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Balanced scorecard and hoshin kanri: dynamic capabilities for managing strategic fit

Barry J. Witcher (Norwich Business School, University of East Anglia, Norwich, UK)
Vinh Sum Chau (Norwich Business School, University of East Anglia, Norwich, UK)

Management Decision

ISSN: 0025-1747

Publication date: 10 April 2007

Abstract

Purpose

The paper seeks to combine the uses of the balanced scorecard and hoshin kanri as integrative dynamic capabilities for the entire strategic management process. It aims to posit a model for the combination of these long‐ and short‐term organisational activities as a framework for a senior level to manage a firm's strategic fit as an integrated organisation‐wide system that links top management goals to daily management.

Design/methodology/approach

The resource‐based view of strategy is explored for its relevance to how a combined balanced scorecard and hoshin kanri approach serves as a high‐order dynamic capability. Examples are given from Canon, Toyota and Nissan, of how core capabilities are managed to show how strategy is executed cross‐functionally across a firm's functional hierarchy.

Findings

The study finds that strategic management of the organisation should consider the long‐term strategy as well as the short‐term capability. Important to this are core capabilities and core competences, cross‐functional management, and top executive audits, which, when managed properly, explicate a new view of strategic fit, as a form of nested hierarchies of dynamic capabilities.

Originality/value

The paper is the first exposition of how balanced scorecard and hoshin kanri practices may usefully complement each other in strategic management. It is a useful framework for dynamically managing sustained competitive advantage.

Keywords

Citation

Witcher, B.J. and Sum Chau, V. (2007), "Balanced scorecard and hoshin kanri: dynamic capabilities for managing strategic fit", Management Decision, Vol. 45 No. 3, pp. 518-538. https://doi.org/10.1108/00251740710745115

Publisher

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Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited