Balanced Scorecard in Managing Higher Education Institutions Essay

Balanced scorecards in managing higher education institutions: an Indian perspective Venkatesh Umashankar and Kirti Dutta Institute for International Management and Technology, Haryana, India Abstract Purpose – The paper aims to look at the balanced scorecard (BSC) concept and discuss in what way it should be applied to higher education programs/institutions in the Indian context. Design/methodology/approach – The paper is based on extant literature on the balanced scorecard concept per se, as well as applications of BSC in higher education as reported by other researchers.

Findings – The BSC approach offers an institution the opportunity to formulate a cascade of measures to translate the mission of knowledge creation, sharing and utilization into a comprehensive, coherent, communicable and mobilizing framework – for external stakeholders and for one another. Research limitations/implications – In the absence of any speci?c Indian case study, the possible impact could only be conjectured or deduced.

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Practical implications – A useful model is proposed that can be adapted with appropriate modi?cations to the management of tertiary institutions of education in India, whether it be a university, af?liate college, autonomous institution or private educational institution. Originality/value – In the absence of evidence of the application of BSC to the educational institutional domain in India, the current paper may be a starting-point for a debate and possible strategies to implement BSC methodology in this area.

Keywords Balanced scorecard, Strategic management, Higher education Paper type Conceptual paper 54 International Journal of Educational Management Vol. 21 No. 1, 2007 pp. 54-67 q Emerald Group Publishing Limited 0951-354X DOI 10. 1108/09513540710716821 Introduction Organizational failure can usually be traced to de?cient strategic planning, poor organization structure, recruitment and retention of staff, ineffective or nonexistent internal control, and a lack of communication and feedback.

On a more operational level, poor budgeting and inattention to cash-?ows are also often the cause of organizational failure. Educational institutions of higher learning are no different, it is just that in the Indian context, traditionally these institutions have been controlled by the government and hence at times strategic management and its derivative tenets are not so visible in the initiation and operation of such institutions.

Heimerdinger (2002) indicates a need for training perceived by non-pro?t managers that manifests the traditional concerns of human services professionals who ?nd themselves promoted into managerial positions without the bene?t of traditional formal training in management – referring to those tasks usually de?ned by such activities as planning, organizing, motivating and controlling and feedback. Subtending all of these is the need for leadership. If we juxtapose the above comment with the fact that educational institutions of higher learning in India, traditionally have been “administered” (managed) in a way in which academic staff ave been given apex positions in the administrative hierarchy, it does highlight this need for developing managerial capacity.

Universities world-over are facing the challenge of being centres of excellence for teaching as well as research. On one hand universities are increasingly being required to teach ever increasing number of students in increasing numbers of specialisations and disciplines, and on the other they are being asked to pay more attention to quality of teaching and educational programs (Smeby, 2003). This again indicates at the requirement to re-look at the ways institutions of higher learning are to be managed.

The current paper looks at focusing attention on one of the contemporary tools of management namely, the balanced scorecard (BSC), and tries to discuss how it may be bene?cial in the strategic management of the higher education institution in India. Tertiary education in India In India, the University system, as we see today, originated about a century and half ago with the establishment of universities at Calcutta, Madras, Bombay, Allahabad and Lahore between 1857 and 1902. These were modelled after the British Universities of that period.

The Central Advisory Board of Education’s (CABE) Committee on Autonomy of Higher Education Institutions (2005) in its report states that currently the Indian higher education system consists of 343 university level institutions and about 16,885 colleges and that there are many nagging concerns about its role and performance. Many of our reputed universities and colleges have lost their pre-eminent positions. Only a few manage to maintain their status and dignity in an environment of complex socio-economic pressures and worldwide changes in approaches to the educational processes.

Under the rapidly expanding situation with multiplicity of expectations from the higher education system, it has become necessary to identify those attributes, which distinguish a ?rst-rate institution from a mediocre one. The complex array of associated issues deserves a total rethinking of our approach to higher education. Serious efforts are now underway to develop the policy perspectives in education involving deeper national introspection and fundamental changes in the structure, content and delivery mechanisms of our university system.

The report further indicates that the enrolment in the Indian higher education system has increased from 7. 42 million in 1999-2000 to about 9. 7 million at present, indicating nearly 10 percent annual growth. The colleges account for about 80 percent of the enrolment with the rest in the university departments. Thus the programmes available in the college system largely determine the quality of our higher education. In the past decade there has been a sharp increase in the number of private colleges as well as universities with the status of either deemed to be universities or state universities.

The proportion of eligible age group wishing to enter higher educational institutions will most likely increase signi?cantly from the present level of about 7 per cent. The regulatory mechanisms will perhaps be liberalized. Higher education is continuing to expand, mostly in an unplanned manner, without even minimum levels of checks and balances. Many universities are burdened with unmanageable number of af?liated colleges. Some have more than 300 colleges af?liated to them. New universities are being carved out of existing ones to reduce the number of af?liated colleges.

Under these circumstances, our dependence on autonomy as the means to improve quality of such a huge size of higher education system poses serious challenges. Balanced scorecards 55 IJEM 21,1 56 Venkatesha (2003) compares and ?nds a lot of differences in the work-culture between the teachers of postgraduate departments of universities with those of colleges. In degree colleges, teaching is the only mandate and pertaining to this, teachers have to improve their knowledge in teaching by undergoing orientation and refresher courses, summer-camps, workshops and participating in seminars/symposia from time to time.

On the basis of these activities, teachers are considered for promotion to the next cadre. Some college teachers, who are interested in research may conduct research and publish papers. Research activity of college teachers is invariably out of their natural interest rather than a yardstick for their promotion unlike in universities. Once a university teacher acquires a PhD degree, many university teachers lapse into routine teaching assignments. Because of this type of dual role of teaching and research without de?ned guidelines, university teachers can neglect either teaching or research, or sometimes both.

In Indian universities, teachers are promoted based on their research publications, books written, papers presented in seminars/symposia, membership of various academic societies, etc. , but much importance has not been given to the teachers’ contributions towards teaching. This type of situation in our universities tempts many teachers to neglect teaching and take up some sort of research mostly uneconomical, unproductive, outdated and repetitive type and venture into the business of publishing substandard research articles.

The system normally recognizes quantity like number of PhD students guided, number of papers published, etc. rather than quality of the research and publications. Unfortunately, no concrete method has been developed so far to judge the teaching and research aptitude of university teachers. Some academicians argue that both teaching and research cannot be done at the same point of time. However, it is generally thought that education (even from undergraduate level) and research should coexist to complement each other.

Special emphasis on assessment-oriented teaching and research will impart a new dimension to the role of the teacher. Commenting upon the inherent contradictions in higher education and research in sciences, Chidambaram (1999) indicates towards a peculiar situation existing in the country. Wherein on one hand a large number of people are being given post-graduate degrees in science disciplines, without an appreciation of their possible future careers; on the other hand, there is a considerable reduction in the number of such talented and motivated students seeking admissions to science courses.

The dilution of resources that this irrelevant training represents has the consequence of deteriorating the quality of the training for the really talented people. Staying on with science education, Narlikar (1999) identi?es – poor methodology of science teaching that encourages rote learning, ill-equipped teachers and labs, lack of inspirational and committed teachers, poorly written text-books, peer pressure to join lucrative courses; as some of the causes of the current sickness that has af?icted the science scenario.

The romance of science and a proper and correct image is just not getting projected by our institutions or the universities. In his opinion this unfortunate trend can be reversed if the society displays a will and creates an environment to cure the causes of the deeply entrenched malady. Altbach (2005) provides an overview of the ailments af?icting the higher education machinery in India when he says that India’s colleges and universities, with just a few exceptions, have become “large, under-funded, ungovernable institutions”.

