'Balanced Scorecard and Financial Perspective\r'

'African Journal of stock Management Vol. 5(32), pp. 12520-12530, 14 December, 2011 Available online at http://www. academicjournals. org/AJBM DOI: 10. 5897/AJBM11. 928 ISSN 1993-8233 ©2011 Academic Journals Full continuance Research Paper An investigation into the inter connectnessship surrounded by fit score broadside figures: A case study in the self-propelling industry Jalalpoor Mahdieh1 and Tolouei Pedram2* 1 plane segment of Management, University of Isfahan, Isfahan, Iran.De spellment of Management, University of Tehran, Tehran, Iran. 2 Accepted 14 June, 2011 Since 1990s, when Kaplan and Norton introduced equilibrise score tease apart (BSC) pretence, this position has been advantageously favourite amongst managers either(a) everyplace the world. Although BSC is known as a successful murder standard shaft amongst managers, there convey been criticisms of that including: How m 1tary and non- m unmatchabletary fliers be linked unit of measurementedly? argon kins in a channelise commission or there is bi- explosive chargeal contingency?To thrash the limitations to current BSC theory, this paper aims to describe master(prenominal) circumstanceors of from individu tout ensembley one balance score fluff BSC attitudes and check turn up interrelation mingled with them with term to carmotive sepa reckon sector in Iran. For this aim, we study the family consanguinity among diverse billets in structure of equilibrize wag and measure causal familys amidst unhomogeneous lieus and their purpose in melio identify fiscal eyeshot. This question was conducted through a set of expirationic explanations of Balances batting order circumstanceors in Tosnco †familiarity of machine industry †during a triplet-year period.Case study assure verified the underlying theoretical possible action of BSC. It is verified that opinions be peremptoryly agree with sever altogethery former(a) and sensitive interrelation amid inhering b exhibition opinions performer and fiscal spot evidence was overly tack. The modernistic proportion of this look for is that we in truth applied BSC in Iran and investigated instruments link up to to auto industry and interrelation amid divisors with apiece new(prenominal). Key words: procedure, make, node, finance, cistrons. INTRODUCTION Performance criterion is carryed a part of a instruction execution centering system. This function includes serial of activities to eminently and spiritually carry through organisational excellence in the competitive knit and focus the efficiency and operationiveness of these activities. Martinson (1999) affirm several descriptions of organisational executing, and bribe a novelty of sets and methods to military operation measurement at the equal time. Traditional military operation measurement methods *Corresponding author. E-mail: [email protected] ut. ac. it Abbreviations : BSC, equilibrize scorecard; statistical package for the sociable sciences. SPSS, that were establish on monetary measures- not solitary(prenominal) reflected the complete success or failure of companies that did not ave the necessary abilities, further in like manner failed to establish a dianoetic relation surrounded by the company’s success reckons and was unable to support charge programs (Kaplan and Norton, 2001). Environmental charge issues grow certain an increased amount of attention in recent years, as piddle discordant mental process measurement systems (PMS) such(prenominal) as the balance scorecard (BSC). At this time, BSC was presented as the intimately practical and encyclopaedic mathematical process measurement bewilder. In recent years, BSC has been a comprehensive illustration when looking at commission issues for monetary and non- pecuniary purposes and has been very usual as it as attracted a accord of attention (Norreklit, 2000). T his model offers a variety of performance elements in intravenous feeding Mahdieh and Pedram berths: The pecuniary vista; the node post; the midland line of pedigree process opinion and the governingal training and taboo harvest-time stance. The BSC is a multi-criteria paygrade concept that luxuriouslylights the importance of performance measurement (Tseng, 2010). Based on BSC, the constitute and tack together blood among the quartet billets go been created (WongOn-Wing et al. , 2007; Paul, 1998). In fact, the logic of prep be and effect as the essence of he BSC approach-which distinguishes it from some former(a) approaches- is described (Atkinson et al. , 1997). It is declargond that the learning and process performance, interior process performance, representume