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JAAF (Journal of Applied Accounting and Finance) Volume 2, Number 1, 2018, 1-17 1
The Effect of Using Balanced Scorecard on Competitive Advantage and Its Impact on
Firm Performance Lela Nurlaela Wati [email protected] , [email protected]
Economics Study Program STIE Muhammadiyah Jakarta, Jakarta, Indonesia Gunawan
Triwiyono [email protected] Economics Study Program STIE Muhammadiyah
Jakarta, Jakarta, Indonesia Abstract The paper is aimed to examine the effect of
balanced scorecard on competitive advantage and its impact to firm performance. The
samples of this research are companies that use balanced scorecard in DKI Jakarta as
many as 50 companies.
This research is uses primary data by giving questionnaires to corporate managers using
balanced scorecard. We use Structural Equation Model with SmartPLS. The result of this
research shows that there is positive effect between balanced scorecard to competitive
advantage. Finding also shows that there is positive effect between balanced scorecard
and competitive advantage to firm performance.
The research also proves that there is positive effect between balanced scorecard to firm
performance through competitive advantage. The findings of this study indicate that the
better the application of balanced scorecard in the company will increase the
competitive advantage and firm performance. Keywords: balanced scorecard,
competitive advantage, firm performance 2 The Effect of Using Balanced Scorecard The
Effect of Using Balanced Scorecard on Competitive Advantage and Its Impact to Firm
Performance Lela Nurlaela Wati [email protected] , [email protected] Economics
Study Program STIE Muhammadiyah Jakarta, Jakarta Selatan, Indonesia Gunawan
Triwiyono [email protected] , [email protected] Economics Study Program STIE
Muhammadiyah Jakarta, Jakarta Selatan, Indonesia Abstrak Artikel ini bertujuan untuk
meneliti pengaruh balance scorecard terhadap keunggulan kompetitif. Sampel
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penelitian ini adalah perusahaan-perusahaan yang menggunakan balance scorecard di
DKI Jakarta sebanyak 50 perusahaan.
Penelitian ini menggunakan data primer dengan cara mengirimkan kuisioner kepada
manajer perusahaan yang menggunakan balance scorecard. Peneliti menggunakan
Structural Equation Model – SmartPLS. Hasil penelitian ini menunjukkan bahwa ada
pengaruh positif antara balance scorecard terhadap keunggulan kompetitif.
Temuan lain adalah adanya pengaruh positif antara balance scorecard dan keunggulan
kompetitif terhadap kinerja perusahaan. Selain itu, hasil riset juga menyatakan adanya
pengaruh positif antara balance scorecard terhadap keunggulan kompetitif terhadap
kinerja perusahaan melalui keunggulan kompetitif. Temuan penelitian ini menunjukkan
penerapan balance scorecard di perusahaan akan meningkatkan keunggulan kompetitif
dan kinerja perusahaan.
Kata Kunci: balanced scorecard, keunggulan kompetitif, kinerja perusahaan JAAF
(Journal of Applied Accounting and Finance) Volume 2, Number 1, 2018, 1-17 3
INTRODUCTION In the globalization era, competition increasing tight in various
business fields, especially in big cities. The firm performance has always been a measure
of the company's success so that requires a method that can measure the performance
(Kaplan & Norton, 1996).
The importance of measuring performance appropriately, according to Keats & Hitt
(1988) because performance is a difficult concept, both the definition and measurement.
By knowing the performance condition then the company can make revisions to the
policies that are not relevant so that future achievement will be better. In assessing of
the firm performance, generally many companies still use the financial statements as the
only benchmark of business performance.
Performance appraisal from a financial perspective only can cause weaknesses, because
a good financial performance can be achieved by sacrificing the company's long-term
interests. The weaknesses are (1) not paying attention to the investment risk associated
with the cost of capital, (2) not describing the value creation for the company and (3)
short term oriented (Utama, 1997), so the use of financial ratios in the financial
statements is abandoned.