Many of them are infested with politics that has intruded into campus life, in?uencing academic appointments and decisions across levels. Under-investment in libraries, information technology, laboratories, and classrooms makes it very dif?cult to provide top-quality instruction or engage in cutting-edge research. Rising number of part-time and ad hoc teachers and the limitation on new full-time appointments in many places have affected morale in the academic profession.

The lack of accountability means that teaching and research performance is seldom measured with the system providing few incentives to perform. He goes on to say that India has survived with an increasingly mediocre higher education system for decades. Now as India strives to compete in a globalised economy in areas that require highly trained professionals, the quality of higher education becomes increasingly important. So far, India’s large educated population base and its reservoir of at least moderately well-trained university graduates have permitted the country to move ahead.

He concludes that the panacea to the ailments of Indian universities is an academic culture based on merit-based norms and competition for advancement and research funds along with a judicious mix of autonomy to do creative research and accountability to ensure productivity. He rightly says that “world class universities require world class professors and students – and a culture to sustain and stimulate them”. He recommends a combination of speci?c conditions and resources to create outstanding universities in India including: . sustained ?nancial support, with an appropriate mix of accountability and autonomy; . he development of a clearly differentiated academic system – including private institutions – in which academic institutions have different missions, resources, and purposes; . managerial reforms and the introduction of effective administration; and . truly merit-based hiring and promotion policies for the academic profession, and similarly rigorous and honest recruitment, selection, and instruction of students. Misra (2002) identi?es “management without objectives” as one of the key reasons of the downfall of the Indian university system.

He highlights the need for – adopting a functional approach in our universities; periodic academic audits; greater autonomy and accountability in all spheres of operations; open door policy welcoming ideas and people from all over; administrative restructuring decentralizing university departments and schools; and making education relevant to our people and times; as the basic steps in improving the Indian universities. The above discussion establishes the need for accountability based autonomy and being consistently relevant to the context in which the Indian universities (or any other university anywhere for that matter) may exist.

This creates the backdrop for adopting the basic tenets of strategic management in the paradigms of operating our universities. The balanced scorecard is one such basic tool that can certainly be of assistance in this rationalization process. The balanced scorecard Robert S Kaplan and David P Norton (1992) ?rst introduced the concept of balance scorecard in their Harvard Business Review article “The Balance Scorecard – Measures that Drive Performance”. Focussing on the fact that managers needed a balanced Balanced scorecards 57 IJEM 21,1 58 resentation of both ?nancial and operational measures they propounded four perspectives as the drivers of future ?nancial performance: (1) Customer perspective – how do customers see us? (2) Internal perspective – what must we excel at? (3) Innovation and learning perspective – can we continue to improve and create value? (4) Financial perspective – how do we look to stakeholders? The scorecard provides executives with a comprehensive framework that translates a company’s strategic objectives into a coherent set of performance measures.

It represents a fundamental change in the underlying assumptions about performance measurement and helps focus the strategic vision. According to Kaplan and Norton (1993) local improvement programs such as process reengineering, total quality and employee empowerment lack a sense of integration. The BSC can serve as the focal point for the organizations efforts. ISO Model for excellence introduced in 1987 aims to produce a product/ service “right ?rst time” by standardizing the functions in different departments and performing regular audits and continuous improvement is observed but it does not take the customers into account.

However scorecard takes customers as one of the perspective. It puts strategy and vision, not control, at the centre. It allows people to adopt whatever behaviour and whatever actions are necessary to arrive at these goals (Kaplan and Norton, 1992). Thus the whole arena is open for innovative ideas and action plans. The BSC is not just a measurement system; it is a management system to motivate breakthrough competitive performance and is most successful when used to drive the process of change (Kaplan and Norton, 1993).

Kaplan and Norton (1996b) say that in BSC application the management shifts from reviewing the past to learning about the future. It retains the measures of ?nancial performance – the lagging outcome indicators – but supplements these with measures and the drivers – the lead indicators – of future ?nancial performance (Kaplan and Norton, 2001a). Also, the evidence inconsistent with the BSC performance model triggers a double-loop learning process.