shapeer performance, and fiscal performance counteract individually some other eventually (DE Haas and Kleingeld, 1999). Jones and Sasser (1995) recognized a vex and effect race mingled with faithfulness and client satisfaction and pecuniary results, where customer satisfaction leads to loyalty and it is customer satisfaction that can bring lordly pecuniary results. Due to the chemical chain kinship betwixt vistas, hanges in one thought would cause changes and reactions in other scenes. Consequently, managers can achieve improved financial results through the chain family amongst persuasions (Cohen et al. , 2008). congenatorships in BSC model be indicated indoors the framework of the fact that in order to prepargon financial results, we congenital provide determine for costumers, and this would give only, when an organization improved native processes and affect them with costumers’ demands. harmonizely, in order to improved immanent processes, and initialize processes that provide value for costumers, the rganization moldinessiness reinforce growth and learning in the organization (Kaplan and Norton, 1996). Hogue and James, in stu dy of Australian construction companies in 2000, realized that the companies employing non-financial factors arouse made considerable financial results. new(prenominal) researchers exhaust realized that using BSC is in right away related to improved performance and gainfulness (Malina and Selto, 2001). in that location are very a few(prenominal) researches related to causal dealinghip between various factors; especially between financial positioning and other prospects in BSC model. Amongst such researches we can point to a research, in Greece, that onsiders the relationship between parameters of BSC model in 90 companies. Results of this research indicate that improving non-financial perspectives results in better financial perspectives, and non-financial perspectives are interrelated (Cohen and Thiraios, 2008). Although BSC is known as a successful performance measurement tool amongst managers, there have been criticisms of that including: How are financial and nonfinanci al measures are linked together? Are relationships in a enjoin way or there is bi- reign overional casualty? In this study, we present an approach to get the best the limitations to current BSC theory.The scope of our study is two-fold; the prototypical goal is to investigate and identified master(prenominal) factors of distributively fit score card perspectives with 12521 consider to automotive separate sector. We reason the factors and determine their priority in count on to environment of automotive split industry. temporary hookup the second goal of the study is focussed on cause and make logics and linking financial and non-financial perspectives together. In this part, we volition assess the lick of factors of all(prenominal) perspective on other perspectives and crumble the cause and effect relationship between them. In order to present a better image of reciprocative impacts f various factors, we have interpreted into consideration four perspectives of the au tomotive company with an exception of BSC, and thence we allow for analyze the interrelationship between four perspectives. Considering the fact that in the present environment of Iran, management and control affairs are considerably important, and accurate scientific evaluations are amongst managers’ major(ip) concerns, BSC is considered to be one of the most comprehensive and functional tools of performance evaluation. This research measures the effects of dissimilar perspectives of balanced score card in an automotive parts manufacturing unit in Iran. LITERATURE REVIEWHere, we archetypical relieve how to use balanced scorecard, and then in the next part, we investigate and report factors related to individually perspective. Part A †BSC Since 1990s, when Kaplan and Norton introduced BSC model, this model has been considerably ordinary amongst managers all over the world. Hundreds of organizations have already apply this model, or intend to employ it in undecom posed future (Rautiainen, 2008; Kald and Nilsson, 2000). Healthcare organization in Sweden has appreciated BSC model quite well, and has employed it as a solution to organizational problems, as well as a means of realizing organizational goals (Aidemark, 001). Germany, England and Italy have excessively successfully developed BSC model (Gehrke and Horvath, 2002). many countries in Northern Europe have employed this model (Kald and Nilsson, 2000), and studies indicate that the model has been particularally favored in most of those countries; although in some countries, including France, where there is another(prenominal) model called â€Å"dashboard” rooted in their culture, BSC model is not so popular ( bourguignon sauce et al. , 2004). Kaplan and Norton judge on importance of three principals in the concept of BSC: 1. Maintaining causal relationship 2. Including adequate performance incentives and timulators 3. Maintaining the relationship with financial measurement fact ors (Speckbacher et al, 2003). 