Balanced Scorecard In Hsbc Bank Accounting

Chapter 1

In the past decennaries, many organisations were confronting intensive force per unit areas for alterations in schemes and constructions without a proper human resource direction and public presentation direction theoretical account ( Weng, 2011 ) . It has been a challenge to many directors to mensurate and measure their human capital with an increasing and invariably altering volume of employees across the organisation at different degrees every bit good as across different geographic locations with high consistence and criterions. Therefore, it is important that organisations have a strategic direction tool. Much argument has been taken to happen the most effectual manner of mensurating non merely a company ‘s fiscal public presentation but besides how the company satisfies its clients and employees ( Kocakulah and Austill, 2007 ) . Then in 1992, Kaplan and Norton introduced a BSC theoretical account. Their construct of BSC has opened a new field in the literature of direction control ( Franco and Bourne, 2003 ) . Since so, BSC has been an interesting subject that many academic writers choose to compose. The grounds why the research worker is interested to compose about BSC are as following.

First, it is indispensable that public presentation measuring be of great significance to an organisation, playing as a tool in conveying the company ‘s schemes to individual ‘s aims ( Smith and Kim, 2005 ) . Drucker ( 1954 ) besides highlighted that all employees, from a large foreman to a junior clerk, should hold personal public presentation aims that aligns strongly to the company ‘s scheme. Therefore, the application of BSC truly helps organisations to picture such aims obviously. Harmonizing to Kocakulah and Austill ( 2007 ) , when structural alterations and occupation specifications become more complex, it is required to develop a methodological analysis and expression that can aline the organisational schemes and chief rules with public presentation measuring and direction indexs. Kaplan and Norton ( 1992, cited in Kaplan, 2010 ) recognized that any comprehensive measuring and direction system has to associate operational public presentation betterments to client and fiscal public presentation.

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Second, BSC was presented as the most practical and comprehensive public presentation measuring theoretical account and has so become a popular strategic tool amongst directors all over the universe ( Sanayei et al. , 2011 ) . In recent old ages, the BSC has been a comprehensive theoretical account when looking at direction issues for fiscal and non-financial intents and has been really popular as it attracts a batch of attending ( Norreklit, 2000 ) . It has been widely used by many companies and has gained worldwide acceptance as a utile tool for direction. From 1992 to 2000, more than 200 companies adopted the BSC method ( Kaplan and Norton, 2001 cited in Kocakulah and Austill, 2007 ) . In 2001, David Norton estimated that about 50 per centum of big organisations in the United States were utilizing the BSC, approximately 45 per centum in Europe ; and about a 3rd of the big organisations in Australia used the BSC ( Weber et al. , 2001 cited in Kocakulah and Austill, 2007 ) . Another recent survey by Bain & A ; Company indicated that 57 per centum of houses worldwide use the balanced scorecard, including 75 per centum of big houses and 64 per centum of houses in North America ( Rigby and Bilodeau, 2005 ) . The Harvard Business Review in 1997 listed it as one of the 75 most influential thoughts of the twentieth century ( Bible et al. , 2006 ) .

Apparently, BSCA has become the taking strategic direction system of the twenty-first century. Organizations use the scorecard to make an wholly new public presentation direction model that puts scheme at the Centre of cardinal direction procedures and systems ( Kaplan and Norton, 2001 ) .

Third, BSC has been chosen by many fiscal and banking establishments as a key to accomplishing a successful executing of their strategic programs ( Frigo et al. , 2000 ) , whereas Aranda and Arellano ( 2010 ) stated that it is for strategic development and public presentation measuring. As a consequence, BSC was chosen by HSBC Bank to set into usage in its early phase of get downing concern in Vietnam. Throughout all these phases, BSC has ever been used at all degrees as ( I ) a strategic tool to link organisational ends with 1500-employees ‘ marks and ( two ) a standard public presentation measuring system to drive single public presentation, evaluate their accomplishments and create values ( HSBC Vietnam, 2011 ) .

HSBC Bank, a member of HSBC Holdings Group, is one of the universe ‘s largest fiscal establishments and the biggest foreign bank in Vietnam. It established the first full-service subdivision in Ho Chi Minh City in 1995 and so expanded to 17 subdivisions and offices across the state. It strategically focuses on Premier Centers with a intent of presenting first international services to high-profile clients. Presently there are one Premier Centre in Hanoi ( the North ) and one in Ho Chi Minh City ( the South ) ( HSBC Vietnam, 2012 ) functioning a figure of 6,000 Premier clients.