BSC’s widespread adoption and use is well documented, for example Kaplan and Norton (2001) reported that by 2001 about 50 per cent of the Fortune 1,000 companies in North America and 40-45 per cent of companies in Europe were using the BSC (cited in Karathanos and Karathanos, 2005). In 2001 Kaplan and Norton formulated a new framework namely, the “Strategy Map” – a comprehensive architecture for describing strategy. It provides a visual representation of the strategy and is a single page view of how objectives in the four perspectives integrate and combine to describe the strategy (Kaplan and Norton, 2004).

Application of BSC in education It is evident that the BSC has been widely adopted in the business sector but the education sector has not embraced the BSC concept widely as indicated by the dearth of published research on this topic (Karathanos and Karathanos, 2005). Cullen et al. , (2003) proposed that BSC be used in educational institutions for reinforcement of the importance of managing rather than just monitoring performance. Sutherland (2000), (cited in Karathanos and Karathanos, 2005) reported that the Rossier School of Education at University of Southern California adopted the BSC to assess its academic program and planning process.

Also Chang and Chow(1999) reported in a survey of 69 accounting departments heads that they were generally supportive of the BSC applicability and bene?ts to accounting education programs. Ivy(2001) studied how universities in both UK and South Africa use marketing to differentiate their images in the higher education market. At a time when higher educational institutions around the globe face declining student numbers and decreasing funding grants it becomes imperative for them to determine their images in the eyes of their various publics.

Karathanos and Karathanos(2005) describe how the Baldrige Education Criteria for Performance Excellence has adapted the concept of BSC to education and discuss signi?cant differences as well as similarities between BSC for Business and BSC for education. In higher education as in business there are acceptable conventions of measuring excellence. Rather than emphasizing ?nancial performance, higher education has emphasized academic measures.

As in the case of business the demands of external accountability and comparability, measurement in higher education has generally emphasized those academic variables that are most easily quanti?able (Ruben, 1999). These measures usually are built on and around such aspects as faculty/student numbers (ratios), demographics; student pass percentages and dispersion of scores; class rank, percentile scores; graduation rates; percentage graduates employed on graduation; faculty teaching load; faculty research/publications; statistics on physical resource (see library, computer laboratories etc. . Ruben(1999) indicates that one area deserving greater attention in this process of measurement is – the student, faculty and staff expectations and satisfaction levels. He opines that in most higher education centres very little attention is paid to systematically measuring students’, faculty and staff satisfaction despite sharing the widely accepted viewpoint that attracting and retaining the best talent/people is the primary goal and critical success factor for institutions of higher learning.

In a study conducted by Ewell, (1994) (cited in Ruben, 1999), the measures used in 10 states in the USA in performance reports of higher education institutions, were: . Enrolment/graduation rates by gender, ethnicity and program. . Degree completion and time to degree. . Persistence and retention rates by gender, ethnicity and program. . Remediation activities and indicators of their effectiveness. . Transfer rates to and from two and four year institutions. . Pass rates on professional exams. . Job placement data on graduates and graduates’ satisfaction with their jobs.

Faculty workload and productivity in the form of student/faculty ratios and instructional contact hours. Karathanos and Karathanos (2005) have compared the Baldrige Award and BSC criteria in the context of education and have come out with measures closely aligned amongst both the instruments (see Table I). Balanced scorecards 59 IJEM 21,1 Education 1. Student learning results: results should be based on a variety of assessment methods, should re?ect overall mission and improvement objectives. Should re?ect holistic appraisals of student learning 2.

Student and stakeholder focused result: student and stakeholder satisfaction measurements about speci?c educational program and service features. Delivery, interactions and transactions that bear upon student development and learning and the students and stakeholders future actions 3. Budgetary ?nancial and market results: instructional and general administration expenditure per student, tuition and fee levels, cost per academic credit, resources redirected to education from other areas, scholarship growth 4.