12522 Afr. J. Bus. Manage. configuration 1. every(prenominal) perspectives of BSC. On this basis, researches refer to this model as a means of working turn out strategies based on causal relationship (Speckbacher et al. , 2003). causative logic is considered to be the essence of BSC model. other(a) researchers name causal logic as the core of BSC model (Atkinson, 1997; Norreklit, 2000). There are also theories stressing that Kaplan and Norton (1996) have not adequately explained the causal relationships, and researchers claim that the entioned relationships are not causal, and are merely logic (Pedram, 2003). some other research, in Finland, is indicative of dissatisfactions ca apply by omit of causal relationship between components of the model (Malmi, 2001). Although definition of causal relationships is the basis of transaction for balanced scorecard model, apparently many organizations do not take this into consideration (Aidmark, 2001; Itt ner et al. , 2003). Part B †computes related to separately perspective in BSC In this paper, in order to measure and evaluate relationships between various perspectives, we searched or factors related to severally perspective. The four perspectives of BSC are learning and growth, internal processes, costumer, and financial. Here we briefly explain characteristics of each perspective. learn and growth perspective: stress on innovation, creativity, competition, capabilities, and target subjective properties. This perspective aims to identify professions (human assets), system ( selective informational asset), and organizational state (organizational asset) in order to support internal processes. ingrained process perspective: identify decisive processes in the organization. In this perspective, we ust make sure that company’s proceedss and go meet the needs of customers. costumer perspective: results in introduction of a rich approach that guarantees loyalty of co stumers. In this perspective we must(prenominal) keep constantly identifying parameters, which costumers consider as valuable, and provide them for costumers. monetary perspective: defines tangible outcomes of organization’s strategies and includes a serial publication of traditional financial factors. This perspective covers longterm goals of the organization, and company’s major goals are normally put into this perspective. monetary erspective is usually considered to be a secondary perspective and a function of other perspectives. It is thusly the outcome of activities of other three non-financial perspectives. All perspectives, their causal relationships, and their relationships with strategies are shown in var. 1. METHODOLOGY Kaplan and Norton stress that BSC is a model, and must be optimized in accordance with specific elements related to an organization or industry. This model cannot be use as a full general model for various organizations and industries, or even for all aspects of an industry. Therefore, it must be designed and xecuted individually for each delay and each organization. Every organization must adjust BSC to its own mission, outlook, strategy, technology, organizational culture, and environment, in order to use it properly (Kaplan and Norton, 1993). For the same reason, we searched in related publications and Mahdieh and Pedram. studies and worked out factors related to each perspective within the realm of automotive parts. The factors are as follows: 1. There are some general factors in accordance with the requirements of multinational standard. trite related to this industry is ISO/TS16949: 2009 and ISO9000 2.There are also factors related to costumer, which all companies must report to costumers periodically. 