Due to the limitations of existing performance appraisals so Kaplan and Norton (1996)
formulates new method that can measure performance comprehensively, namely the
Balanced Scorecard (BSC). Performance measurement by Balanced Scorecard uses
several integrated perspectives, namely financial perspective, customer perspective,
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business process perspective and growth and learning perspective The creation of good
corporate performance cannot be separated from the competitive advantage owned by
the company.
The company's ability to create competitive advantage will strengthen the company's
position in long-term business competition. In achieving competitive advantage itself,
there are five dimensions that are used to assess how good a company's competitive
advantage is. The five dimensions of competitive advantage are price, quality,
dependable delivery, production innovation and time to market (Li et al.,, 2006).
One of the keys to successful implementation of Balanced Scorecard is the full support
of every layer of management that exists within the organization. An opinion under the
Balanced Scorecard can help a company to manage changes, as well as helping
managers to develop all modes of evaluation that affect company value (Bermser, 1999;
Norreklit, 2003; Davis & Albright, 2004).
Firm performance refers to how well an organization achieves goals with market
oriented as well as financial goals (Yamin et al.,, 1999). A number of previous studies
have measured firm performance using financial criteria and market criteria, (Vickery, et
al.,, 1999, Wati, et. al., 2016). However, according to Neely (1999) firm performance can
be measured by financial and non-financial indicators.
Venkatraman & Ramanujam (1986) said that the firm performance has three dimensions
of financial performance, operational performance and stakeholder performance. By
paying attention to the measurement of the firm performance, it can encourage efforts
to realize the goals, objectives, mission and vision of the organization that aims to
create maximum performance for the company.
Several previous studies have supported that the use of Balanced Scorecard within the
company has a positive effect on competitive advantage. The competitive advantage
improvement of a company will have an impact on improving the firm performance and
the use of Balanced Scorecard within the company gives a positive impact on the
improvement of firm performance (Sim & Koh, 2001; Kallas, 2006; Li et al.,
2006; Strohhecker, 2007: Tuan & Yoshi, 2010; Der & Hsu, 2011; Tewal, 2012; Prayhoego,
2013; Lokatili et al., 2013). Based on the above background, it can be formulated
problem as follows: 4 The Effect of Using Balanced Scorecard 1. Does the use of
Balanced Scorecard affect company's competitive advantage? 2. Does the use of
Balanced Scorecard affect firm performance? 3.
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Does the company's competitive advantage affect irm performance? 4. Does Balanced
Scorecard affect firm performance through competitive advantage? LITERATURE REVIEW
Balanced Scorecard The Balanced Scorecard is an approach to management strategies
developed by Robert Kaplan and Norton in the early 1990s. The Balanced Scorecard
comes from two balanced and scorecard words.
Balanced means a balance between financial and non-financial performance, short-term
performance and long-term performance, between internal performance and external
performance. While the scorecard is a card used to record a person's performance score.
The scorecard can also be used to plan the scores that want to be realized by person in
the future.
In its application, according to Kaplan and Norton (2006), Balanced Scorecard is
measured using four perspectives: financial perspective, customer perspective, internal
business perspective, and learning and growth perspective. While managing and
improving business processes, customers and employee satisfaction, the financial
perspective should also be enhanced due to this perspective is a measure of the end
result of organizational assessment (Bhasin, 2008) because financial performance
measures provide clues whether the company's stratey, itimentation ioor to ase
y’profitTh importance of customer focus and customer satisfaction is quite important in
the new management philosophy (Ahmadi et.al., 2012).
Recent management research has shown an increasing awareness of the importance of
customer focus and customer satisfaction in any business (Qin et.al., 2013). In the
internal business process perspective that is determining the process that satisfies the
company's shareholders and customers (Kaplan & Norton, 2001). The internal business
perspective focuses on whether an organization should perform customer needs well,
defined in the customer perspective (Ahmadi et.al., 2012).
