University of the Cordilleras
Baguio City
Title: The Balanced Scorecard Approach to Measuring Cooperative
Performance: Implications for Multipurpose Cooperatives in Baguio
City
Academic Program: BS Management Accounting
Authors: Bautista, Marianne Daphne
Cabangcala, Kyla Clair
Eugenio, Nino Albert
Lopez, Naslie Faith
Mangupag Janella Mae
Background of the Study
A cooperative's ability to achieve its objectives in a
challenging and competitive business environment depends not only on
its set strategy but also on how well it is implemented. Performance
measurement is necessary for the implementation of this approach,
and it is one of the most crucial components for cooperatives.
A cooperative is a self-governing association of people who
have come together voluntarily to meet their common social,
economic, and cultural needs and aspirations via a collectively
owned and democratically controlled enterprise. Cooperatives are
superior forms of organizations with noble missions and goals,
striving to improve social economic condition for the members. This
type of organization is considered important all over the world
(Ajates, 2020).
The formation of cooperative firm is purposely to provide the
need of members with continuing focusing on ensuring benefits to
member and retains a sufficient profit to own operations as an
enterprise. Therefore, cooperatives are business enterprise that
owned, controlled, and aimed for the benefits of their members,
provide different objectives than investor-owned company
(shareholder value-oriented firms), as profit maximizes (Soboh, et
al., 2011).
The cooperative movement has, however, for a long period of
time been burdened with serious weaknesses and problems. The three
basic weaknesses are: the economic viability of the major activities
undertaken, the cooperative leadership and management capacity, and
the lack of democratic control by the members.
In a cooperative organization there are many activities
carried out by management (administrators, supervisors, managers and
employees) to improve cooperative performance. To be able to carry
out these activities, a comprehensive management system is needed,
starting from strategic planning, organizing, operating and
controlling. With the availability of this management system, it is
hoped that the cooperative will be truly ready to carry out the
demands of its members regarding services to members. Thus, the
placement of the interests of members and the welfare of members is
the main objective of the cooperative, so that the cooperative will
have a more focused perspective on a perspective that is able to
reflect and accommodate the important position of members and the
welfare of its members.
The Balanced Scorecard (BSC) is a strategic performance
management system used by numerous multinational corporations
worldwide to integrate both financial and non-financial metrics. The
BSC is a comprehensive, flexible assessment and management system
driven by strategic orientation and external competitive
environment, ensuring a balance between financial and non-financial
measures.
According to Kaplan and Norton (2004), the four perspectives
of Balanced Scorecard (BSC) are financial, customers, internal
business process and learning in growth. BSC is a mechanism of the
management system that can translate the vision and strategies of an
organization into real actions in the field. BSC is one of the
management instruments that have been proven to have helped many
corporations in implementing their business strategies.
The BSC, a widely adopted performance management tool, has
been shown to be popular among organizations (Rigby & Bilodeau,
2018). According to the 2018 Bain and Company survey, it was one of
the 25 most commonly used tools. However, few research has explored
its applicability in cooperatives (Estiasih, 202; Subarkah, 2021;
Muda et al., 2018). Zachow et al. (2019) conducted a literature
review, finding that studies on BSC in cooperatives were limited,
indicating its potential and usefulness.
With the Balance Scorecard, managers are able to measure
company performance by balancing the measurement of financial
aspects and non-financial aspects in creating current value while
considering future interests. However, performance measurement using
the Balanced Scorecard is more often applied in profit-oriented
companies and is rarely applied to non-profit-oriented companies or
organizations with special characteristics, such as cooperatives
(Mutasowifin, 2002)
Cooperatives, like every other entity, must plan and control
operations to achieve their goals. Because of their distinct
characteristics, cooperatives concentrate not only on achieving a
good financial status but also on providing social support to their
members and the community where they operate. As they are also
considered a catalyst for economic development, evaluating the
performance of cooperatives using the BSC framework which considers
both the financial and non-financial aspects are only appropriate
and necessary to establish how well they operate (Maniego, 2024b).
Statement of the Problem
This study aims to determine the performances of the
cooperatives in Baguio using the balanced scorecard framework.
Specifically, it sought to answer the following problems:
1. What is the level of usage of Balanced Scorecard framework by
cooperatives?
