Could the balanced scorecard enhance pharmaceutical organisations’ quality performance?

Abstract

Purpose The purpose of this paper is to investigate the relationship between balanced scorecard (BSC) attributes and quality performance and the possible moderating effect of quality performance on the relationship between BSC and business performance. The positive findings from the multinational pharmaceutical organisations in Egypt may help the national pharmaceutical companies to improve their performance when incorporating the same tool (BSC) in their quality management system. Design/methodology/approach This research employs a quantitative approach to conduct a survey, and empirical data were drawn from 28 multinational pharmaceutical organisations in Egypt, 125 correct questionnaires were used for further analysis, and the research model was tested using the structural equation modelling technique by analysis of moment structures software. Findings The findings of the empirical research reveal that the BSC attributes significantly and positively relate to quality performance where strategy translated to operations has the strongest relationship, providing feedback/learning and communication have a moderate relationship, whereas alignment relation is negligible in the presence of other attributes. Additionally, BSC attributes have a significant positive relationship with business performance directly and indirectly and quality performance is the moderator. Also, the research suggests that the quality performance has a significant and positive relationship with business performance. Research limitations/implications The overall research implication is that the BSC certainly acts as a ground foundation for consolidating the quality management system. The BSC practices presented in this research emphasise that this tool is not just an integration of financial and non-financial metrics that measure performance; rather, it is a performance management system that reinforces the quality system and helps to harmonise the strategy and goals that leads to improvement in the performance levels. Practical implications The study shows that BSC practices support the organisational quality/business performances. Therefore, managers must develop and continuously refine their strategies, allocate sufficient resources for achieving targets of strategic measures, in order to achieve superior business performance. Originality/value Several studies approached the effect of some of BSC attributes on quality performance; yet, this research considers the association between the four attributes collectively with quality/business performance. Additionally, no previous research has comprehensively studied the moderating effects of quality performance on the relation between BSC and business performance, especially in pharmaceutical companies in Egypt.