The learning and growth perspective has measurement indicators related to the creation
of long-term growth and organizational improvement through workforce/employees,
system and organizing programs (Kaplan & Norton, 1996). Another thing that is gained
by applying the Balanced Scorecard method is the retention of workers, which is the
ability to retain the best employees or employees in the company. Because with this
method employee performance can be measured and assessed in futures.
As we have often heard that human resource is a long-term investment company.
Employee retention is measured by turnover percentage. Work productivity is also seen
by looking at the results of the overall impact of skills and moral enhancement,
innovation, internal processes and customer satisfaction. The purpose of it all is to
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connect the output produced by the worker to the number of workers who are
supposed to produce the output.
Competitive Advantage Competitive advantage is defined as the ability of an
organization to create a position to withstand its competitors and comprises an
organizational capability that allows an organization to differentiate itself from its
competitors and is a critical outcome of management decisions (Tracey et.al., 1999; Li
et.al., 2006). Competition is critical to a company's success or failure.
Competitive strategy is an attempt to find a favorable position in an industry, which is a
fundamental area in the process of JAAF (Journal of Applied Accounting and Finance)
Volume 2, Number 1, 2018, 1-17 5 competition. According to Porter (2005), competitive
advantage is about how a company actually implements generic strategies into practice.
Companies are said to be able to have sustainable competitive advantage when it can
apply value to create strategies that are different from current competitors or potential
competitors and when other companies cannot duplicate the benefits of this strategy
(Barney, 1991). Firm Performance Firm performance is a description of the financial
condition of a company that is analysed with the tools of financial analysis, so it can be
known about either the poor financial condition of a company that reflects the
performance of work within a certain period.
It is very important that resources can be used optimally to face environmental changes.
Assessment of financial performance is one way that can be done by the management
in order to fulfil its obligations to the funders and also to achieve the goals set by the
company.
Performance is a term generally used for part or all of the actions or activities of an
organization for a period with reference to standard amounts such as historical costs or
projected cost, on the basis of efficiency, accountability of management and the like
(Srimindarti, 2004). Whereas according to Mulyadi (2007) Performance is the success of
personnel, team, or organizational unit in realizing the predetermined strategic goals
with the expected behavior. Firm performance is all the activities undertaken by the
company related to the achievement of strategic management goals during a certain
period.
Performance measurement is also used to assess the achievement of goals and
objectives (Whittaker, 1993). There are several factors that affect performance.
According to Amstrong (1998) these factors are as follows: 1. Personal factors. Personal
factors are related to skill, motivation, commitment, etc. 2. Leadership factors.
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Leadership factors are related to the quality of support and direction given by leaders,
managers, or group work leaders. 3.
Group factors/co-workers (team factors). Group factors/co-workers are related to the
quality of support provided by co-workers. 4. System factors. System factors are related
to existing systems/methods of work and facilities provided by the organization. 5.
Contextual/Situational factors). Situational factors are related to pressure and
environmental changes, both internal and external environments.
A performance measurement system is a mechanism that improves the likelihood for a
company to have a successful strategy (Anthony and Govindarajan, 2003). Venkatraman
and Ramanujam (1986) argue that firm performance has three dimensions, that are
financial performance, operational performance and stakeholder performance. However,
according to Combs et.al (2005) and Higgins (1995), the most common types of
organizational performance measurements often used in empirical research are: 1.
Financial and Accounting Performance 2. Operational Performance 3. Performance
Based Market Hypothesis Chan (2004) examines the performance of municipal
governments in Canada and the United States. The study categorized city governments
into three categories: (1) not knowing BSC, (2) knowing BSC but not implementing it and
(3) implementing BSC.
These three categories give different results on the BSC perspective, in which city
governments implementing BSC have better performance. 6 The Effect of Using
Balanced Scorecard Kallas (2006) examined the implementation of Balanced Scorecard
in management strategy which resulted the finding that Balanced Scorecard positively
affect to competitive advantage.
Sim and Koh (2001), compared traditional performance measurement systems based on
financial indicators with the Balanced Scorecard and the effect of both systems on firm
performance. The results showed that there is a positive effect Balanced Scorecard and
performance measurement system associated with strategies and objectives in
improving firm performance. Strohhecker (2007) examined the effect of Balanced
Scorecard on firm performance.
The results of this study indicate that the use of Balanced Scorecard gives a positive
effect on firm performance. Tuan and Yoshi (2010), examined the organization's
capabilities, competitive advantage and organizational performance in boosting
companies in Vietnam. The results of Tuan and Yoshi's research showed that
competitive advantage had a positive and significant effect on firm performance. Li et.al.
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(2006), examined the effect of supply chain management on competitive advantage and
firm performance. One of the findings is that there is a positive effect of competitive
advantage on firm performance. Prayhoego (2013), examines the effect of Total Quality
Management on competitive advantage and firm performance.
In this research, it was found that there is significant effect between competitive
advantage to firm performance. Lokatili et al., (2013) conducted a research on the effect
of Balanced Scorecard on competitive advantage and firm performance in Indonesia, the
results showed that Balanced Scorecard positively effect to competitive advantage and
firm performance, as well as competitadvantapivelefto pce, thy n’t yzindi effect of
Balanced Scorecard on firm performance through competitive advantage.
So, our research aim to fill the gaps in the literature to exemine direct and indirect effect
of Balanced Scorecard to firm performance throught competitive advantage. The
following figure is a research framework. JAAF (Journal of Applied Accounting and
Finance) Volume 2, Number 1, 2018, 1-17 7 Source: Literature Review Figure 1: Research
Framework Based on the results of previous research and to fill the gap of previous
research on indirect effect, the authors formulate the following hypothesis: H1 = The
use of balanced scorecard has a positive effect on competitive advantage.
H2 = The use of balanced scorecard has a positive effect on firm performance H3 =
Competitive advantage positively affects on firm performance. H4 = The use of balanced
scorecard has a positive effect on firm performance through competitive advantage.
RESEARCH METHOD The sample in this research are companies that use Balanced
Scorecard in DKI Jakarta area as many as 50 companies.
This study uses primary data by giving questionnaires to corporate managers which
using Balanced Scorecard in DKI Jakarta area. Data analysis uses Structural Equation
Model with SmartPLS. The variables used in this research are Balanced Scorecard as
independent variable, competitive advantage as intervening variable, and firm
performance as dependent variable The following table 1 explains the operationalization
of variables: Balanced Scorecard Firm Performance Competitive Advantage H1 H 3 H 2 H
4 8 The Effect of Using Balanced Scorecard Table 1. Description of Variables Variables
Indicator Question Balanced Scorecard ? Financial Perspective 1. Use of BSC within the
company.
(Independent): Customer/Stakeholder 2. Measurement of four BSC perspectives to
measure performance Internal Process 3. Combining four BSC perspective
measurements for performance measurement ? Learning and Growth 4. U s i n g a cau s
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e -ef fect ap p r o ach b et w een BSC p er s p ect iv es i n per fo r man ce m e as ur em e
n t 5 .
In co r p or at e per for m an ce m e as ur em e n t s i n s t r at e gy i mp l e m en t a t i o
n 6 . Describe the strategy in detail 7. Setting multiple measurements before using BSC
8. Establish performance reporting system in BSC measurement 9. Monitor BSC
measurements 10. BSC is used so that employees understand what responsibilities
Competitive Advantages ? Strategic Advantages 1.
Offer competitive prices (Intervening) Operational Advantages ? 2. Offer prices that are
as low or even lower than competitors Tactical Advantages 3. Offer a high quality
product 4. Provide higher compensation 5. Delivering goods on time 6. Delivering
goods according to quantity and order 7. Provide products according to the wishes and
needs 8. Products with new features 9. Pioneer in introducing products to customers 10.
Move quickly in developing products Firm Performance (Dependent) Profit Margin 1.
