DEPARTMENT OF BUSINESS STUDIES

IBRA COLLEGE OF TECHNOLOGY

(MINISTRY OF MANPOWER)

SULTANATE OF OMAN

A graduation project report submitted in partial fulfillment

of the requirements for the award of the Bachelor Degree in

Accounting

“Designing a Balanced Scorecard to Determine the Bank

Muscat performance”
Submitted by:

Laila Juma Alkitani (36S1426) – Jumana Ahmed Alrajhe (317S143)

Supervisor

Dr. Sunita Panicker.

Semester II,2019

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 CERTIFICATE

This is to certify that Jumana Ahmed Alrajhe (317S143) & Laila Juma Alkitani (36S1426) are bona
fide students of Bachelor level in Accounting and Finance at Ibra College of Technology, carried out
a project titled “Designing a Balanced Scorecard to Determine Bank Muscat performance” under my
supervision in partial fulfillment of the requirement for the award of Bachelor degree in
Accounting this project does not form whole or apart of any thesis or research work done in
the past and it is their original work.

Project Supervisor Head of Department

Dr. Sunita Panicker. Dr. Habiba Almugairi

The Viva Voce examination is held on _______________________.

Sl. No. Name of the Examiner Signature of Examiner

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 Abstract
We focused in this research first the measurement performance of banking sector in Oman
was not studied by any researchers. Secondly, that the bank sector in Oman doesn’t used the
balanced scorecard to determine their performance, and thirdly, the banking sector use only
the reports. Precisely, the banking sector depends on the financial measures like, the net
profit “profitability”, return on investment, liquidity ratios and leverage ratio etc. we did not
before encounter any research work that deals with the implementation of the BSC to
measure the performance of banks in Oman The banking sector should begin to adopt
comprehensive performance measurement systems such as the BSC to clarify to stakeholders
that this sector tends to exploit financial and non-financial measures to provide investors with
performance information. Research work of this type is therefore important and worthy of
investigation in the context of the banking sector in Oman. We expected that this research
will enhance our knowledge of this subject closing the gap of this area and attract other
banking sector in Oman to measure their banking performance by using the BSC as a tool.
Our aims is to examine the potential of using the balance scorecard as a tool for bank
Muscat .this research will endeavor to answer questions concerning to the balance scorecard.
This research also aims to demonstrate that the balance scorecard can be used as an effective
measurement performance for both financial and non-financial information this study aim is
to determine the factors that lead the performance of bank Muscat for four perspective
financial, internal process .customer .learning and growth .this perspective which is financial
and non-financial information will measure the performance for each factors.

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 Acknowledgement
It is a great pleasure to thank the many people who in different ways have supported our
graduate studies and contributed to the process of writing this thesis. First, we would like to
thank Dr. Sunita P our supervisor. For her time in explaining the details of this study and
guidance for the right way at each stage of this study. We also extend our thanks and
appreciation to Mr. Hamid Al-Shabibi in the Engineering Department for helping us with
some services related to banks. We also thank Mr. Hamoud Al-Azri from the Department of
Information Technology for our support for some programs helps to create the correct search
and also provide us with models and also we thank Dr. Subir from the Department of
Business Studies to provide us with what we need. We would like to express our deep
appreciation to representatives of the different area commercial banks; specifically, branches
of the head office in Oman who took them time to answer our questions and provide us with
explicit comments. For everyone who has helped in every way to enable us to reach this
academic pursuit to in the end.