Forth, the function of BSC in HSBC has been strongly recognized by either employees or directors at all degrees. At Group and concern degree, it supports the execution of the concern scheme, guaranting that all facets that contribute to its success are taken into history. At a squad degree, it helps directors align their aims with those of the concern and concentrate their attempts and resources on what is most relevant. Individually, it helps an employee understand how her/his work links with and affects the success of the organisation ( HSBC Vietnam, 2011 ) .

The effects of public presentation measuring and direction at HSBC Vietnam have been evaluated through studies conducted bank-wide to roll up employees ‘ feedback and response. Such studies so supported direction ‘s strategic analysis and betterment program ( HSBC Vietnam, 2011 ) . However, there has been small empirical research into whether the balanced scorecard really works in pattern ( Neely, 2008 ) . Furthermore, as pointed out by Hung-Yi Wu ( 2012 ) , most of the BSC-related surveies have focused chiefly on public presentation steps instead than the causal relationships between cardinal public presentation indexs for the intent of scheme execution. This is the first clip a research is conducted in HSBC ( Vietnam ) Ltd. at a more focussed degree with specific properties straight related to single BSC ‘s positions and possible relationships every bit good as their impacts. Consequently, the writer chooses to analyze on the below subject:



1.2. Significance OF STUDY

The initial intent of this survey is to derive farther apprehension of BSC and its function as a public presentation direction tool in an organisation. Many surveies by Gates ( 1999 ) , Lingle and Schiemann ( 1996 ) suggested that organisations managed through ‘balanced ‘ public presentation measuring systems perform better than those that are non. Therefore, the research can assist calculate out positive consequences on a specific organisation utilizing the scorecard to back up those thoughts.

Besides, it will function as a usher to concern scheme planning. Harmonizing to Davis and Albright ( 2004 ) and Littler et Al. ( 2000 ) , Bankss can salvage an tremendous sum of clip and money if they understand which steps, fiscal or non-financial, are best suited to their demands. As such, it is expected that the survey can bespeak whether the current BSC applied in HSBC is ideal in a manner that an appropriate mix of public presentation drivers and result steps has been tailored to the concern unit ‘s scheme ( Frigo et al. , 2000 ) .

In add-on, the survey reemphasizes the of import function and positive effects of BSC on an organisation ‘s scheme execution. As mentioned by Hung-Yi Wu in his 2012 work, banking establishments must develop an effectual manner to aline their schemes with corporate ends based on public presentation analyses if they are to prolong their competitory advantages. Such effectual manner is recommended to be the BSC theoretical account, which is proved to be a utile and efficient tool in pass oning organisation ‘s ends and marks to all bank staff and in public presentation measuring ( Bible, et al. , 2006 ) . Furthermore, the research is to place good points related to BSC in both academic publications and real-world experiences of an organisation.

Apart from that, the research helps the writer and readers analyze the difference of BSC from theoretical to practical positions based upon feedback of surveyed employees. Consequently, it is good to understand how BSC has been adapted and implemented in the context of HSBC in Vietnam, which is, as pointed out by Burney and Swanson ( 2010 ) , built-in to the development of systems that will efficaciously obtain organisational ends. The research will decidedly give more penetrations of the bank ‘s BSC execution procedure and effectivity.

Furthermore, the research will uncover HSBC employees ‘ satisfaction degree and specific feedback on the bank ‘s BSC system and increase apprehension of its strategic nexus and possible relationships between BSC steps in pattern. It allows the concern to remain competitory and profitable ( Zeng and Zhao, 2005 ) in sustainable development.

However, apart from the positive effects of BSC on HSBC ‘s executing of scheme, the research besides helps to calculate out some spreads and countries for attending and betterment that will be analyzed in the undermentioned chapters. In instance its consequences are apprehended and pull the attending of higher direction so it can do farther part to the development and acknowledged effectivity of BSC in HSBC Vietnam. This article may assist the direction to concentrate on the demand to finish the execution of BSC system to maximise its benefits and minimise the negative effects. The revelation of the defects, if any, is important as it will lure organisations to seek for measurement systems that support them better in the challenging concern environment ( de Waal and Counet, 2009 ) .

With these above grounds, the writer strongly believes that the subject “ Balanced Scorecard in HSBC Bank ( Vietnam ) Ltd. – Prime minister Centers: positive and negative effects ” will assist the readers get more into the research.