Able to achieve return on sales Market Share 2. Able to achieve profits that have been
targeted Return on Sales 3. Able to achieve sales growth rate 4. Able to achieve
productivity levels that have been targeted 5. Able to achieve production cost that has
been targeted 6.
Able to achieve market share that has been targeted 7. Always introduce new products
8. Able to offer products / services accordingly 9. Able to cover the entire scope of
market share 10. Able to meet customer needs Source: Literature JAAF (Journal of
Applied Accounting and Finance) Volume 2, Number 1, 2018, 1-17 9 To test the research
hypothesis, the model used is as follows: C 1 BSC + e1 (1) FP = a 2 BSC + ß 3 CA + ß 4
BSCCA + e2 (2) To detect the effect of mediation, it can be done by a procedure
developed by Hair et. al. (2011).
The conditions in this test are: First, the direct effect must be significant when the
mediating variable has not been incorporated into the model. Second, after the
mediating variable is incorporated into the model, the indirect effect must be significant.
Each path must be significant to satisfy this condition. Third, calculate variance
accounted for (VAF) with the formula of indirect effect / total effect.
VAF is a measure of how much the mediating variable is able to absorb the previously
significant direct effect of the model without mediation. If the VAF value above 80%
indicates the role of the mediating variable as full mediation. If the VAF is worth
between 20% -80% then it can be categorized as a partial mediator.
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However, if the VAF is less than 20%, the researcher can conclude that there is virtually
no mediation effect (Hair et. al., 2011). RESULTS AND DISCUSSION Descriptive Analysis
The following table describes the industrial sector of the firms from respondents in this
study: Table 2. Industrial Sector Industrial Sector Frequency Percentage (%) Manufacture
8 16 Services 23 46 Retail 5 10 Finance 8 16 Others 6 12 Total 50 100 Source: Data
processed Based on the Table 2 above, it is known that from total of 50 respondents
who become the object of research is the industrial sector of the company It can also be
seen from the total of 50 companies there are 16% percentage for manufacturing
sector, 46% for service industry, 10% for retail industry, 16% for financial industry sector
and 12% for other industrial sectors.
The following is descriptive of work length of managers who became respondents in this
study: 10 The Effect of Using Balanced Scorecard Table 3. Work Length of Respondent
Work Length Frequency Percentage 1 – – Total 50 100 Source: Data processed Based on
Table 3, it is known that the length of work of the respondents is 1 - 4 years 56%, 5 - 8
years 40% and for> 9 years by 4%.
It can be concluded that the respondents in this study are managers who have been
working for more than 1 year. Below is the descriptive gender of the manager who
became the respondent in this study. Table 4. Gender of Respondents Gender
Frequency Percentage (%) Male 32 64 Female 18 36 Total 50 100 Source: Data
processed Based on the table above, it can be seen that the number of male and female
respondents are as much as 64% and 36% Descriptive of Respondents Answers In this
analysis the respondents' answers will be explained on each research variable, namely
Balanced Scorecard, competitive advantage and firm performance.
Description of the respondent's answer is done by calculating the mean value of the
respondent's answer to each question and overall. Class interval is used to categorize
the average respondent answers related Balanced Scorcard, competitive advantages and
firm performance: Table 5. The Average Category of Respondents' Answers Interval
Category Indication 4.20 < a= 5.00 3.40 < a= 4.20 2.60 < a= 3.40 1.80 < a= 2.60 1.00 <
a= 1.80 Source: Data processed JAAF (Journal of Applied Accounting and Finance)
Volume 2, Number 1, 2018, 1-17 11 Hypothesis Test Outer Model The relationship
between variables and indicators can be seen from the measurement model
(outermodel). Outer model evaluation is done to know the validation and reliability of
data.