Faculty and staff results: innovation and suggestion rates; courses or educational programs completed; learning; on-the-job performance improvements; cross-training rates; collaboration and teamwork; knowledge and skill sharing across work functions, units and locations; employee well-being, satisfaction and dissatisfaction Business 1. Customer-focused results: customer satisfaction measurements about speci?c product and service features, delivery, relationships and transactions that bear upon the customers future actions 2. Product and service results: key measures or indicators of product and service performance important to the customers 0 3. Financial and market results: return on investment, asset use, operating margins, pro?tability, liquidity, value added per employee Table I. Expected measures in BSC and Baldrige criteria for education and business 4. Human resource results: innovation and suggestion rates; courses completed; learning; on-the-job performance improvements; cross-training rates; measures and indicators of work system performance and effectiveness; collaboration and teamwork; knowledge and skill sharing across work functions, units, and locations; employee wellbeing, satisfaction and dissatisfaction 5.

Organizational effectiveness results: (including 5. Organizational effectiveness results: (including key internal operations performance measures) key internal operations performance measures) productivity, cycle time, supplier and partner capacity to improve student performance, performance, key measures or indicators of student development, education climate, accomplishment of organizational strategy and indicators of responsiveness to student or action plan stakeholder needs, supplier and partner performance, key measures or indicators of accomplishment of organizational strategy and action plan 6.

Governance and social responsibility results: 6. Governance and social responsibility results: ?scal accountability, both internal and external; ?scal accountability, both internal and external; measures or indicators of ethical behaviour and measures or indicators of ethical behaviour and of stakeholder trust in the governance of the stakeholder trust in the governance of the organization; regulatory and legal compliance; organization; regulatory and legal compliance; organizational citizenship organizational citizenship Source: Karathanos and Karathanos, 2005

Applicability and design of BSC in the Indian environment Review of extant literature indicates that business organizations, as well as academic institutions, are fundamentally rethinking their strategies and operations because of changing environment demanding more accountability. The BSC is described as a novel approach to face these challenges (Dorweiler and Yakhou, 2005). The strategies for creating value in education need to be based on managing knowledge that creates and deploys an organization’s intangible assets.

The scorecard de?nes the theory of the business on which the strategy is based hence the performance monitoring can take the form of hypothesis testing and double-loop learning. A good BSC should have a mix of outcome measures and performance drivers (Kaplan and Norton, 1996b). ` Marketing and communication strategies vis-a-vis institutions of higher education assume greater import as the image portrayed by these institutions plays a critical role in shaping the attitudes and perceptions of the institution’s publics towards that institution (Yavas and Shemwell, 1996).

In India, for instance, institutions of higher education are becoming increasingly aggressive in their marketing activities. In this increasingly competitive environment, the marketers of higher education should be concerned about their institution’s positioning and image. The marketing of educational programmes has attracted attention of researchers who have identi?ed research-based planning and programme development, relationship marketing and non-traditional methods for education delivery as key areas for future focus (Hayes, 1996).

Some of the reasons for marketing of higher education gaining importance in the management of higher education programs and institutions are – the founding missions being found increasingly ill-suited for the demands of the marketplace; budgets becoming excruciatingly tight while departments and programmes clamouring for more support; the recruiting and fund-raising arenas having become extremely competitive as well as hostile; higher education being more and more dominated by many largely undifferentiated colleges and universities offering similar programmes; demographic shifts in the operating environment marked by diminishing numbers of traditional full-time students, fewer full-pay students and fewer residential students; escalating demand for adult higher-education and continuing and special-focus programmes; and last but not the least, the sharp rise in the cost of higher education (Kanis, 2000). In India too recently as liberalization has progressed, although in ?ts and starts, governmental support to institutions of higher learning in the form of grants and subsidies, is drying up. The movement of self-sustenance is gaining force. This also adds up and forces managers of educational institutions, especially in the public domain, to re-think their mission and strategies (Venkatesh, 2001).

