A framework for applying Balanced Scorecard to Chinese SMEs

Kaplan and Norton’s concept of the balanced scorecard (BSC) has received wide acceptance by both academics and practitioners. But there was little research on its adaptability to the small and medium-sized enterprises (SMEs) in china. According to our investigation on SMEs in Pearl River Delta from July to September of 2005, a BSC framework was created based on the special characteristics of Chinese SMEs, such as no strategy, poor executive ability and lack of capital. The framework included five perspectives. Besides balanced scorecard’s four typical key perspectives, the paper proposed another important perspective: relationship financing and government support. Finally, the strategy map was used to refine the framework. Thus, the framework not only included the advantage of typical BSC, but also can help SMEs to solve the problem of capital. What is more, the framework can be used to remind the managers to pay attention to research and development (R&D), cash flow, the fast and efficient service and the mentors for guiding employees.