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TABLE OF CONTENT:
CERTIFICATE......................................................................2
ABSTRACT............................................................................3
ACKNOWLEDGEMENT.....................................................4
TABLE OF FIGURES...........................................................5
TABLE OF TABLES.............................................................5
TABLE OF ABBREVIATION.............................................6
CHAPTER I:..........................................................................6
1.1 INTRODUCTION:..................................................................................................................................................6

Table of Figures
FIGURE 1...................................................................................................................................10
FIGURE 2...................................................................................................................................11
FIGURE 3...................................................................................................................................13
FIGURE 4...................................................................................................................................25
FIGURE 5...................................................................................................................................25
FIGURE 6...................................................................................................................................26
FIGURE 7...................................................................................................................................27

Table of Tables
TABLE 1....................................................................................................................................21
TABLE 2....................................................................................................................................23

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 Table of Abbreviation

CASES
ATMs.....................................................................................................................................................................25
BM:Bank Muscat.............................................................................................................................................25, 28
BSC:Balanced Scorecard................................................................................................................................passim
CDM’s:Cash Deposit Machine........................................................................................................................10, 23
CDMs.....................................................................................................................................................................25
CG:Credit Growth..................................................................................................................................................26
FP:Financial Perspective............................................................................................................................13, 18, 19
GOBS:Growth of Banking Service........................................................................................................................26
IPP:Internal Process Perspective................................................................................................................13, 18, 19
KPI:Key Performance Indicators...........................................................................................................................18
LGP:Learning & Growth Perspective..................................................................................................13, 18, 19, 27
LR:Liquidity Ratio...........................................................................................................................................23, 25
NP:Net Profit..........................................................................................................................................................25
POEA:Percentage of Employee Apprised.............................................................................................................27
RIE:Return in Equity..............................................................................................................................................25
ROI:Return on Investment...............................................................................................................................23, 25

Chapter I:

1.1 Introduction:
“If you cannot measure it you cannot improve it....” (Lord Kelvin).

One of the most important achievements of the Omani Renaissance is the bank. This is what
makes us proud of all the achievements and successes achieved by the Omani citizen over the
past years and to enhance the role and development of the field of responsibility at all levels
using a balanced performance card to benefit from financial and non-financial measures to
provide investors with performance information since the nineties. Balanced performance has
been important in the global industrial community. As a result, some major banks around the
world have implemented this card, which has led to widespread use in recent years. Net since
2008 suffer from the financial crisis among these countries which clearly emerged as a result
of the financial turmoil in the United States of America and through our research we

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evaluates the practical application using the Balanced Scorecard to improve the performance
management system in Bank Muscat. We focused in this research first the measurement
performance of banking sector in Oman was not studied by any researchers. Secondly, that
the bank sector in Oman doesn’t used the balanced scorecard to determine their performance,
and thirdly, the banking sector use only the reports. Precisely, the banking sector depends on
the financial measures like, the net profit “profitability”, return on investment, liquidity ratios
and leverage ratio etc.. we did not before encounter any research work that deals with the
implementation of the BSC to measure the performance of banks in Oman The banking
sector should begin to adopt comprehensive performance measurement systems such as the
BSC to clarify to stakeholders that this sector tends to exploit financial and non-financial
measures to provide investors with performance information. Research work of this type is
therefore important and worthy of investigation in the context of the banking sector in Oman.
We expected that this research will enhance our knowledge of this subject closing the gap of
this area and attract other banking sector in Oman to measure their banking performance by
using the BSC as a tool. Our aims is to examine the potential of using the balance scorecard
as a tool for bank Muscat .this research will endeavor to answer questions concerning to the
balance scorecard.

This research also aims to demonstrate that the balance scorecard can be used as an
effective measurement performance for both financial and non-financial information
this study aim is to determine the factors that lead the performance of bank Muscat for
four perspective financial, internal process .customer .learning and growth .this
perspectives which is financial and non-financial information will measure the
performance for each factors. This study will answers the questions of how the
concept of Balanced Scorecard will affect the Bank Muscat performance. How to
measure the financial and non-financial information of the bank by using BSC? And
does the usage of BSC as a tool for the measuring of Bank Muscat performance gives
a positive result? The study will include both financial and non-financial information
measurement of the firm. In this study we will determine the performance of bank
Muscat and examine the it in the basis of the four perspective related to Balanced
Scorecard and see the performing of Bank Muscat for five years (2013-2017). The
limitation that we met in this research are time and cost constraints, as the time is
limit to do this kind of research which is need more time to collect the data and
analysis it. Also, the analysis is done based on secondary data which complicated to