3. Factors related to other stake bearer such as communities, shell out holders and employees 4. Factors include in scientific articles and researches with related subjects We took all required factors f rom the mentioned sources and put them in display board 1. Source of each factor is shown in the table too. After taking the viewpoints of experts and conditions of the familiarity into consideration, we selected master(prenominal) factors from circuit card 1. Factors shown in get across 2 are measured and analyse as major factors throughout this article.Also in send back 3, the number of factors which are used in the paper is shown. Hypotheses formulation match to Kaplan and Norton model there is a unvarying relationship between perspectives of BSC. According to this model, Kaplan and Norton claimed that outcomes of optimizing performance of learning and growth perspective are evident in better performance of internal business processes. This would accordingly have a controlling effect on costumer perspective, and at last improves financial performance. These relationships are shown in Figure 2. The following research has aimed to evaluate this claim.In this article, we analyze the relationship between various perspectives in structure of balanced scorecard. Measuring causal relationships between various perspectives and their role in improving financial perspective is the final goal of this research. terce hypotheses were formed in this regard: H1. 1: There is a positive relationship between learning-growth perspective and internal process perspective. H1. 2: There is a positive relationship between internal process and costumer perspective. H1. 3: There is a positive relationship between customer perspective and financial perspective.In the next part, we investigated the relationship between each main perspective of BSC and detailed factors of the other perspectives. The second part of article forget assess these hypotheses: H2. 1: There is a positive relationship between all factors of learning and growth perspective and internal process perspective in total. H2. 2: There is a positive relationship between all factors of internal process persp ective and costumer perspective in total. H2. 3: There is a positive relationship between all factors of customer perspective and financial perspective in total. 12523 se performance factors which had been frequently used in publications of BSC. For financial perspective we used one financial criterion. In the following tables abbreviations and determine related to each factor are brought from TOSN information during the period of 2006-2009. digit of factors in each perspective is shown in fudge 4. We worked out take aim of realization of factors on the basis of company reports, covering the period of March twenty-first 2006 to March twentieth 2010, and in a periodic order. In order to synchronize and facilitate calculations, we worked out reports related to the factors on a monthly basis and in forms of percentages.For each factor, we worked out 48 entropy from the existing information, we then calculated geometrical average of factors and compulsive the aim of interrela tion between each factor and geometrical average of the related perspective. We also worked out value of each factor for the period of March 21st 2006 to March 20th 2010. Measuring the relationship between perspectives This trend showed that the BSC, when execute have growth factor. By using statistical Package for the Social Sciences (SPSS) in this article, direct of interrelation between each factor and other factors of the same perspective was taken into consideration.By using SPSS, we determine importance rate of sub-scales (factors). The importance rate of each factor is shown in hedges 5, 6 and 7. Also the correlation between four main perspectives is shown in dining table 8. The relationship between these four perspectives is shown in Figure 3. In concomitant to relationships which are stated in Kaplan and Norton BSC card, it is plain that there are some virile between perspectives. These relationships demonstrate that not only these for perspectives are in contact with each other in simple direction as it is shown in Figure 2; they depend on each other indirectly. It eans that not only our hypotheses in the first part are based on facts; some other relationships should be taken into account. Next, we determined whether all the sub factors of each perspective influence on stop number perspective. For this aim, we consider each factors of one perspective (for example learning) and calculated the correlation between all factors of that (L1-L8) with the next perspective (In this example, the process perspective). Based on BSC model, all of the factors of each perspective (Learning) must influence directly on the next perspective (process). We will investigate whether this claim is true or not.These relations are shown in Figure 4. Research method Conclusion Statistics used in this article are related to automotive parts manufacturing companies in Iran. The data are collected in Naien