Harmonizing to Varkevisser, Pathmanathan & A ; Brownlee ( 2003 ) , the aims of a research undertaking sum up what is to be achieved by the survey. It is advised by Ababa ( 2005 ) that if specific aims are decently formulated, they will ease the development of research methodological analysis and will assist to point the aggregation, analysis, reading and use of informations. Therefore, these aims should be closely related to the research job ( Saunders et al. , 2009 ) . Furthermore, aims should be logical, coherent, executable, realistic and sing local conditions every bit good as being defined in operational footings that can be measured and phrased to clearly run into the intent of the survey ( Ababa, 2005 ) . With the subject: “ Balanced Scorecard in HSBC Vietnam Ltd. – Prime minister Centers: positive and negative effects ” , six aims of the survey are determined as following.

To understand the construct of BSC and its positions as a public presentation measuring tool,

To place positive and negative effects of BSC in HSBC Vietnam,

To mensurate if HSBC BSC theoretical account is different compared to an ideal theoretical account,

To measure the relationship between employee apprehension of the organisation ‘s aims with a well-performing organisation,

To analyse the causal relationships ( if any ) amongst four positions of BSC, and

To place the weakest one of the four positions to better.

With these research aims, the survey is to be conducted to clearly reply the inquiries relevant to the subject as below.

What is the Balanced Scorecard and its four constituents?

What are HSBC BSC positive and negative effects?

What is an ideal BSC theoretical account and what is HSBC BSC compared to it?

How make HSBC employees understand the organisation ‘s aims and its relationship with a well executing organisation?

Are there any relationships amongst four positions?

Which 1 among the four positions needs more focal point?


Due to the restriction of clip and range of work, this research merely focuses on a little group of employees, hereinafter mentioned as those working at two Premier Centers in Hanoi and Ho Chi Minh City, but non extended to the full figure of about 1500 employees bank-wide. Two Premier Centers have a figure of 60 staff including Premier Center Managers, Gross saless Directors, Relationship Officers, Services Managers, Services Assistants, Counter Officers and Tellers. As such, the findings and consequences are merely representative of portion of the existent figures and perchance non wholly accurate.

In add-on, the research is merely conducted at employees ‘ degree or a individual group of employees ‘ point of position instead than on the senior direction ‘s base point, so there will be some unbalanced justifications and account after the study.

It is hoped that one time the research methodological analysis is proved to be trusty plenty to the representative sample, it will be supported to use to the whole bank with full engagement of employees at all degrees including senior directors to acquire a broader position and more precise consequences.


This paper consists of five chief chapters.

Chapter 1: Introduction

This 2389-word subdivision is an debut to the research, functioning as an explanatory background to what leads the writer to the chosen subject and why to take the subject. In add-on, it is followed by a brief sum-up of significance of the survey and cardinal issues that the research work intends to turn to. The range of survey is besides included in the first chapter in order to contract the boundary and put the focal point on the research country.

Chapter 2: Literature Reappraisal

This 4836-word chapter is the theoretical background of the survey concentrating on the relevant literature and theories on public presentation measuring, balanced scorecard and its positions. It helps to show an apprehension of the research subject and its surrounding content. At this phase, it is of import to critically reexamine many academic writers ‘ points of position on the research subject and related issues. From those literatures, specific hypotheses are developed as a foundation to get down the research.

Chapter 3: Methodology

In this portion, the research doctrine, scheme, method and attack used in this survey are described. It besides presents the procedure of garnering informations, trying method, execution of questionnaires and techniques of analysis. Some ethical issues when carry oning this research in a banking organisation like HSBC are besides mentioned. 3836 is the figure of words in this chapter.

Chapter 4: Datas Analysis and Discussion

This subdivision outlines the findings and consequences of information aggregation at HSBC as conducted in chapter 3. Feedback from its employees will be revealed through a list of figures and tabular arraies. The proposed hypotheses will be further discussed based on the consequences. There are 3897 words for this chapter.

Chapter 5: Decisions and Recommendations

This is a sum-up of the chief decisions of this research and executable recommendations to the research issues. Some restrictions and suggestions for following researches are besides included.

Chapter 2


2.1 Introduction

This chapter will cover the literature on public presentation measuring, scheme map, balance scorecard and its function in alining organisational ends to the scheme. By analyzing related literature on BSC, it is seen that BSC truly plays a important function in the success of an organisation and that it helps to mensurate the success of the scheme ( Kaplan and Norton, 2001 ) . Schneiderman ( 1999 ) stated that balanced scorecards that did non hold a sound foundation would neglect. Therefore, this chapter will sum up the positive and negative effects of BSC collected from many surveies and luxuriant hypotheses to foretell the effects of BSC in pattern of a specific organisation. Additionally, it is learnt from this chapter that the four positions of BSC are inter-related, and that even though fiscal consequences are really of import, presenting long term value and success will necessitate a focal point on non-financial factors including high acting people, efficient procedures and effectual client services ( Kaplan and Norton, 1996 ) . The undermentioned portion is related conceptualisation on the research content.

2.2 Performance Measurement

2.2.1 Definition

Performance measuring is defined by Lebas ( 1995 ) as a system by which a company monitors its day-to-day operations and evaluates whether it is achieving its aims. Meanwhile, Lichiello and Turnock ( 1999 ) specify it as the choice and usage of quantitative steps of capacities, procedures, and results to develop information about critical facets of activities, including their consequence on the populace. Basically, it is considered portion of a public presentation direction system ( Sanayei et al. , 2011 ) and is set aligned with the organisation ‘s scheme.

Harmonizing to Hronec ( 1993 ) , public presentation measuring system is a tool for equilibrating multiple steps ( cost, quality, and clip ) across multiple degrees ( organisation, procedures and people ) . While it was suggested by Green et Al. ( 1991 ) to “ aim the value-added activities of the company ” , Kaplan ( 1991 ) suggested that an effectual public presentation measuring system “ should supply seasonably, accurate feedback on the efficiency and effectivity of operations ” . In fact, organisations ever plan to construct an effectual tool to assist them pull off the public presentation and good accomplish the marks.

2.2.2 The function of public presentation measuring

Harmonizing to Christian C. Johnson ( 2007 ) , it is of import to understand why mensurating an organisation ‘s public presentation is both necessary and critical.

aˆ¦ An organisation runing without a public presentation measuring system is like an aeroplane winging without a compass, a Formula One race auto driver steering his auto blindfolded, or a Chief executive officer runing a company without a strategic planaˆ¦

The intent of mensurating public presentation is non merely to cognize how a concern is executing but besides to enable it to execute better. The ultimate purpose of implementing a public presentation measuring system is to better the public presentation of an organisation so that it may better function its clients, employees, proprietors, and stakeholders.

Basically, a public presentation measuring system enables an endeavor to program, step, and command its public presentation harmonizing to a pre-defined scheme ( Johnson, 2007 ) . Many writers including Atkinson and McCrindell ( 1997 ) , De Toni and Tonchia ( 2001 ) , as cited in Pongatichat and Johnston ( 2008 ) , have identified its benefits as a tool to ( I ) communicate the organisation ‘s strategic way, strategic precedences, ( two ) create a shared apprehension, ( three ) proctor and track the execution of scheme, ( four ) align short-run actions with long-run scheme, ( V ) make clear the links between public presentation of persons and sub-units, and sub-units and overall organisational public presentation, ( six ) promote integrating among assorted organisational procedures, ( seven ) focal point alteration attempts, and ( eight ) facilitate organisational acquisition.

2.2.3 Different public presentation measuring theoretical accounts

Many researches on banking public presentation measuring used traditional steps like statistical analysis ( Arshadi & A ; Lawrence, 1987 ; Devlin & A ; Gerrard, 2005 ) , structural equation theoretical accounts ( SEM ) ( Collier, 1995 ) , multi-criteria categorization methodological analysis ( PARCLAS ) ( Kosmidou et al. , 2006 ) and DEA ( Giokas, 2008 ) . In the interim, Wu et Al. ( 2011 ) , Chen et Al. ( 2008 ) , and Meyer and Markiewicz ( 1997 ) chose to follow the four BSC positions, including both fiscal and non-financial indexs. In their 1992 work, Kaplan and Norton besides described public presentation measuring as a manner to reexamine an organisation ‘s fiscal and non-financial ends. Figure 2.1 summarizes the choice indexs of banking public presentation measuring that have been investigated in several of import surveies, along with their chief analytical methods ( Wu et al. , 2011 ) .

Harmonizing to Weber et Al. ( 2001 ) and Bible et Al. ( 2006 ) , traditional measures no longer worked efficaciously because those steps relied so strongly on fiscal indexs and did non sufficiently cover other critical factors like accomplishments, competences, and motive of employees ; client and supplier relationships ; advanced merchandise development ; databases and information engineerings ; efficient and antiphonal operating processes ; invention in merchandises and services ; client trueness and relationships ; and political, regulative, and social blessing. Meanwhile, the BSC can cover all these steps in a more specific and appropriate manner that supports direction in implementing organisational ends.

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