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 find out all data that we need it for our study some data are available for some years
and the same data are not available in other years that lead us to choose another items
under each perspectives. This research will benefit the bank itself, investors and
shareholder Balanced Scorecard (BSC) is a tool for performance management
strategies that demonstrate that their design and automation tools are effective. Used
by managers to track the implementation of activities by employees under their
authority and to monitor and follow up the consequences of such actions. Including
the use of economic indicators of the index of the company and at the same time take
into account objectives or so-called non-monetary factors. For example, management
methods that rely solely on monetary indicators cannot be considered as a means of a
balanced assessment document. Methods of comparison (confidentiality) between
firms cannot be considered as a balanced assessment approach. This method attempts
to highlight the company's insights and strategies on economic objectives and
indicators and take four sections into consideration: finance, customer affairs, internal
processes, learning and development. In this way, focus is only avoided on the money
side Robert Kaplan and David Norton invented this method in the 1990s through their
work at Harvard University. Balanced scorecard including four perspectives which
are for both financial and non-financial they are Financial, Internal process,
Customers and Learning and growth. The special with these perspectives in case it is
going to use for organization or non-profit organization can order depend on the
necessities such as services for citizens and investors, economic performance, human
growth and information system. The Balanced scorecard which is developed by
Kaplan and Norton known as tool for management and planning system. The BSC is
used in industry and business, non- profit and government organization worldwide.
The BSC monitor organization performance against strategic goals that improve
external and internal communication. This tool is organized by Robert Kaplan and
Dived Norton this strategy added measures performance for financial and non-
financial information. And also, measures the performance of frame work to give
executives and managers more balanced for review organizational performance. This
card was coined in the early 1990’s. Financial perspectives this section includes
purely financial objectives such as return on investment, product cost, profitability,
and cash flow. It is used to measure these financial ratios and various financial
figures. Some financial figures may be important at some point, such as cash flow
sometimes from hardship. Non-profit organizations may differ, but in the end they
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 must maintain their continuity in their activities by maintaining adequate resources in
this study we include liquidity ratio, return in equity, net profit and return on
investment. Internal process the efficiency of Bank Muscat's internal systems is
measured to ensure their competitiveness. The most important of which are the
renewal system (bank research, the number of annual patents, the number of new
products offered annually in the bank), the production system (product quality and
competition in the labor market), production time ...). The after sales service system is
also an important system (receiving customers at the bank to solve problems related to
check cards and so on). Therefore, in this study we will study the business growth for
bank Muscat, growth of banking service and credit growth. Customer’s perspectives
the bank needs to direct your attention “customers”. Through this perspective,
indicators have been developed that reflect the client's situation for the bank such as:
customer satisfaction, market share, level of loyalty, customer retention, customer
attractiveness and customer profitability. However, this research will include
customers complaint’s, growth ATM’s, growth CDM’s, profit per customer. Learning
and growth perspective this aspect identifies the capacities in which the bank must
grow in order to achieve high-level internal processes that create value for customers
and shareholders. The growth and learning side emphasizes three capacities:
employee capabilities and reorientation (employee education and development,
employee satisfaction measurement, employee fulfillment, employee productivity).
The effectiveness of information systems, motivation and accountability of
employees. Furthermore, we include number of employee, percentage of employee
Apprised, percentage of employee receiving training and employee stability.

1.1.2 Outline

This study is include five chapters as given in the Figure.1 Outline of the study below, By
now, the first chapter is discussed above and the following chapters will discussed later.

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Figure 1

1.1.3 Background of the study

The background to the study is given in the following sections which look at introducing the
and concluding The study goals is to give a share to the literature of BSC, to promote the
banking sector to use the Balanced Scorecard in Oman, and to enhance the knowledge of how
the BSC as a tool is help the bank and stakeholders to develop their bank performance in both
financial and non-financial measures

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Balanced scorecard, the banking sector in sultanate of Oman determine bank’s Muscat
performance and the motivation for this work The Balanced Scorecard that is used as a tool
and model to measure the Bank’s performance and as per the literature which is shows a high
connection to estimate the bank performance by the BSC tool, that is not find it is way to the
banking sector in Oman. There is no Bank or study in Oman show that they work with
Balanced Scorecard. However, add to that the mesurment used in Bank Muscat to determine
the performance for the Bank only based in the financial measures which is showen in the
reports eaither annual or monthly.

