The perceived impacts of the implementation of Balance Scorecard on the financial efficiency of PetroVietnam Power Corporation

Abstract

This research studied the perceived impacts of the implementation of Balanced Scorecard on PetroVietnam Power Corporation's financial efficiency. More specifically, it explores the current situation of performance measurement of PertroVietnam Power Corporation (abbreviated as PV Power) and investigates the perception of PV Power's top and middle managers about the impacts of the Balanced Scorecard implementation on PV Power's financial efficiency. This research applied a qualitative research method such as documentary analysis and in-depth interviews within top and middle managers of PetroVietnam Power Corporation. The findings from documentary analysis and interviews show problems of PV Power's performance measurement such as information in business production plans and performance reports are unsystematic and not regularly. In addition, the findings from interviews illustrate PV Power's expectation of a comprehensive performance measurement system. Final, the finding from interviews indicate the perception of over 52 percent of the respondents on the interaction between non-financial and financial indicators illustrating the prediction that setting up non-financial and financial indicators interactively and in cause-and-effect linkage for translating strategic objectives into actions and measuring performance would lead to the improvement of financial efficiency of PV Power. This finding can be considered as the perception illustrating prediction that the implementation of Balanced Scorecard in PV Power would lead to the improvement of PV Power's financial efficiency because of the following reasons. First, non-financial and financial indicators provided in the interviews were designed in the manner of Balanced Scorecard. Second, the perception of PV Power's managers on setting up non-financial and financial indicators interactively and in a cause-and-effect linkage can be considered that this setting lies in critical steps to build a Balanced Scorecard. The last reason is that the finding gathered from PV Power's perception on the interaction between non-financial and financial indicators is similar to the results provided by researchers implemented studies on Balanced Scorecard such as Davis and Albright (2004), Othman (2006), and (Ong et al., 2010).

Keywords: Balanced Scorecard, performance measurement, PV Power