Integrating Balanced Scorecard and Analytic Hierarchy Process Techniques for Evaluating Corporate Performance

Abstract

A good business performance measurement system is an effective tool to sustained growth in profits. Although interest in creating performance measurement models is widespread. a well-designed system is rare, To be successful in today's competitive environment a performance measurement system should incorporate strategic success factors and contain financial and non-financial measuring index to carry out strategic management. In the 1990s, Kaplan & Norton introduced a concept called the Balanced Scorecard. The Balanced Scorecard supplements traditional financial measures with criteria that measured performance from three additional perspectives - those perspectives of customers. internal business processes. and learning and growth. This paper presents five measuring index criteria for each perspective, To calculate the relative priority for these measuring index. we investigate weights investigated by interviews with management consultant. Then, AHP method is employed for calculating priority weight. Our evaluation model may be referred to as the Balanced Analytic Hierarchical Performance Model(BAHPM) in the sense that the analytic hierarchical scheme. along with the AHP. is applied. The BAHPM is the first kind of analytical model to cover a wide variety of measures. In comparison with previous evaluation models. our model shows strengths in structural flexibility. ease of incorporating feedback, group evaluation capacity, participation promotion. sensitivity analysis. and computational simplicity. A prototype based on the BAHPM can be applied to various industry sectors.