Validation includes convergent validity and discriminant validity, and reliability is sought
through composite reliability. Convergent Validity The indicator is stated met the
convergent validity if it has a loading value above 0.5. Here are the results of convergent
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validity for Balanced Scorecard variables, competitive advantages and firm ferformance
in companies which implementing Balanced Scorcard in Jakarta. Source: Data processed
Figure 2: Outermodel Before Dropping the Indicators 12 The Effect of Using Balanced
Scorecard Table 6.
Value of the Beginning Outer Loading Balanced Scorecard Competitive Advantage Firm
Performance X1 0,698 Y1 0,562 Z1 0,558 X2 0,741 Y2 0,571 Z2 0,532 X3 0,600 Y3 0,605
Z3 0,802 X4 0,548 Y4 0,551 Z4 0,669 X5 0,403 Y5 0,555 Z5 0,801 X6 0,517 Y6 0,475 Z6
0,714 X7 0,621 Y7 0,640 Z7 0,665 X8 0,689 Y8 0,685 Z8 0,652 X9 0,737 Y9 0,726 Z9 0,604
X10 0,854 Y10 0,736 Z10 0,669 Source: Data processed SmartPLS (2017) Based on Figure
2 and Table 6 above, the value of outer loading indicator variable Balanced Scorecard of
X1 - X10, there is still outer loading value under 0.5 that is X5 and Y6.
The outer loading is still to be fixed by removing the indicators whose value still below
0.5, which are X5 and Y6 Source: SmartPLS Result Figure 3. Outermodel After Dropping
the Variables JAAF (Journal of Applied Accounting and Finance) Volume 2, Number 1,
2018, 1-17 13 Table 7. Value of Final Outer Loading Balanced Scorecard Competitive
Advantage Firm Performance X1 0,709 Y1 0,539 Z1 0,558 X2 0,763 Y2 0,579 Z2 0,532 X3
0,590 Y3 0,592 Z3 0,802 X4 0,546 Y4 0,582 Z4 0,670 X6 0,506 Y5 0,507 Z5 0,801 X7 0,612
Y7 0,633 Z6 0,714 X8 0,682 Y8 0,694 Z7 0,664 X9 0,747 Y9 0,756 Z8 0,653 X10 0,858 Y10
0,755 Z9 0,606 Z10 0,669 Source: Data processed SmartPLS (2017) Based on Figure 3
and Table 7 above, the value of outer loading indicator variable Balanced Scorecard,
competitive advantage and firm performance already had value above 0.5, in other
words the indicators have been good to measure the variables that being measured so
it can meet the convergent validity, so there is no need for other indicators to be
eliminated. Composite Reliability This test is performed to test the reliability value
between the indicators block of the construct that form it.
Here is the output of composite reliability. Table 8. Composite Reliability Construct
Composite Reliability Balanced Scorecard 0,881 Competitive Advantage 0,855 Firm
Performance 0,890 Source: Data processed SmartPLS (2017) Composite reability is good
which has a value above 0.70.
Based on the results of the above table, it can be seen that the value of composite
reliability for the Balanced Scorecard variable is 0.881, while the competitive advantage
variable is 0.855, and the firm performance variable is 0.890 where all values are all
greater than 0.70. Thus it can be said that the model in this study has met the composite
reliability.
Inner Model Based on data processing with Smart PLS, so the coefficient of
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determination (R-square) as follows: 14 The Effect of Using Balanced Scorecard Table 9.
Value of R-Square Model R-Square Competitive Advantage 0,514 Firm Performance
0,671 Q2 0,84 Source: Data processed SmartPLS (2017) Goodness of fit on smart PLS is
known from the value of Q2. The value of Q2 has the same meaning as the coefficient of
determination (R-square / R2) in the regression analysis.
The higher R2 value the better model with data. From the data in Table 8 above can be
seen the value of Q2 as follows: Q2 = 1 - [(1-0,514) (1-0,671)] Q2 = 1 - (0.486) (0.329) Q2
= 1 - 0.159894 Q2 = 0.840 = 84.0% In this study, the R-square value obtained in
equation of competitive advantage is 0,514, which means the effect of Balanced
Scorecard to competitive advantage is 51.4%. While the value of R-square generated at
the firm performance equation is 0.671, which means the effect of Balanced Scorecard
on firm performance is equal to 67.1%. From this research model is known that value of
Q2 equal to 84,0%.
