Balanced Scorecard for Educational Institutions
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Education has a vital role in shaping the nation, thus educational institutions attempt to prepare students for productive lives after college and expressively capture their attention in the process of social transformation for its internal and external audience. Nowadays, they are not limited in promoting educational standards and policies but exposed also with rapid growth of information technology and with the emerging global trends for learning processes and hence performance assessment becomes essential (Karpagam and Suganthi, 2010; Nayerin, Mashhadi, and Mohajeri, 2008).
For educational institution whether for profit or non-profit, ensuring the maintenance and enhancement of the quality of education within an institution is the major concern. The financial measures are not the most relevant indicators of whether the educational institution is delivering on the rationale for its existence (Norton and Kaplan, 1992; Chang and Chow, 1999). A research published by Karpagam and Suganthi (2010) highlights the work conducted by A. C. Stewart and J. Carpenter (2001): it states that in translating BSC to the complex world of academia is a challenge because of skepticism in measuring its performance quantitatively. Stewart et al. mentioned that accountability of an educational institution has become a challenging concern and have been required to provide performance indicators as evidence of their value. The BCS concept allows the institution to balanced set of measures and to look at other performance measures aside financial performance. The original BSC by Norton and Kaplan was organized in four perspectives, financial, internal business processes, innovation and learning and, customer perspective.
BSC has emerged since 1990 and has proven the success of applying it in educational institutions. As stated, a tradition of using BSC was established in the Anglo-Saxon Universities and successful examples in this idea are the Universities from the USA, Australia, Finland and Spain who adopted the approach to assess its academic program and planning process (Nistor, 2009). However failures in using BSC is not impossible due to some barriers present like failure to align perspectives (Barndt, McGee, and Cataldo, 2011), but more often it can be used successfully as stated by Joel Zimmerman (2009) by a comprehensive selection of what they really want to measure, and leading indicators of how to measure it. One of the features of a good BSC is to have emphasis on the most critical performance indicators that will drive the desired impacts or the other perspective to balance institutional effectiveness (Stewart and Carpenter, 2001; Cabrera, 2010). With these concepts, this study was conceived to evaluate the four perspectives in Kaplan and Norton BSC and determine the most critical performance indicators to provide linkages from cause to effect among the perspectives and provides success in application of BSC for educational institutions in