Management Barrier

Lack of feedback on how the strategy is being implemented and whether is working within the organization is major cause of failure of the balanced scorecard. It must be noted that many management systems provide feedback on operational aspect of organizations by tracking their financial measures. The balanced scorecard demands that management understand the under-lying value creating or destroying mechanisms in the organization. Closely associated with this challenge is commitment from the senior executive, which is paramount to the success of the balanced scorecard implementation. Effective implementation of the BSC requires on-going commitment and organizational culture change driven by the leadership of the organization.

Culture can be described as a set of values, beliefs, assumptions, attitude and behaviors shared by a group of people. It is often said to be a set of unwritten rules for working together established by a groups behavior. Therefore the organizations culture consists of all of the experiences that each employee bring to the organization. It is influenced by the organizations leadership team because of their role in decision making and strategic direction. Inconsistencies between their behavior and values can negatively affect the implementation of the balanced scorecard. Example , if the organization promotes teamwork then employees may appear to agreed to the premise but will continue to function differently if the reward and recognition system is geared towards individual effort. The leadership style of the organization must therefore adopt a top down and upward influence approach to remove management barrier and establish a successful implementation of the balanced scorecard.

Human Resource Barrier

Strategy may not be linked to the organization, departmental or individual goals. The Balanced scorecard is a powerful tool that allows organizations to distinguish their value creating activities through critical success factors. The strategy of the organization must be expressed in measurable action over a short to long term basis. It must therefore ensure that all employees understand how their day to day activities affects the organizations ability to achieve its stated goals. A feasible balanced scorecard can only exist in a culture of communication and participation. A participative environment with a flow of communication between executives, managers and employees will allow for a greater success for implementing the balanced scorecard. The use of feedback and group consultation provided by a cross section of representatives of all employees concerning the methods of accomplishing the organizations strategy engenders commitment and buy-in. It also improves the alignment of all organizational participants to the strategy.