the strategic management literature.
In reviewing this literature it is clear that the literature relating to the more detailed
implementation issues of strategy (which is where BSC can be sited) is relatively
scarce. Furthermore, it can be concluded that the strategy literature relating to travel
and tourism and the hospitality sectors is also somewhat weakly developed. However,
a limited literature applying BSC in a hospitality context has developed.
This literature reports on the usefulness of a BSC approach, albeit modified to suit
individual circumstances, but also points to potential pitfalls in its implementation
such as the failure to draw upon employee support. The primary research conducted in
Northeast England indicates that a wide variety of measures are currently being used
and that many hoteliers are using measures from all four of the category groupings
identified by Kaplan and Norton, not just short-term financial measures. However,
further research is necessary to understand the relationship between the measures and
the strategy and vision of the companies concerned and to understand whether
managers fully understand the causal linkages inherent in BSC.
Finally, an integrated model of hotel management that takes into an account other
frameworks such as the underlying critical success factors, which require
measurement, a relevant benchmarking system versus competitors and an
understanding of the service profit chain, awaits development.

References
Abell, D.F. (1980), Defining the Business: The Starting-Point of Strategic Planning, Prentice-Hall,
Englewood Cliffs, NJ.
Atkinson, H. and Brander Brown, J. (2001), “Rethinking performance measures: assessing
progress in UK hotels”, International Journal of Contemporary Hospitality Management,
Vol. 13 No. 3, pp. 128-35.
Bettis, R.A. and Hall, W.K. (1982), “Diversification strategy, accounting determined risk and
accounting determined return”, Academy of Management Journal, Vol. 25, June, pp. 254-64.
Bharadwaj, S.G. and Menon, A. (1993), “Determinants of success in service industries”, Journal of
Services Marketing, Vol. 7 No. 4, pp. 19-39.
Brander Brown, J. and McDonnell, B. (1995), “The balanced scorecard: short-term guest or
long-term resident?”, International Journal of Contemporary Hospitality Management,
Vol. 7 Nos 2/3, pp. 7-11.
 IJCHM Brotherton, B. and Adler, G. (1999), “An integrative approach to enhancing customer value and
corporate performance in the international hotel industry”, International Journal of
17,5 Hospitality Management, Vol. 18, pp. 261-72.
Candido, C.J.F. and Morris, D.S. (2001), “The implications of service quality gaps for strategy
implementation”, Total Quality Management, Vol. 12 Nos 7/8, pp. 825-33.
Chakravarthy, B.S. (1986), “Measuring strategic performance”, Strategic Management Journal,
388 Vol. 7, pp. 437-58.
Coe, B.J. (1981), “Use of strategic planning concepts by marketers”, Proceedings of the Annual
Marketing Educator’s Conference, American Marketing Association, Chicago, IL, pp. 13-16.
Denton, G.A. and White, B. (2000), “Implementing a balanced scorecard approach to managing
hotel operations: the case of White Lodging Services”, Cornell Hotel and Restaurant
Administration Quarterly, February, pp. 16-26.
Doran, M.S., Haddad, K. and Chow, C.W. (2002), “Maximising the success of balanced scorecard
implementation in the hospitality industry”, International Journal of Hospitality and
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

Tourism Administration, Vol. 3 No. 3, pp. 33-58.