Ruben(2004) says that students are affected not only by the teaching environment but also by the learning environment, which includes facilities, accommodation, physical environment, policies and procedures, and more importantly, interpersonal relations and communication and from every encounter and experience. Hence the faculty, staff and administrators have to set good examples by their deeds and recognize that everyone in an institution is a teacher. Keeping in mind that the continual self-examination by institutions should focus on the institution’s contribution to students’ intellectual and personal development, we can propose the following model (Tables II-V) for BSC in the Indian higher ducation scenario largely based on the analysis of the ?ndings presented variously by (Chang and Chow, 1999; Stewart and Carpenter-Hubin, 2000, Ivy, 2001; Cribb and Hogan, 2003; Karathanos and Karathanos, 2005). As depicted in the construct above a wide range of stakeholders and their diverse claims/interests and objectives have to be addressed in the context of the institution of higher education in India. The customer perspective is supposed to aim at the immediate needs and desires of the students, parents, faculty and staff, alumni, the Balanced scorecards 61 IJEM 21,1 Objective Students/parents Highly valued program Quality academic advising Flexible course scheduling Quality instruction Effective student placement

Measures External rankings in press, percentage of enrolment out of applications Student evaluation of advising Student satisfaction survey Alumni evaluation, graduating student survey Accreditation, recruiter evaluation, professional exam-passing rate Percent of students with job offer at graduation No. of companies recruiting on campus, average starting salaries Salary growth over period of time Courses or educational programs completed Knowledge and skill sharing across work functions, units and locations Employee wellbeing Alumni feedback Alumni satisfaction survey Number of students hired Number of job offers per student Average salaries offered Number of people bene?ting from training programs conducted by institution Grants/endowments garnered from industry Numbers of alumni in public service, community service, NGOs Philanthropic record of alumni, faculty, staff Legally clean record of alumni, faculty, staff 62

Faculty/staff Growth opportunities Learning opportunities Alumni Knowledge updation with passage of time Knowledge reinforcement Corporate Hiring quality students Knowledge extension i. e. research, consultancy, training, continuing education related linkages Table II. Component one: customer perspective – including students, faculty, staff, alumni, parents, and corporations Society Good citizenship Objective To achieve continuous improvement of services, facilities and resources To improve new product and service development Quality assurance Internship program Table III. Component two: internal business perspective: student/stakeholder focus Cost ef?ciency Unique or specialized curriculum

Measures Meeting service standards, response time to customer; service facilities to staff Number of new products and services introduced i. e. new courses, syllabi, programs and curriculum changes Distribution of grades awarded, exit exam or student competency evaluation Number of internships available, number of companies available, student evaluation Faculty-to-student ratio, educational expenses per student Number of faculty in specialized area, number of schools offering the same program Objective Faculty professional growth Staff motivation and development Incorporating technology into teaching Innovation in teaching Curriculum innovation Partnering with corporations for campus recruitment Organizational citizenship Resource management

Measures Number of faculty presentations at conferences; number of faculty presentations; number of seminars attended, travel budget for conference attendance Percent of budget spent on staff development; staff satisfaction index in staff survey; number of cross-trained or multi-skilled staff Number of courses incorporating new technology Number of teaching workshops attended by faculty, number of teaching innovation projects Number of curriculum revisions in last ?ve years; number of new courses offered in last ?ve years Number of ?rms involved; number of joint activities Academic excellence; increased research productivity; increased outreach to community Number of campus partnerships; entrepreneurial initiatives; trends in energy use Balanced scorecards 63 Table IV. Component three: innovation and learning perspective: faculty and staff, organizational effectiveness, social responsibility Objective Prosper Succeed Grow Survive Maximize asset utilization Measures Annual grants; amount of permanent endowment Enrolment trend Enhancement in student intake Level of student enrolment; funding per student More ef?cient and effective use of facilities, space, services, systems and resources as measured by various usage studies and statistics Table V.

Component four: ?nancial perspective corporate sector and the society at large. It is relevant here to state that looking at students solely as customers becomes a sort of a misnomer as they are also (if not only) the “throughput” that eventually gets processed in the institution and ends up accepted (or rejected) at the verge of graduation. Hence the corporation and society at large should be considered as the real customers. The second component involves the internal business or operations perspective. This inherently focuses on the implementation and delivery of the academic, research and other programs by the institution and the degree of excellence achieved in the same.