2. What is the level of performance of cooperatives in terms of:
a. Financial Perspective
b. Members/Customers Perspective
c. Internal Business Process Perspective
d. Learning and Growth Perspective
3. Is there a significant difference between the level of usage of
BCS and the performance of cooperatives?
4. Is there a significant difference in the performance of
cooperatives between those who are and who are not utilizing the
BSC?
Scope and Delimitation
In this research, the implementation of the Balanced Scorecard
(BSC) framework in multipurpose cooperatives will be studied. The
BSC dimensions to be examined include the financial performance,
member satisfaction, internal business processes, and learning and
growth. The study will also assess the level of BSC usage among
cooperatives and its impact on overall performance. The study is
limited to multipurpose cooperatives registered under the
Cooperative Development Authority (CDA) in Baguio City as of 2024.
Data will be gathered through surveys with cooperative management
and members to assess their awareness, understanding, and
application of the BSC framework. Financial reports and internal
documents will also be analyzed to support the performance
evaluation.
This research will not cover single-purpose cooperatives, such
as agricultural or housing cooperatives. The study's findings will
be valuable for understanding how the BSC framework can improve
cooperative operations and guide strategic decision-making for
multipurpose cooperatives in Baguio City. However, results may not
be fully generalizable to cooperatives in other regions or of
different types.
Methods/Procedure
Research Design
This study use a descriptive research design to assess the usage and
performance of the Balanced Scorecard (BSC) framework in
multipurpose cooperatives in Baguio City. This design is appropriate
as it systematically describes and quantifies the current practices
related to Balanced Scorecard usage without manipulating any
variables. The goal is to provide a clear understanding of how the
Balanced Scorecard is applied by cooperatives managers and members
and to assess the performance metrics such as financial perspective,
member satisfaction
Sampling Procedure
The study adopts a systematic review process to explore the use of
the Balanced Scorecard (BSC) across various sectors, particularly
focusing on cooperatives. Researchers search for relevant academic
articles in databases such as Google Scholar, Sci-Hub, and libraries
using keywords like “Balanced Scorecard” and “Cooperative”. A
purposive sampling approach will be used to ensure cooperatives
registered under the Cooperative Development Authority (CDA) in
Baguio City of different sizes, sectors, and locations are included.
A sample of 10-15 cooperatives may be selected to provide a diverse
range of data. Managers and key members of each cooperative will be
invited to participate.
Data Collection
Surveys and questionnaires will serve as the primary tools for data
collection. Surveys and questionnaires will be distributed to
cooperative managers and employees to assess how they perceive the
Balanced Scorecard and its impact on their work. The survey will
contain Likert-scale questions measuring aspects such as the
Balanced Scorecard’s performance on financial perspective, member
satisfaction, learning and growth, and internal business process.
The Likert scale questions will measure various dimensions of BSC,
such as financial performance, member satisfaction, internal
business processes, and learning and growth, on a scale of agreement
(e.g., strongly agree to strongly disagree). This structured format
will provide quantifiable data that can be analyzed statistically.
Meanwhile, the open-ended questions will allow respondents to
express their opinions, concerns, or suggestions, offering richer
qualitative insights into how the Balanced scorecard performs
cooperative operations. Statistical software tools, such as SPSS or
Excel, will be used for data analysis. These tools will help manage,
organize, and analyze the large amounts of data generated from the
surveys, documents, and interviews. They will be crucial in
performing descriptive statistics, correlation analysis, regression,
and other inferential statistical tests needed to validate the
study’s findings.
Statistical Analysis
Statistical analysis will be performed to identify trends and
relationships between cooperatives and key performance of a Balanced
Scorecard such as financial perspective, member satisfaction,
learning and growth, and internal business process. Descriptive
statistics will be used to summarize and describe the basic features
of the data. Measures such as mean, median, standard deviation, and
frequency distributions will be used to provide an overview of
cooperative performance of Balanced Scorecard dimensions.
Correlation analysis will identify whether there is a significant
difference between Balanced Scorecard dimensions like financial
perspective, member satisfaction, internal business process, and
learning and growth and overall cooperative success. Additionally,
ANOVA test use to compare performance between cooperatives that use
Balanced Scorecard extensively and those that do not, identifying
significant differences in their performance levels.
