Strategy implementation using the balanced scorecard: A case study in an insurance company

Abstract

This thesis examined the use of the balanced scorecard (BSC) as a tool for strategy implementation and performance measuring in an insurance company. The aim was to examine the topic by reviewing literature and conducting a case study. The aim of the case study was to gain a profound understanding of how an insurance company implements its strategy using the BSC.

Literature on BSC states that it is a tool for strategy implementation and performance measuring. It looks at the company from four strategic perspectives: financial, customer, internal business process, and learning and growth. By collecting measures in the four perspectives, the BSC can help the company to achieve short-run and long-run, financial and non-financial goals. The BSC measures give the management an objective view of the company’s situation.

Based on previous case studies about the use of the BSC in insurance companies, the BSC has been applied early on. Insurance companies often include similar objectives and measures in their BSCs. Using software to implement and manage the BSC is common among insurance companies. Insurance companies also often link employee incentive compensation to the BSC in some way.

The case study was conducted in a private insurance company that uses the BSC. Results from the case study indicate that the BSC gives a great view of the company’s performance and is a great communication tool. The BSC includes measures in all four perspectives and the automation of the BSC gives added value to it.

This thesis concludes that the BSC is used in insurance companies to communicate strategy through the entire company and to give the management an objective view of the company’s situation. Software use is common for managing the BSC, and BSC is to some degree linked to employee incentive compensation.