It can be interpreted the model used in this study can explain the information contained
in the data of 84%. Significance Test To see the significance of Balanced Scorecard,
competitive advantage and firm performance can be done by looking at the value of
parameter coefficient and significance value of T-statiscisc. The output results can be
seen in the following table obtained from the results of smartPLS output using
calculate-PLS Bootstrapping.
Table 10. Path Coefficients Hypothesis Prediction Coeficient t Statistics P Values Result
BSC -> CA + 0.717 13.414 0 Supported*** BSC -> FP + 0.462 3.028 0.001 Supported***
CA -> FP + 0.421 2.769 0.003 Supported*** BSC ->CA ->FP + 0.302 2.649 0.004
Supported*** Notes: ***sig level 1%, **sig 5%, * sig 10% Source: Data processed
SmartPLS (2017) C 0.717 BSC + e1 (3) FP = a .421 CA + e 2 (4) Based on the above table,
Balanced Scorecrd has a positive effect on firm performance and significant at 1% level.
The results of this study in accordance with the results of previous studies done by Sim
& Koh (2001), Strohhecker(2007), Der & Hsu (2011), Lokatili et.al., (2013), where they
produce the same findings, namely the use of Balanced Scorecard positively JAAF
(Journal of Applied Accounting and Finance) Volume 2, Number 1, 2018, 1-17 15 affect
the firm performance.
These results indicate that the use of Balanced Scorecard is effectively used by
companies in Jakarta, not only in manufacturing companies, but also in other sectors.
This result is supported by the second hypothesis, where the Balanced Scorecard has a
positive effect on the competitive advantage. This agrees with the findings of Kallas
(2006), Lokatili et al., (2013).
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This result indicates that the existence of a Balanced Scorecard on a company can
increase the competitive advantage of the company. Competitive Aavantages also
positively affect on firm performance on the companies that use Balanced Scorecard in
Jakarta. The results of this study support the results of previous research conducted by
Tuan & Yoshi (2010), Tewal (2012), Li et. al.
(2006), Prayhoego (2013), Lokatili at et. al., (2013) where competitive advantage has a
significant positive effect on firm performance. These results indicate that the existence
of competitive advantage in companies that use Balanced Scorecard will give a positive
effect on firm performance. There is a positive effect between Balanced Scorecard on
firm performance through competitive advantage on companies that use Balanced
Scorecard in Jakarta.
This result means that the existence of Balanced Scorecard will give positive effect to
firm performance through competitive advantage to company. Based on calculation of
VAF from Table 10 above (0,302 / 0,302 + 0,462), obtained value equal to 0,3953, which
means indirect effect of Balanced Scorecard to firm performance is 39,53% which mean
there is partial mediation effect of Balanced Scorecard to company performance
through competitive advantages and significant.
From the results of data processing can be seen that the main factor causing corporate
performance in companies that use Balanced Scorecard in Jakarta is how big the
contribution of the company's managers in using and applying Balanced Scorecard in
the company properly and correctly. This can be seen from the results of research
stating that the Balanced Scorecard can directly improve the firm performance in
operational performance indicators supported by indicators of Balanced Scorecard
criteria.
CONCLUSION Based on research result, it can be concluded that there is positive and
significant effect between Balanced Scorcard to competitive advantage and firm
performance partially. There is positive effect of competitive advantage and firm
performance, and Balanced Scorecard positively effect to firm performance through
competitive advantage.
The use of Balanced Scorecard helps managers within the company to translate the
company's vision, mission and objectives, so that managers can achieve the firm
performance and suitable competitive advantage for the company. The use of Balanced
Scorecard can also help managers in knowing the weaknesses of the company, so that it
can quickly improve the weaknesses and firm performance which company expected
Page 13
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