Influence of Balanced Score Card On Performance of Dairy Firms in Kiambu County -Kenya

Abstract

The aim of the study was to explore the influence of selected balanced scorecard perspectives (customer, internal business process, financial and innovation and learning perspectives) on the performance of dairy firms in Kiambu County, Kenya. Performance of dairy firms is measured by growth and profitability if vital in creating economic opportunities for farmers and economic growth. Traditionally, financial performance measures have been applied in determining the performance of firms. The financial measurement system is inadequate since it fails to provide a comprehensive and holistic view of an organization’s performance, leading to the development and use of a balanced scorecard that also paid attention to the nonfinancial strategic objectives. The objectives for the study were to assess the influence of customer satisfaction, innovation, financial and internal business process on the performance of dairy firms in Kiambu County. From the reviewed literature, the application of balanced scorecard is the formulation of strategic objectives and as a performance measure system has been linked to positive organization performance. However, gaps in methodology and insufficient empirical studies on application of balanced scorecard in the dairy firms were established, hence, the justification of this study. This study applied balanced scorecard theory, technology adoption theory, resource-based theory, and value-percept disparity theory. The researcher used a descriptive research design, a quantitative research method, and conducted correlation and regression analysis. The target population were 11 dairy firms in Kiambu County where a sample of 84 managers were obtained through simple random sampling techniques. The regression findings established a strong and positive correlation between balance scorecard perspectives and dairy firms’ performance. A strong and positive correlation between innovation and learning perspectives and performance was established. Findings were similar for customer perspectives, internal business processes, and financial perspectives, indicating how the implementation of the strategic objectives of each of the balanced scorecard perspectives contributes to the general performance of the dairy firms in Kiambu county. Proposed recommendations included more investments in emerging and relevant technologies, diversification of dairy products and market expansion, and better debt management. Future researchers should improve the study through a representative sample by focusing on more industries.