Designing a balanced scorecard approach for an HVAC SME : a case study

Abstract

Purpose: An SME might find strategic alignment, operational efficiency and long-term sustainability quite challenging. Recognising the company’s growing need for structured management systems, the primary purpose of this study is to design a tailored Balanced Scorecard for an HVAC SME. To achieve this objective, the study first establishes the rationale supporting the adoption of this approach, which serves as the foundation for the development of a customised Balanced Scorecard for an HVAC SME and the construction of a corresponding Strategy Map. Subsequently, the research critically assesses the designed Balanced Scorecard in relation to the preliminary factors affecting the organisation and identifies the challenges associated with its implementation within the case HVAC SME. Design: To achieve the research objectives, a qualitative case study approach was adopted. In-depth semi-structured interviews were carried out with the two co-founders of the HVAC SME, as well as with various managers, technicians and the external accountant. Additionally, the research was further supported by a validation interview conducted with the two co-founders. Findings: Following an examination of the HVAC SME’s nature, a Balanced Scorecard was designed and developed with five perspectives. For every perspective, strategic objectives, KPIs, targets and initiatives were defined, and their interrelationships were visually represented though a Strategy Map. Finally, the study evaluated the challenges associated with implementing the proposed Balanced Scorecard, considering any preliminary factors influencing the SME. Conclusions: Given the findings and the specific characteristics of the SME, the implementation of the proposed Scorecard is a valuable tool for supporting the firm during its expansion. This is particularly relevant considering the absence of a performance measurement system. The co-founders’ validation of the proposed Balanced Scorecard and Strategy Map emphasise the interconnections among the perspectives. Value: This study holds relevance for the HVAC SME as it navigates challenges and transitions towards growth, where the risk of overtrading may undermine financial stability. Moreover, the research offers a practical framework that may inform other HVAC SMEs seeking to adopt a Balanced Scorecard approach to support sustainable expansion.