Eccles, R.G. (1991), “The performance measurement manifesto”, Harvard Business Review,
Vol. 69, January/February, pp. 131-7.
Epstein, M. and Manzoni, J.F. (1998), “Implementing corporate strategy: from tableaux de bord to
balanced scorecards”, European Management Journal, Vol. 16 No. 2, pp. 190-203.
Fraguhar, C. and Shapiro, S.J. (1983), Strategic Business Planning in Canada, The Conference
Board of Canada, Ottawa.
Frigo, M. and Krumwiede, K.R. (2000), “The balanced scorecard: a winning performance
measurement system”, Strategic Finance, Vol. 81 No. 7, pp. 50-4.
Hamermesh, R.G. (1986), “Making planning strategic”, Harvard Business Review, Vol. 64,
July/August, pp. 115-19.
Hapeslagh, P. (1982), “Portfolio planning uses and limits”, Harvard Business Review, Vol. 60,
January/February, pp. 58-62.
Harris, P.J. and Mongiello, M. (2001), “Key performance indicators in European hotel properties:
general managers’ choices and company profiles”, International Journal of Contemporary
Hospitality Management, Vol. 13 No. 3, pp. 120-7.
Heskett, J.L., Sasser, W.E. and Schlesinger, L.A. (1997), The Service Profit Chain, The Free Press,
New York, NY.
Hoffecker, J. and Goldenberg, C. (1994), “Using the balanced scorecard to develop company-wide
performance measures”, Journal of Cost Management, Vol. 8 No. 3, pp. 5-17.
Huckestein, D. and Duboff, R. (1999), “Hilton Hotels: a comprehensive approach to delivering
value for all stakeholders”, Cornell Hotel and Restaurant Administration Quarterly,
August, pp. 28-38.
Jensen, B. and Gerr, G. (1994/5), “Seismic shifts in HR management: a case study in mapping
radical change at Pepsi”, Employment Relations Today, pp. 407-17.
Kaplan, R.S. and Norton, D.P. (1992), “The balanced scorecard – measures that drive
performance”, Harvard Business Review, January/February, pp. 1-79.
Kaplan, R.S. and Norton, D.P. (1993), “Putting the balanced scorecard to work”, Harvard Business
Review, September/October, pp. 134-47.
Kaplan, R.S. and Norton, D.P. (1996a), “Using the balanced scorecard as a strategic management
system”, Harvard Business Review, Vol. 74, January/February, pp. 75-85.
 Kaplan, R.S. and Norton, D.P. (1996b), “Linking the balanced scorecard to strategy”, California Balanced
Management Review, Vol. 39 No. 1, pp. 53-79.
scorecard as
Kaplan, R.S. and Norton, D.P. (1996c), The Balanced Scorecard, Harvard Business School Press,
Boston, MA. management tool
Kaplan, R.S. and Norton, D.P. (2001), The Strategy-Focused Organisation, Harvard Business
School Press, Boston, MA.
Kerin, R., Mahajan, V. and Varadarjan, P.R. (1990), Contemporary Perspectives on Strategic 389
Market Planning, Allyn & Bacon, Needham Heights, MA.
Kloot, L. and Martin, J. (2000), “Strategic performance management: a balanced approach to
performance management issues in local government”, Management Accounting Research,
Vol. 11 No. 2, pp. 231-51.
Kutzman, J. (1997), “Is your company off course? Now you can find out why”, Fortune, Vol. 135
No. 3, pp. 128-30.
Lawrence, S. and Sharma, U. (2002), “Commodification of education and academic labour – using
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

the balanced scorecard in a university setting”, Critical Perspectives on Accounting, Vol. 13