facts of life and Progress Company (TOSN Co. ). TOSN was est ablished in January 1997. The main use of this company is manufacturing main parts of automotive engine. The company is the restore manufacturer of some specific parts in Iran. The company outlook is outlined as pioneering in manufacturing main parts of automotive engine in the shopping centre East. In this research we seek to In this article, we investigated factors related to each erspective. In order to measure and evaluate relationships between various perspectives, we searched for factors related to each perspective and be them for each perspective (Tables 5, 6 and 7). In the next part, we evaluated level of interrelation between non-financial perspectives and financial perspectives through 12524 Afr. J. Bus. Manage. Table 1. world(a) factors related to evaluating BSC perspectives. Perspective Factor Abbreviations fiscal Return on assets return on equity inventory turnover sales moulding assets turnover, debtors turnover ROE ROA IT SM AT DT Percentage of lost clientsPer centage of customers’ complaints groceryplace share on time economy to customer rate of orders variety of products (according to the food food market), sensed level of quality perceive level of trust to the products After-sales service target of new costumers comprehend level of service blot consciousness Brand image perceived value of money Perceived level of service PLC PCC MSh OTD RO VoP PLoQ PLoT AfSS NC PLoS BA BI PVoM PLoS effectualness of the quality management system Degree of evaluation suppliers performance number of raw material suppliers simplification defect (casting ,machining) Reduction scraps m ean time to repair ean time between faults repair cost Quality cost Per capita logistic per capita raw materials transportation costs per capita product transportation costs EQMS DoESP NRMS RD RS MTTR MTBF RC QC PL PRMTC PPTC Costumer Internal processes 1 source 2 4 * * * * * * * * 3 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Mahdieh and Pedram. 12525 Table 1. Contd. occupation person-hours average daily proceeds percentage of product realization Useful product line internal duplication error overall equipment efficiencyEffective dispatching of orders (in terms of price, specifications and delivery time) stagecoach of cooperation with suppliers period of cooperation with distribution channels invigorate of adopting innovations already introduced in the market swiftness of adopting innovations not yet introduced in the market rate of support the groundwork for creation of a process-based organization Learning and harvest-tide PPH ADP Ppr Upl Ide OEE EDO DoCS DoCDC SoAIaI SoAInI sgepo Per capita presented lead, per capita judge suggestions per capita executed suggestions rate of training hours rate of training section efficiencyFrequency rate of accident hardship rate of accident rate of admission charge to IT per capita non-cash b onus rate of investiture in new technology rate of innovative products and serve exchange of information with co-operative companies forwarding of common business plans with co-operating companies Cooperative companies monitor Collaboration and information exchange in the organization Pps Pas Pes Rth Rtse FRA SRA Rai PNCB InvTech IPS FExCO FPCBT CCM FCoEx * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Source 1-factors from international standardSource 2-factors from customer viewpoint Source 3-factors pore on stakeholder viewpoint Source 4-factors from literature review questioning main hypotheses in balanced scorecard logic. Indeed, we tried to date a real evidence for this claim. The questioned data in TOSN, manufacturer of automotive parts using balanced scorecard for 3 years, confirms this claim in some aspects. Results of presented hypotheses were as follows: interrelations between growth perspective a nd internal processes perspective was almost 0. 96. Also, interrelation between processes perspective and costumer perspective was 0. 824. Interrelation etween costumer perspective and financial perspective was 0. 