1 Observational Assessment of the Balanced Scorecard Strategic Alignment Process: A Study of a Utility Company By Hazeline Ayoup 1 Faculty of Accountancy & Accounting Research Institute Universiti Teknologi MARA, MALAYSIA & Universiti Utara Malaysia, Kedah, MALAYSIA Abstract As part of a larger study, this paper presents an exploratory and qualitative analysis of the Balanced Scorecard (BSC) implementation of a utility company in Malaysia. Specifically, the paper explores whether the use of BSC facilitates the alignment between corporate objectives, strategic business units’ strategies and the key performance indicators of individual managers. After sixteen years of BSC implementation, the company has received some mixed responses, both positive and negative feedback from its stakeholders. One of the major proponents about BSC is its purported ability to create vertical and horizontal alignment between each separated business segments, divisions and at individual level, particularly in a complex organization. Therefore, this study presents an observational assessment on how a Malaysian company which have been utilizing the BSC methodology for more than a decade and still trying to find a better match and alignment between corporate objectives, SBU strategies and KPIs of individual managers. It presents the current state of BSC alignment tools and processes used, and premised on some observational and documentation analysis, suggests on several improvement initiatives. INTRODUCTION Balanced Scorecard has received extensive attention from the practitioners and researchers since its introduction and implementation by the US companies. The framework was developed based on performance management practices of companies by Kaplan and Norton (1992). Its simplicity and practicality has driven many companies from other parts of the world to adopt this methodology into their system to manage the company‟s performance and to sustain its competitive advantages. After more than a decade of development, many studies have empirically observed the implication of BSC implementation towards organizational performances. However, implementing the BSC is not only a matter of monitoring its outcome, more importantly is whether the outcome facilitates better alignment between corporate objectives, Strategic Business Units (SBUs) strategies and Key Performance Indicators (KPIs) of individual managers. The cascading effect of successful BSC implementation should permeates across different levels of organizational and managerial hierarchies. Successful and effective BSC implementation is still a major stumbling block for many organizations (Bourne & Bourne, 2005). One of the major contributions of BSC successful implementation which has been highlighted in many studies is its ability to align different organizational parts in achieving the corporate performance (Kaplan and Norton, 1996, 2000, 2004, 2006; Bloomquist and Yeager, 2008). To date, there is still lack of published studies looking at the implementation process which is crucial before it can bring significant benefits to the companies particularly in the Asian companies‟ context (Anand, Sahay and Saha, 2005; Othman, 2006, 2008; Jusoh, Ibrahim and Zainuddin, 2006 and Sandhu, Baxter and Emsley, 2008). Most of the available studies are done in the Western companies which have a different cultural setting compared to Malaysia (Davis, 1996; Davis and Albright, 2003; Maiga and Jacobs, 2003; Braam and Nijssen, 2004, Hendrikson, Menor, Wiedman and Richardson, 2004; Ax and Bjornenak, 2005; Decoene and Bruggeman, 2006 and Nielsen and Nielsen, 2008). The current study is part of a larger 1 Corresponding author: "Hazeline bt. Ayoup" <hazel@uum.edu.my>