Balanced Scorecard Case Study Hotel

Abstract

Tourism is a major driver of economic growth and livelihood promotion in the Uttarakhand state of India. The contribution of tourism to the state gross domestic product (GDP) and employment generation is significant. The expansion of tourism inevitably brings about the development of the hotel industry. Hotels must create effective competitive strategies for survival and use a performance measurement system that meets the requirements of a changing environment. Several studies have been conducted to study the rich tourist potential of the state. However, no research studies are available regarding performance measurement practices adopted by hospitality managers in Uttarakhand for measuring the performance of their establishments. The present study examines existing performance measurement practices used by hotel managers that employ the balanced scorecard (BSC) − an innovative and comprehensive performance measurement framework for assessing the performance and progress of hotels in this mountainous state of India. The results indicate that in spite of using measures from different perspectives inherent to the original BSC, hospitality managers are not aware of the concept of BSC in a formal manner. The study reveals that hotels in Uttarakhand still focus on the use of financial measures as compared to non-financial measures for measuring performance. The study supports the link between hotel performance and BSC measures usage.

Keywords:

Balanced scorecardperformance measurementhotelUttarakhand

Suggested citation: Kala, D. & Bagri, S.C. (2014). Balanced scorecard usage and performance of hotels: A study from the tourist state of Uttarakhand, India. Asia-Pacific Journal of Innovation in Hospitality and Tourism, 3(2), 153-173.

Phillips, Paul A. (2007) The balanced scorecard and strategic control: A hotel case study analysis. Service Industries Journal, 27 (6). pp. 731-746. ISSN 0264-2069. (doi:https://doi.org/10.1080/02642060701453213) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

Abstract

Over the past decade, the literature has seen a proliferation in articles relating to the balanced scorecard, which has been motivated by managers' needs to develop a more balanced view of performance measurement. Despite global adoption by organisations in the private and public sector, the question of how the balanced scorecard could be used as a strategic control tool has rarely been directly discussed. Academic research has tended to have a strong predilection for studies assessing the balanced scorecard as a control tool utilising metrics to report various achievements of targets. A longitudinal case study approach is used over a three year period, which seeks to deepen understanding about the theoretical and practical aspects of the balanced scorecard as a strategic control tool. It is anticipated that this would illuminate the way in which the balanced scorecard has intertwined in the fabric of organisational life and how it positions itself in the wider social context in which it was embedded. The findings of the case study reveal that over-reliance on the successful achievement of balanced scorecard metrics without a focus on strategic control could lead to an organisation having to pursue an exit strategy for a profitable product.

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