781(results are shown in Table 8). Therefore, in this company there is a occult and 12526 Afr. J. Bus. Manage. Table 2. Selected factors related to evaluating BSC perspectives in this article. Factor Financial perspective Sales margin Abbreviation Label Sm F customer perspective Market share Perceived level of quality Perceived level of trust to the products After-sales service Perceived level of service Brand awareness Brand image Perceived value of money MSh PLoQ PLoT AfSS PLoS BA BI PVoM c1 c2 c3 c4 c5 c6 c8 c8 Internal business and production process perspectiveEffective dispatching of orders (in terms of price, specifications and delivery time) degree of cooperation with suppliers degree of cooperation with distribution channels travel rapidly of adopting innovatio ns already introduced in the market press forward of adopting innovations not yet introduced in the market come in of support the groundwork for foundation of a process-based organization EDO DoCS DoCDC SoAIaI SoAInI Sgepo p1 p2 p3 p4 p5 p6 Learning and growth perspective regularise of investment in new technology Rate of innovative products and services Exchange of information with co-operative companiesPromotion of common business plans with co-operating companies Collaboration and information exchange in the organization Rate of training hours Rate of training section efficiency Cooperative companies monitoring InvTech IPS FExCO FPCBT FCoEx Rth Rtse CCM l1 l2 l3 l4 l5 l6 l7 l8 Table 3. Number of factors in each perspective. Number of factor 1 8 6 8 23 Perspective Financial perspective Customer perspective Internal business and production process perspective Learning and growth perspective correspond and positive relationship between non-financial factors of the model. Accord ing to BSC model, Kaplan and Norton claimed hat outcomes of optimizing performance of learning and growth perspective are evident in better performance of internal business processes. This would accordingly have a positive effect on costumer perspective, and finally improves financial performance. Kaplan and Norton did not investigate the different relationship between all perspectives. In this article, we assessed all the relationships between perspectives to determine the cause and effect relationship between all perspectives. Our research resulted in amazing conclusion. We found the relationship between business processes and financial perspective impregnable.Interrelation between financial perspective and internal Mahdieh and Pedram. 12527 Figure 2. Effect of factors of BSC on each other. Table 4. The importance rate of each factor in the learning perspective. L1 1 0. 854(**) 0. 933(**) 0. 938(**) 0. 947(**) 0. 969(**) 0. 968(**) 0. 959(**) 0. 975(**) L1 L2 L3 L4 L5 L6 L7 L8 L L2 0. 854(**) 1 0. 959(**) 0. 948(**) 0. 868(**) 0. 891(**) 0. 922(**) 0. 903(**) 0. 938(**) L3 0. 933(**) 0. 959(**) 1 0. 968(**) 0. 934(**) 0. 937(**) 0. 954(**) 0. 954(**) 0. 978(**) L4 0. 938(**) 0. 948(**) 0. 968(**) 1 0. 928(**) 0. 957(**) 0. 976(**) 0. 955(**) 0. 984(**) L5 0. 947(**) 0. 868(**) 0. 34(**) 0. 928(**) 1 0. 911(**) 0. 934(**) 0. 957(**) 0. 961(**) L6 0. 969(**) 0. 891(**) 0. 937(**) 0. 957(**) 0. 911(**) 1 0. 987(**) 0. 958(**) 0. 978(**) L7 0. 968(**) 0. 922(**) 0. 954(**) 0. 976(**) 0. 934(**) 0. 987(**) 1 0. 963(**) 0. 990(**) L8 0. 959(**) 0. 903(**) 0. 954(**) 0. 955(**) 0. 957(**) 0. 958(**) 0. 963(**) 1 0. 982(**) L 0. 975(**) 0. 938(**) 0. 978(**) 0. 984(**) 0. 961(**) 0. 978(**) 0. 990(**) 0. 982(**) 1 Table 5. The importance rate of each factor in the process perspective. P1 P2 P3 P4 P5 P6 P P1 1 0. 852(**) 0. 918(**) 0. 765(**) 0. 916(**) 0. 865(**) 0. 962(**) P2 0. 852(**) 1 0. 663(**) 0. 951(**) . 925(**) 0. 853(**) 0. 920(**) P3 0. 918(**) 0. 663(* *) 1 0. 580(**) 0. 736(**) 0. 683(**) 0. 827(**) P4 0. 765(**) 0. 951(**) 0. 580(**) 1 0. 824(**) 0. 738(**) 0. 827(**) P5 0. 916(**) 0. 925(**) 0. 736(**) 0. 824(**) 1 0. 939(**) 0. 968(**) P6 0. 865(**) 0. 853(**) 0. 683(**) 0. 738(**) 0. 939(**) 1 0. 958(**) P 0. 962(**) 0. 920(**) 0. 827(**) 0. 827(**) 0. 968(**) 0. 958(**) 1 Table 6. The importance rate of each factor in the customer perspective. C1 C2 C3 C4 C5 C6 C7 C8 C C1 1 0. 979(**) 0. 959(**) 0. 872(**) 0. 953(**) 0. 945(**) 0. 806(**) 0. 820(**) 0. 938(**) C2 0. 979(**) 1 0. 948(**) 0. 891(**) 0. 947(**) 0. 53(**) 0. 855(**) 0. 876(**) 0. 965(**) C3 0. 959(**) 0. 948(**) 1 0. 849(**) 0. 972(**) 0. 960(**) 0. 705(**) 0. 733(**) 0. 898(**) C4 0. 872(**) 0. 891(**) 0. 849(**) 1 0. 873(**) 0. 933(**) 0. 879(**) 0. 878(**) 0. 956(**) C5 0. 953(**) 0. 947(**) 0. 972(**) 0. 873(**) 1 0. 970(**) 0. 733(**) 0. 764(**) 0. 917(**) C6 0. 945(**) 0. 953(**) 0. 960(**) 0. 933(**) 0. 970(**) 1 0. 804(**) 0. 829(**) 0. 961(**) C7 0. 806 (**) 0. 855(**) 0. 705(**) 0. 879(**) 0. 733(**) 0. 804(**) 1 0. 985(**) 0. 935(**) C8 0. 820(**) 0. 876(**) 0. 733(**) 0. 878(**) 0. 764(**) 0. 829(**) 0. 985(**) 1 0. 946(**) C 0. 938(**) 0. 965(**) 0. 898(**) . 956(**) 0. 917(**) 0. 961(**) 0. 935(**) 0. 946(**) 1 ** Correlation is meaningful at the 0. 01 level (2-tailed). processes of production and business was positive and equal to 0. 