Figure 2

Chapter II:

2.1 Review of Literature

“The firm becomes what it measures” (Hauser & Katz, You are what you measure).

2.1.1 Introduction

This chapter will illustrate for the reader the Literatures that are links to the study for the area
of BSC as a tool, model and strategic performance measurement for different banks. This

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chapter will provides the reader with earlier studies for Balanced Scorecard. “Performance
control systems can serve two purpose, measure and motivate.” (H. Mintzberg, The Structure
of Organizations, 1979). Before the list of the earlier research let us know how the
organization can use and apply the BSC as performance measurement tool. Balanced
Scorecard is a tool or model for the business performance which is measures both financial
and non-financial measure of the firm include four perspectives FP, IPP, CP, and LGP. BSC
a model developed by Kaplan & Norton will assist the firm to effectively connect to their
vision and strategic and it must be known by everyone in the firm. The BSC with the four
perspectives will answer the firm questions. FP will answer the question in how the firm must
seems to its stakeholders, In IPP what the firm should excel and that in order to offer value
for its customers to lee the cost and to enhance the profitability, CP how the firm looks to
their customers, and LGP how the firm can increase the operation continuously is the
question to deal with.

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 Balanced Scorecard as performance measurement tool

Figure 3

2.1.2 Review of literature

Ahamdy. A. (2018). have studied the measure of performance of public bank in Egypt and
establish links between their strategic vision and performance objective. The hypotheses of
research is a significant positive to relationship between orientation system of BSC and level
of bank performance .There is a significant positive to relationship between orientation
system of BSC and level bank and innovation performance .There is a significant positive to
relationship between orientation system of BSC and level bank process performance the data
of this research is survey by using self-administrative for five categories scales ( strongly
agree, agree, Neither nor disagree and strongly disagree ) to measure employees responses
about research variable The types of this research are validity and reliability of measurement
reliability that the research estimate the measure of reliability they will find the (coefficient
of Alfa) by using the SPSS version 22 program These researches are many decisions in
sampling, research population sample, unit of analysis, sampling unit and research
limitation .This research population is set of bank that operation in Eqypt so in central bank
in Egyptian report in 2015 Ahamdy. A. (2018). Zahoor. A. (2018)the purpose that is done by
Adil is to investigate empirical evidence in case will support theoretically grounded
interrelation for four balanced scorecard prospective which were learning and growth,
internal business process, customer and financial . he used 13 performance indictors the data
was collected from 1001 employees and 985 customers from two Indian banks by using
hypothesized relationship “Structural equation modeling”. The study show a positively result
influenced from all the four prospective. Zahoor, A. and Sahaf, M. (2018). JAMES Agyei et

