Enhancing MSME Performance through the Balanced Scorecard: A Study in Central Java

Agustinus  Wardi; Edy Siswanto

doi:10.51903/jmi.v3i1.41

Authors

Agustinus Wardi Universitas Sains dan Teknologi Komputer https://orcid.org/0009-0005-3967-3506
Edy Siswanto Universitas Sains dan Teknologi Komputer https://orcid.org/0009-0009-0141-2609

DOI:

https://doi.org/10.51903/jmi.v3i1.41

Keywords:

Balanced Scorecard (BSC), MSME Performance, Financial Stability, Operational Efficiency, Customer Satisfaction

Abstract

The Balanced Scorecard (BSC) is recognized as a comprehensive performance measurement tool, especially relevant for Micro, Small, and Medium Enterprises (MSMEs) facing competitive pressures. In Central Java, MSMEs play a critical role in regional economic development but often struggle with financial and operational limitations. This study aims to assess the impact of BSC implementation on MSME performance in Central Java by focusing on four key perspectives: financial, customer, internal business processes, and learning and growth. Using a descriptive quantitative approach, data were gathered through surveys involving 941 MSMEs. The collected data were analyzed with descriptive statistics and multiple linear regression to measure the effect of each BSC perspective on overall performance. The results demonstrate significant improvements across all BSC perspectives. Financial stability improved, with MSMEs reporting a 20% increase in net profit, while customer satisfaction and loyalty showed considerable growth, contributing to sustained market share. Operational efficiency in internal business processes reduced costs by 8% and shortened production cycles by 10%, enhancing MSME productivity. Furthermore, employee skills and motivation increased by 7%, reflecting the importance of human resource development for sustaining competitive advantage. The findings highlight the BSC's role in helping MSMEs identify strengths and weaknesses, enabling more strategic and long-term planning. This study contributes novel insights into BSC application in MSMEs within an emerging market context, emphasizing that non-financial perspectives—particularly customer and learning—are crucial for MSME sustainability. These findings suggest that MSMEs can leverage BSC for comprehensive performance measurement, while future research could explore digital technology and organizational culture as factors enhancing BSC efficacy in diverse MSME settings

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