BSC Implementation for the Improvement of Performance Management and Competitiveness for Korean Small and Medium Companies

Ever since BSC(Balanced Scorecard) was introduced by Professor Kaplan and Dr. Norton, it has been widely adopted and used by lots of (relatively large size) foreign and domestic companies as a strategic performance management system which ecourages effective and well-coordinated performance. The most important aspect of BSC can be characterized as the use of balanced set of performance measures, which is also important for SME(small and medium enterprise)s. This study is based on the curiosity if BSC can be applicable to Korean SMEs and if Korean SMEs are adopting BSC, what are the major reasons to adopt BSC as well as typical weaknesses in terms of BSC adpotion and implemention. In order to find the answers to the above questions, in-depth literature review of existing foreign and domestic papers covering the issues of performance management for SMEs and the possibility of BSC adoption as well as some critical insights to minimize the probable future trial and error by BSC adoptors was performed. And interviews with CEO of SME and BSC consultants were done in order to figure out what are the major characteristics of SMEs' performance measurement and management system. Major findings of this study can be summarized as follows; First, unlike expectation, more than 40 SMEs adopted BSC and the size of the company was very diverse. Second, prime purposes of BSC were very similar with well-known BSC advantages. Third, most of the companies adopted BSC by so-called management fashion rather from top management leadership motivated by financial assistence from government. Fourth, they showed common limitations including that they pursue too many things at a short project period and use too many KPIs while they depend too much upon consulting firms.