Research Paradigm
INPUT PROCESS OUTPUT
Identified:
1. Level of usage Microsoft and Excel 1. Level of usage of
of Balanced Balanced Scorecard
Scorecard Likert Scale framework by
framework by cooperatives.
cooperatives SPSS 2. Level of
performance of
Purposive Sampling cooperatives in
2. Level of
approach terms of:
performance of
cooperatives in Descriptive – e. Financial
terms of: Correlation design Perspective
a. Financial f. Members/
Perspective Mean, Median, Customers
b. Members/ Standard Deviation Perspective
Customers g. Internal
Perspective Frequency Business
c. Internal Distribution Process
Business Perspective
Process h. Learning and
Perspective Growth
d. Learning and Perspective
Growth 3. Relationship
Perspective between the level
of usage of BCS
and the
performance of
cooperatives
4. Relationship in
the performance of
cooperatives
between those who
are and who are
not utilizing the
BSC.
Questionnaire
Demographics
1. In what sector does your firm operate?
2. What is the title or position you hold in your firm?
3. What is the number of employee in your organization?
Below 100
101-250
251-500
Over 500
4. Do you use balanced scorecard?
Yes No (proceed to SOP 4)
SOP 1. What is the level of usage of Balanced Scorecard framework by
cooperatives?
Decision-
making and Strongly Strongly
Agree Disagree
Decision- Agree Disagree
rationalizing
BSC helps me
approach
problems
BSC helps me
analyze why
problems occur
I use this
application to
check my
thinking
against the
data
I use this
application to
make sense out
of data
It supports me
rationalize my
decision
BSC helps me
explain the
decision
BSC will help
explicit
reasons for
decision
BSC will help
me to justify
your decision
It is helpful
for effective
decision
process
Coordination Strongly Agree Disagree Strongly
Agree Disagree
BSC help to
improve the
quality of
customer
service or
more
creatively.
Use BSC to
coordinate
activities
with others in
same work
group
USE BSC to
coordinate
with others in
different work
group.
BSC help me
deal more
strategically
with internal
or external
customers.
BSC will help
to communicate
with people
who report to
you.
BSC will help
to communicate
with people
who you report
to.
Performance Strongly Agree Disagree Strongly
Evaluation Agree Disagree
Do you find
financial
measures to be
more
appropriate to
present the
performance of
your
organization
than non-
financial
measures
In order to
exercise your
function do
you find
qualitative
information
more use than
quantitative
When the
result does
not match
performance
expectations
do you adjust
the
performance
management
system
Control System Strongly Agree Disagree Strongly
Agree Disagree
Do you agree
that the
valuation of
performance is
relatively
unimportant
when you
hiring the
right person?
Do you agree
that the good
culture in
your
organization
is helpful to
motivate
people to do
their best and
it could make
performance
measurement
essentially
useless?
How precisely
do these rules
and procedures
specify how
the tasks in
your
organizational
unit are to be
done?
How strictly
are these
rules and
procedures
enforced in
your
organizational
unit?
Do you agree
that the other
control tools
will
substitute
BSC?
The other
control tools
will
complementary
with BSC to
effectively
serve the
functions of
performance
measuring,
rewarding, and
assigning
rights and
responsibiliti
es.
SOP 2: What is the level of performance of cooperatives in terms of:
a. Financial Perspective
Very Satisfied Dissatisfied Very
Satisfied Dissatisfied
Financial
Returns
Profitability
Sales Growth
Cash Flow
Generated
Return on
Capital Employed
b. Members/Customer Perspective
Set of Values Very Satisfie Dissatisfie Very
Satisfie d d Dissatisfie
d d
Operates with
transparency
Is really interest
in its customers’
needs
Invests in
personnel’s training
Has a goal the
mutual benefit of
the cooperative, its
customers, the
employees and the
society
You feel that “it is
your bank”
Support Very Satisfie Dissatisfie Very
Satisfie d d Dissatisfie
d d
Treats all its
customers/members in
the same way.