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al (2016) study contribute to the understanding of how BSC is developed and used in
evaluate the performance of banks in several dimension The combine data of research
collection method such as , questionnaire , interview , observations and archives , the
evidence of this research maybe qualitative and quantitative or sometimes both in (1984)
describe case with a single source of information as case with multiple source to answer to
all research questions .This research viewed part of diver’s investigations of usage of many
performances evaluate on approach developed in past view also provide guideline to
origination when consider method to performance particulars the bank were used case
study .This method of research opened up on nature of research so that major research
mythologies are quantitative and qualitative Agyei. J. and Brako. E. (2016). ASAASTRA. D.
(2016) The study used a descriptive cross sectional survey to determine the application of
balance score like strategy implementation tools and it’s influences to performance of these
internal institutions .The research of Creswell and Clark (2007) research design to be a blue
for measurement and collection to analysis of data that saves to provide the solution to this
research .A semi – structural questionnaire to collect from primary data , that the
questionnaire were self- administered Via drop and respective operation on manager and
from strategy .The statistical package for social sciences, (SPSS) version 20 was employed
analysis data generated from questionnaire, presented using frequencies table band
percentage Asaasira. D. (2016). Panicker and Seshadri (2013) make the study to found out
how BSC used as a tool for banks performance in India and how it affected in both financial
and non-financial aspects. Such as the process of internal business customer factors and
growth. The objective of this study is to understand evaluating performance of standard
chartered bank by using BSC. Financial prospective , customer prospective, internal process
prospective was used in the study to see the cause and effect relationship as first step for data
analysis. Then, , identify the BSC’s objectives, performance of scale and the BSC
performance was using by measuring 4 years of study. The result shows that there’s an
improving in BSC performance for all prospective. Panicker, S. and Seshadri, V. (2013). Al-
Najjar et al (2012)In the internal process increase innovation , improve operational
capabilities , improve operational efficiency , in financial , survival , growth , stake holder
satisfaction , Revenue development , and customer types customers , retention ,Attract new
customer , increase market share So. develop causes effect relationship to link bank analysis,
effort to selected measurers pertaining to each of BSC , concept of strategies map , that data
available to performance from 2006 to 2009 measure and target for four perspective as they ,
the performance for four years to measure of study according to scales and score developed 3
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and assigned to each measure from 2006 to 2009 also show presentational score / years for all
perspective .The results of this work have many implications on the authorities of central
bank of Iraq and policy of markets in financial sectors that excepts with increases demand .So
this research learning and growth perspective was better than customer perspective .The
performance results can benefits of stakeholder and financial sectors analysis and bank
studies (Al-Najjar and Kalaf, 2012). Al Mawali et al (2010) make a research to studied
Jordanian banks industry to know the effect of BSC framework with different branches
performance in Jordanian. Al Mawali et al collect independent variables by using
questionnaire. Also, used branch managers total of 480 branches. And sample methodology
and out of it to choose 120 branches. Furthermore, they used different indictors: Customer
oriented indictors and product and services oriented indictors. The result of the study shows
the effect of using BSC which examined by al mawali et al it’s fully support and approved
there’s a relationship between usage of BSC and financial performance of branches and there
is a positive impact of usage of BSC Al Mawali. H. & Ali. N. (2010). Wu et al (2009) Studies
23 indexes from 55 indexes which is fit for banking performance evaluation and these
indexes were selected from expert questionnaires with the objective to evaluate the relative
weights of the selected indexes. The data was collected from 3 banks. Further, the study
analyzed the data by using Balanced Scorecard as a tool. Based on the study was found that
the evaluation model that is done for banking performance its useful and effective by using
BSC tool. (Wu, Tzeng and Chen, 2009). D’souza (2007) Studied had to establish the
challenges faced in the application of balance scorecared at Barclay bank of Kenya .Also to
establish how Barclays has applied the balance scorecard in strategy implementation across
the business .The results of bank is contracted from Kshs 444 bn in 2000 to Kshs 427 bn in
2001 mainly that exist of one of large bank that was placed under liquidation (central bank
2007), Kenya .The primary and secondary data they used in this study. The primary data
collected by way of personal in depth interview with the members of employers and staff and
secondary data from bank strategies plans, performance development articles. The analysis of
meaning of this research implication emanating from the respondents, that successfully used
to conduct similar studies in past Kost 2003, Kamau, 2006 D’souza. R. (2007). Davis and
Albright (2004). Conducted a quasi-experimental study that studied the bank branches which
using the Balanced Scorecard and bank branches which is not performed it with the same
banking organization. Based on key financial measures. The objective of this study is to
seethe effectiveness for enhancing a financial performance by using BSC. The study include
empirical analysis to know the impact of BSC on banking institutions financial performance.
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Davis and Albright site the research on banking organization in Southeastern U.S from 14
reporting branches of 30 locations. The evidence shows that the branches which meet the
BSC is have superior financial performance (DAVIS, 2004). Kaplan and Norton (1992), they
developed the balanced scorecard and it’s have been used as a tool for performance
measurement and management strategic in different business industries. And also the banking
industry. The balanced scorecard became a very famous tool in European Union. The concept
of Kaplan and Norton that studies about BSC was derived to measure the performance of
bank this measurement effect the relationship between financial and non-financial. So, that
the relationship compared to other business process, learning and growth area and other
individual perspective of customers Kaplan, R.S. and Norton, D. P. (1992).

