Bewertung des Arabian Journal of Business and Management

The Effect of Balanced Scorecard on the Financial Performance of Palestinian Banks

Abstract

Raed Ahmad Abu Eid

This study explored the impact of BSC on the financial performance of Palestinian banks on four standpoints: innovation; growth and learning; the financial point of view; internal business processes; and customers. The population taken in this study was 14 banks of Palestine. 130 participants were given questionnaires. They included directors, departmental heads, managers, and controllers of finance. The confidence interval was 95% and the test used was Multiple Linear Regression. There were three important variables named financial viewpoint; inside the business procedure viewpoint; and revolution, the perspective of knowledge and development. It was the most significant outcome of this study that (1) the financial development of the Palestinian banks can be enhanced by the BSC model, (2) the effect of customers’ viewpoint in the BSC model is not similar to that of other standpoints. Furthermore, (3) the banks in Palestine use clear measures of strategic performance for measuring performance including conventional financial and non-financial measures and it was noticed that this use of measures doesn’t indicate that they utilize them in the supervision of BSC concern. These measures can be classified under the four major classes of perspectives of the BSC model. The important suggestions are as follows (1) BSC should be executed as a unified system of strategic management in banks. (2) There is a need to give additional attention to strategy and measures included in the BSC’s perspective of customers. (3) There is a need to carry out more exploration of the impact of using BSC as a premeditated development tool on the financial work performance of Palestine’s banks.