Linking strategy into operational management: A survey of BSC implementation in Finnish energy sector

Abstract

Purpose

The purpose of this paper is to find a means of connecting strategic management and operative performance measurement.

Design/methodology/approach

The paper focuses on the balanced scorecard (BSC), its levels of use and utilization, the influence of specific features, the most used metrics and features of successful implementation of the BSC in the energy sector. The paper is based on empirical interviews with 16 locally operating energy companies and business units of larger corporations. BSC is a wide spread strategic management system which originated in the early 1990s. The aim of the BSC is to facilitate in depth discussion about a company's vision, strategy and critical success factors and translate them into specific measures and objectives in action.

Findings

The study shows that maintaining a vision and a strategy has not been very prevalent in Finnish electricity companies. However, the deregulation of the energy markets in Finland, from the mid‐1990s, has increased the competition and made maintaining a strategy all the more important. Adjustment to this deregulation and the large number of different businesses are special features of the electricity sector. It can be concluded that benchmarking on other industries, where BSC has been in use, leads to better results faster in the energy sector. However, it has to be noted that strategy and management have to be seen as a unique set of activities. In the construction phase of the BSC, the process of searching for the metrics is more important than finding them.

Originality/value

The paper offers insights into linking strategy into operational management.

Citation

Haapasalo, H., Ingalsuo, K. and Lenkkeri, T. (2006), "Linking strategy into operational management: A survey of BSC implementation in Finnish energy sector", Benchmarking: An International Journal, Vol. 13 No. 6, pp. 701-717. https://doi.org/10.1108/14635770610709068