Nos 5/6, pp. 661-77.
Lingle, J.H. and Schiemann, W.A. (1996), “From balanced scorecard to strategic gauges:
is measurement worth it?”, Management Review, Vol. 5 No. 3, pp. 56-61.
Littler, K., Aisthorpe, P., Hudson, R. and Keasey, K. (2000), “A new approach to linking strategy
formulation and strategy implementation: an example from the UK banking sector”,
International Journal of Information Management, Vol. 20 No. 6, pp. 411-28.
Lorange, P. (1998), “Strategy implementation: the new realities”, Long Range Planning, Vol. 31
No. 1, pp. 18-29.
Maisel, L.S. (2001), Performance Measurement Practices Survey, American Institute of Public
Accountants, New York, NY.
Maltz, A.C., Shenhar, A.J. and Reilly, R.R. (2003), “Beyond the balanced scorecard: refining the
search for organisational success measures”, Long Range Planning, Vol. 36, pp. 187-204.
Mockler, R.J. (1995), “Strategic management: the beginning of a new era”, in Hussey, D.E. (Ed.),
Rethinking Strategic Management, Wiley, New York, NY, pp. 1-41.
Morris, D.S. and Haigh, R.H. (1996), “Overcoming the barriers to TQM”, in Kanji, G.K. (Ed.), Total
Quality Management in Action, Chapman & Hall, London, pp. 92-101.
Nørreklit, H. (2000), “The balance on the balanced scorecard: a critical analysis of some of its
assumptions”, Management Accounting Research, Vol. 11 No. 1, pp. 65-88.
Peters, T. and Waterman, R.H. (1982), In Search of Excellence: Lessons from America’s Best-Run
Companies, Harper & Row, New York, NY.
Phillips, P.A. (1999), “Performance measurement systems and hotels: a new conceptual
framework”, International Journal of Hospitality Management, Vol. 18, pp. 171-82.
Schmenner, R.W. (1986), “How can service businesses survive and prospoer”, Sloan Management
Review, Vol. 27, Spring, pp. 21-32.
Shenhar, A.J. and Dvir, D. (1996), “Long term success dimensions in technology-based
organisations”, Handbook of Technology Management, chapter 32, McGraw-Hill,
New York, NY.
Sherman, H.D. (1984), “Improving the productivity of service businesses”, Sloan Management
Review, Vol. 25 No. 3, pp. 11-23.
Stalk, G., Evans, P. and Shulman, L.E. (1992), “Competing on capabilities: the new rules of
corporate strategy”, Harvard Business Review, Vol. 70, March/April, pp. 57-69.
 IJCHM Thomas, R., Gable, M. and Dickinson, R. (1999), “An application of the balanced scorecard in
retailing”, The International Review of Retail, Distribution and Consumer Research, Vol. 9
17,5 No. 1, pp. 41-67.
Vitale, M., Mavrinae, S.C. and Hauser, M. (1994), “DHC: the Chemical Division’s balanced
scorecard”, Planning Review, Vol. 17, pp. 44-5.
Wachtel, T.L., Hartford, C.E. and Hughes, J.A. (1999), “Building a balanced scorecard for a burns
390 center”, Burns, Vol. 25 No. 5, pp. 431-7.
Webster, F.E. (1992), “The changing role of marketing in the corporation”, Journal of Marketing,
Vol. 56, October, pp. 1-17.
Wernerfelt, B. and Montgomery, C. (1986), “What is an attractive industry?”, Management
Science, Vol. 32, October, pp. 1223-30.
Wind, Y.J. and Mahajan, V.J. (1981), “Designing product and business portfolios”, Harvard
Business Review, Vol. 59, January/February, pp. 155-65.
Downloaded by Teesside University At 04:15 31 March 2016 (PT)
 This article has been cited by:

1. Said Elbanna, Riyad Eid, Hany Kamel. 2015. Measuring hotel performance using the balanced scorecard:
A theoretical construct development and its empirical validation. International Journal of Hospitality
Management 51, 105-114. [CrossRef]
2. Anoop Patiar, Lokman Mia. 2015. Drivers of Hotel Departments' Performance: Evidence From Australia.
Journal of Human Resources in Hospitality & Tourism 14, 316-337. [CrossRef]
3. Haim Hilman College of Business, Universiti Utara Malaysia, Sintok, Malaysia Narentheren Kaliappen
Othman Yeop Abdullah, Graduate School of Business, Universiti Utara Malaysia, Sintok, Malaysia .
2015. Innovation strategies and performance: are they truly linked?. World Journal of Entrepreneurship,
Management and Sustainable Development 11:1, 48-63. [Abstract] [Full Text] [PDF]
4. Figen Türüdüoğlu, Nilüfer Suner, Gülçin Yıldırım. 2014. Determination of Goals under Four Perspectives
of Balanced Scorecards and Linkages between the Perspectives: A Survey on Luxury Summer Hotels in
Turkey. Procedia - Social and Behavioral Sciences 164, 372-377. [CrossRef]
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

5. Falconer Mitchell Hanne Nørreklit Oana Alexandra Albertsen Department of Economics and Business,
School of Business and Social Sciences, Aarhus University, Aarhus, Denmark Rainer Lueg Department of
Economics and Business, School of Business and Social Sciences, Aarhus University, Aarhus, Denmark .
2014. The balanced scorecard’s missing link to compensation. Journal of Accounting & Organizational
Change 10:4, 431-465. [Abstract] [Full Text] [PDF]
6. Devkant Kala, Satish Chandra Bagri. 2014. Balanced Scorecard Usage and Performance of Hotels: A Study
from the Tourist State of Uttarakhand, India. Asia-Pacific Journal of Innovation in Hospitality and Tourism
(APJIHT) 3. . [CrossRef]
7. Guixia Wang Institute of Policy and Management, Chinese Academy of Sciences, Beijing, People’s
Republic of China Jinbo Wan Institute of Policy and Management, Chinese Academy of Sciences, Beijing,
People’s Republic of China Lanxiang Zhao Institute of Policy and Management, Chinese Academy of
Sciences, Beijing, People’s Republic of China . 2014. Strategy map for Chinese science parks with KPIs
of BSC. Journal of Science and Technology Policy Management 5:2, 82-105. [Abstract] [Full Text] [PDF]
8. Shu-Chuan Liu, Chung-Hao ChenBalanced Scorecard in Hospitality 667-672. [CrossRef]
9. Marcella Ehbauer, Ronja Gresel. 2013. Measuring and managing service performance of luxury stores:
development of a balanced scorecard. The Service Industries Journal 33, 337-351. [CrossRef]
10. Hung-Yi Wu. 2012. Constructing a strategy map for banking institutions with key performance indicators
of the balanced scorecard. Evaluation and Program Planning 35, 303-320. [CrossRef]
11. David Solnet. 2012. Service Management in Hospitality Education: Review and Reflection. Journal of
Hospitality Marketing & Management 21, 184-214. [CrossRef]
12. Javad Jassbi, Farshid Mohamadnejad, Hossein Nasrollahzadeh. 2011. A Fuzzy DEMATEL framework for
modeling cause and effect relationships of strategy map. Expert Systems with Applications 38, 5967-5973.
[CrossRef]
13. Krystin ZiganJacobs University, Campusring, Bremen, Germany Dia ZeglatAL‐Hussien Bin Talal
University, Ma'an, Jordan. 2010. Intangible resources in performance measurement systems of the hotel
industry. Facilities 28:13/14, 597-610. [Abstract] [Full Text] [PDF]
14. Ruggero SainaghiResearcher at the Università IULM, Institute of Economics and Marketing, Milan,
Italy. 2010. A meta‐analysis of hotel performance. Continental or worldwide style?. Tourism Review 65:3,
46-69. [Abstract] [Full Text] [PDF]
 15. Susita AsreeDepartment of Management, Marketing and Business Administration, College of Business
and Public Affairs, Murray State University, Murray, Kentucky, USA Mohamed ZainCollege of Business
and Economics, Qatar University, Doha, Qatar Mohd Rizal RazalliCollege of Business, Northern
University of Malaysia, Kedah, Malaysia. 2010. Influence of leadership competency and organizational
culture on responsiveness and performance of firms. International Journal of Contemporary Hospitality
Management 22:4, 500-516. [Abstract] [Full Text] [PDF]
16. Lisa Hyunjung Kim, David Njite. 2009. Evaluation of Web Site Performance: Korean Convention Centers.
International Journal of Hospitality & Tourism Administration 10, 232-252. [CrossRef]
17. Anoop Patiar, Lokman Mia. 2009. Transformational leadership style, market competition and
departmental performance: Evidence from luxury hotels in Australia. International Journal of Hospitality
Management 28, 254-262. [CrossRef]
18. Leo Huang. 2008. Strategic orientation and performance measurement model in Taiwan's travel agencies.
The Service Industries Journal 28, 1357-1383. [CrossRef]
19. Ruth McPhail, Carmel Herington, Christopher Guilding. 2008. Human resource managers’ perceptions
Downloaded by Teesside University At 04:15 31 March 2016 (PT)

of the applications and merit of the balanced scorecard in hotels. International Journal of Hospitality
Management 27, 623-631. [CrossRef]
20. Einar Marnburg. 2008. Editorial: Strategy in Hospitality Management. Scandinavian Journal of Hospitality
and Tourism 8, 189-194. [CrossRef]
21. Andrew LockwoodOperational performance 209-235. [CrossRef]
22. Inês CruzISCTE Business School, Lisbon, Portugal. 2007. How might hospitality organizations optimize
their performance measurement systems?. International Journal of Contemporary Hospitality Management
19:7, 574-588. [Abstract] [Full Text] [PDF]
23. Ali AssiriSchool of Management, The European Centre for TQM, University of Bradford, Bradford, UK
Mohammed ZairiBradford School of Management, The European Centre for TQM, Bradford, UK Riyad
EidWolverhampton Business School, Wolverhampton University, Wolverhampton, UK. 2006. How to
profit from the balanced scorecard. Industrial Management & Data Systems 106:7, 937-952. [Abstract]
[Full Text] [PDF]

View publication stats