Offers to its
customers more than
expected
Helps with the
development of local
societies
Implements programs
of
training/information
to its customers
Helps its customers
cope with financial
difficulties
Quality Price Very Satisfie Dissatisfie Very
Relationship Satisfie d d Dissatisfie
d d
Deposit interest
rates compared to
other banks
Better loan interest
rates and beneficial
loan terms
No charge for
expenses and
commissions
Other services e.g.
Fixed commands, bill
settlements,
insurance services
Number/range of
products and
services
Serviceability Very Satisfie Dissatisfie Very
Satisfie d d Dissatisfie
d d
Products adapted to
customers’ needs
Uses new
technologies and
modern systems
Promptness and speed
of service
Speed of response to
requests
Effectiveness of
problems solutions
Personnel Very Satisfie Dissatisfie Very
Relationship Satisfie d d Dissatisfie
d d
Trained
personnel/experts
Personnel willing to
serve the customer
They understand the
customers’ needs
Employees’ behavior
makes me feel secure
Friendly/polite
behavior of
personnel
Communication for Very Satisfie Dissatisfie Very
building trust Satisfie d d Dissatisfie
d d
Clear communication
with the terms of
cooperation with the
cooperative bank
Full information
about the documents
needed for a product
The bank has no
secret charges and
obscure wording of
terms
Detailed information
about
prices/products/term
s by the personnel
which makes me trust
them
I feel secure about
my transactions with
the bank
c. Internal Business Processes
Strongly Agree Disagree Strongly
Agree Disagree
Provides management with a
comprehensive picture of
business operations.
Measures how well the
company identifies the
customers’ future needs.
Creativity and unexpected
ideas increased.
Existence of quality
measures.
Existence of cycle time
measures.
Existence of costs
measures.
d. Learning and Growth
Strongly Agree Disagree Strongly
Agree Disagree
Human Capital
Knowledge Capital
Institutional
Capital
i. Human Capital
Very Satisfied Dissatisfied Very
Satisfied Dissatisfied
Employee
satisfaction
Developing
service quality
and service
production skills
– gaining new
skills
Increasing the
participation of
employees in
management
a. Employee Satisfaction
Job and Very Satisfied Dissatisfied Very
Organizational Satisfied Dissatisfied
Commitment
I am proud to work
for my
organization.
I would want to
work for long with
this organization
Overall, this
organization is a
good place to
work.
My salary level
compares well to
similar grades
within the same
field.
I feel fairly
compensated for my
work.
The benefits
offered by my
organization are
attractive.
Training and Very Satisfied Dissatisfied Very
Development Satisfied Dissatisfied
Opportunities
I am satisfied
with the training
provided by the
organization.
I am satisfied
with the amount of
training offered
for advancement
Employees are
given the
opportunity to
discuss any of the
work problems
I am involved in
setting my target
I am responsible
for planning my
work activities
Supervisor Support Very Satisfied Dissatisfied Very
and Competence Satisfied Dissatisfied
My immediate
supervisor is
technically
competent.
My immediate
supervisor is
competent on human
relations.
My supervisor
recognizes my
performance.
Performance
evaluations done
by my supervisor
are fair and based
on clear
performance
standards
Communication and Very Satisfied Dissatisfied Very
Feedback Satisfied Dissatisfied
The communication
I received from
the organization
is timely.
The communication
I received from my
organization is
accurate.
I receive regular
job performance
feedback.
I understand my
performance
evaluation
criteria.
Performance Very Satisfied Dissatisfied Very
Management and Satisfied Dissatisfied
Career Advancement
Work, objectives
and tasks are
clearly stated.
Performance
management in the
organization is
linked to reward.
Performance
management
meetings and with
a clear plan of
actions for the
future to which
employees agree.
I feel motivated
after performance
evaluation
meetings.
Promotions are
based on
performance
review.
I am satisfied
with the
organization
performance
management
practices.
ii. Knowledge Capital
Very Satisfied Dissatisfied Very
Satisfied Dissatisfied
Applying new
technologies
New service –
technology
leadership
supporting
partner
satisfaction
iii. Institutional Capital
Very Satisfied Dissatisfied Very
Satisfied Dissatisfied
Developing
continuous
improvement
culture following
the developments
in the cooperative
sector
Realizing a
concentric culture
ensuring
cooperative
partner
integration
Increasing
individual and
institutional
compliance
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