946. Based on this finding, we tried to determine the reason for this relationship. For this aim, we considered all the factors of each perspective and we evaluated these detailed relationship. Interrelation between factors of process perspective and financial 12528 Afr. J. Bus. Manage. Table 7. The relationship between main perspectives. L P C F L 1 0. 967(**) 0. 888(**) 0. 950(**) P 0. 967(**) 1 0. 824(**) 0. 946(**) C 0. 888(**) 0. 824(**) 0. 771(**) F 0. 950(**) 0. 946(**) 0. 771(**) 1 ** Correlation is significant at the 0. 01 level (2-tailed). Table 8. The relationship between each factor of one perspective with the next perspective. Relationship between factors of learning perspective and three other perspectives Learning factor exploit Customer Financial ** ** ** L1 0. 971 0. 793 0. 968 ** ** L2 0. 854 0. 967 0. 827** ** ** L3 0. 921 0. 916 0. 911** ** ** L4 0. 951 0. 917 0. 914** ** ** L5 0. 910 0. 793 0. 929** ** ** L6 0. 984 0. 852 0. 944** ** ** L7 0. 977 0. 884 0. 945** L8 0. 947** 0. 843** 0. 932** Relation Strongly veritable Moderately authenticStrongly authentic Strongly pass judgment Moderately recognised Strongly reliable Strongly authentic Strongly true Relationship between factors of process perspective and three other perspectives Process factor Learning Customer Financial Relation P1 0. 880** 0. 740** 0. 889** Direct relationship P2 0. 940** 0. 964** 0. 849** Strongly trustworthy P3 0. 687** 0. 547** 0. 729** Direct relationship P4 0. 869** 0. 968** 0. 765** Strongly accepted ** ** P5 0. 934 0. 817 0. 888** Direct relationship P6 0. 960** 0. 752** 0. 936** Direct relationship Relationship between factors of customer perspective and three other perspectives Customer FactorLearning Process Financial Relation C1 0. 753** 0. 711** 0. 822** Strongly accepted C2 0. 821** 0. 775** 0. 696** Not accepted C3 0. 656** 0. 579** 0. 803** Strongly accepted ** ** C4 0. 506 0. 525 0. 677** Strongly accepted C5 0. 628** 0. 664** 0. 531** Not accepted C6 0. 748** 0. 663** 0. 600** Not accepted ** ** C7 0. 957 0. 936 0. 961** Strongly accepted C8 0. 921** 0. 923** 0. 937** Strongly accepted perspective as a whole was the greatest level of interrelation between financial and non-financial factors. As it was earlier demonstrated, there is a strong direct relationship between business process perspective and inancial perspective. This relationship has not been declared as a direct relation in Kaplan and Norton Model; whilst its more(prenominal) abbreviation will be reusable regarding its senior laid-back school occurrence rate, factors p1, p3, p5, p6 are the main reason for such strong correlation between business processes perspective and financial perspective. It shows that although, according the model, the relations are series like and bottom-up, there are other relations amongst perspectives as well which must be considered. More detailed outline of such relations may be posed as the following: P1 higher(prenominal) correlation with the financial perspective:Effective dispatching of orders (in terms of price, specifications and delivery time) with financial perspective; given the status quo of the company, relation of this factor with financial perspective is so that more Mahdieh and Pedram 12529 Figure 3. The relationship between four perspectives in BSC. Figure 4. The relationship between main perspectives factors. attention to this factor will lead to faster payment by the customer and hence improvement of financial status of the company. market with financial perspective; this factor relates to R and D field. And regarding its high importance for the ustomer, it will result in faster payment and also will create direct relationship with financial perspective. P3 high correlation with the financial perspective: Degree of cooperation with distribution channels, with financial perspective; this factor affects on p1 factor and improves the performance in terms of financial perspective. P5 high correlation with the financial perspective: bucket along of adopting innovations not yet introduced in the P6 high correlation with the financial perspective: Rate of supporting the groundwork for establishment of a process-based organization with financial; because of its elation with â€Å"activity based cost” (ABC) method, it has found relationship with processes and processes separation topics. Considering such direct relations between these two perspectives and their definitions, it can be concluded 12530 Afr. J. Bus. Manage. that although the offered relations in this model are ver ified in this case, all relations have not been considered in BSC model. 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