The innovation and learning perspective of the organization looks at the development of faculty and staff as a precursor and foundation to excellence in program design and delivery. Finally, the fourth component constitutes of the ?nancial performance and its measure. It is clear in the Indian context especially, that the government although eschews the “pro?t” word for educational institutions, however is emphasizing more and more on self sustaining programs and institutions as a desirable outcome of the strategies and models envisaged and pursued by universities and colleges. Surpluses are important as only then institutions can look for achieving greater autonomy in designing and delivering ever new courses and programs that are relevant to the population in IJEM 21,1 64 context, but expensive to implement.

Figure 1 proposes a schematic model of BSC for institutions of higher education in India, based on the model designed by Kaplan and Norton (2001). Kaplan and Norton (1996a) say that companies are using scorecard to: . clarify and update vision and strategic direction; . communicate strategic objectives and measures throughout the organization; . align department and individual goals with the organization’s vision and strategy; . link strategic objectives to long term targets and annual budgets; . identify and align strategic initiatives; . conduct periodic performance reviews to learn about and improve strategy; and . obtain feedback to learn about and improve strategy. All the above bene?ts are relevant in the context of the institutions of higher learning in India.

As Pandey (2005), indicates – “a good aspect of BSC is that it is a simple, systematic, easy-to-understand approach for performance measurement, review and evaluation. It is also a convenient mechanism to communicate strategy and strategic objectives to all levels of management”. According to Kaplan and Norton (2001) the Figure 1. Proposed balanced scorecard model for institutions of higher education based on Kaplan and Norton (2001) most important potential bene?t is that BSC aligns with strategy leading to better communication and motivation which causes better performance. Considering the linkages in service management pro?t chain (Heskett et al. 1994 cited in Kaplan and Norton, 2001) we can say that the potential bene?ts can be: . investments in faculty and staff training lead to improvements in service quality; . better service quality leads to higher customer (stakeholder) satisfaction; . higher customer satisfaction leads to increased customer loyalty; and . increased customer loyalty generates positive word of mouth, increased grants/revenues and surpluses that can be ploughed into the system for further growth and development. With growing popularity for Indian Engineers and graduates in job employment abroad (Chhaparia, 2006), India has to build world-class quality into higher education.

In fact, a critical test of a scorecard’s success is its transparency: from the 15-20 scorecard measures, an observer is able to see through the organizations corporate strategy (Kaplan and Norton, 1993). Thus if Higher education institutions apply the BSC to their organization they will be able to position their students and programs positively in the minds of the international audience. Conclusion Universities need to be consciously and explicitly managing the processes associated with the creation of their knowledge assets and to recognise the value of their intellectual capital to their continuing role in society and in a wider global marketplace for higher education (Rowley, 2000).

Translating the BSC to the complex world of academia is a challenge (Ruben, 1999). There are some critical success factors highlighted for higher education institutions in India. These factors are critical because if they are executed properly, the institution will achieve excellence in its chosen ?eld(s). It serves as a driving force to move institutions towards their goals. In the process of reaching these goals, the institutions are confronted with many barriers that are dif?cult to overcome however, many barriers originate from the institutions organizational members themselves by way of resistance to change, fear of accountability and its derivative pressure, lack of commitment and fear of failure.

If quality can be nurtured into the senses of all the functionaries in the institutions, then organizational members will engage in the cooperation and commitment required of them (Kanji et al. , 1999). The BSC approach offers an institution the opportunity to formulate a cascade of measures to translate the mission of knowledge creation, sharing and utilization into a comprehensive, coherent, communicable and mobilizing framework – for external stakeholders and for one another. The current state of Indian universities and other institutions of higher learning can bene?t through the application of balanced scorecards to cull out areas that they need to urgently focus upon and design appropriate strategies.