2.1.3 Conclusion
In Conclusion, this chapter (chapter 2) delivers a brief review of literature link our research
questions. It is also deliver a perception frame of reference from the study. The purpose was
to choose related concepts and theories that utilized in the research. All this is to evaluate the
effect of financial and non-financial perspective performance it is in the term of cause and
effect framework. Therefore, it is will optimize the way of employee in their work and also
their skills, would enhance the work processes which will increase the customer’s
satisfaction, and this increase will perform better financial result.

Chapter III:
3.1Research methodology
3.1.1 Introduction
By the help of chapter 2 which is connect the questions in chapter one. The conceptual frame
was upgrade to collect the data and also to give better grasp off the information for the BSC.

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3.1.2 Research methods

A combination of qualitative and quantitative approach was used in the data analysis of this
study.

3.1.3 Quantitative Research Methods

“Positivism” (Duffy, 1985), “Empiricism” (Leach, 1990) are a terms for quantitative
research. The quantitative research provide a description and examination for the cause and
effect relationships.

3.1.4 Qualitative research methods

Engage a phenomena perspective thereunder researchers aim to understand, determine and

assess the meaning of events for people in particular situations, by how the social world is
organized by participant in it. Its emphasis of qualitative methodologies such as focus group,
participant observation, unstructured interview, and open-ended questionnaire. This study
was a combination of both QL & QN method. We conduct in our research this type of
methods as we interview some of the employee of Bank Muscat which they are directly
responsible for the financial performance. And also, by contact with Bank Muscat and other
banking sectors. But, that was not sufficient for the all four perspective, we collect data also
depending on secondary data. In gathering data on BSC for Bank Muscat, for main Key
Performance indicators (KPI) which are FP, IPP, CP, and LGP must be the main strategic
aims for the bank to its target and goals for the four perspectives. Therefore, a small number
for each perspective will be considered in this study in data and analysis.

3.1.5 The size and selected sample

The population size for the local Banks in Oman is 9 banks a sample size is one banks, which
is Bank Muscat. The reason behind choosing this bank because it’s the strongest performing
bank in Oman. But, we want to see if the bank is performing well in both financial and non-
financial measure.

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The type of this study is Case study approach. The data was collected by using secondary
sources. The secondary data were from the annual reports, financial statements, statement of
financial position, statement of profit and loss, and cash flow statement and sustainability
report for the five year (2013-2017). We used Microsoft excel

Chapter IV:
4.1 Data analysis and BSC development

4.1.1 Introduction

This chapter will examine the measures used in the study and how the Balanced Scorecard
framework can be used to determine the bank Muscat performance for the five years (2013-
2017). The analysis used for the bank which generate how the BSC can used to determine the
performance of Bank Muscat in Oman they are:

I) Financial performance indicators (Financial perspective).

II) Internal operational efficiencies (Internal Processes perspective).
III) Customer satisfaction and customer retention (Customers perspective).
IV) Employee satisfaction ratings (Learning and Growth perspective).

The four perspectives are financial perspective, Internal Processes perspective, Customers
perspective, and Learning and Growth perspective. FP, deal with how the firm will
demonstrate to it shareholders, IPP, it is for the type of processes the bank/ firm excel at. CP,
how customers looks the firm. LGP, how the firm will continue and improve. The main task
of banks is financial intermediation, which they take from the surplus and give the deficit. To
perform this function effectively, they need very good performance in these areas. It is
generally known that to obtain low-cost and cheaper funds for lending, banks must develop
deposits of their current accounts of individuals. In order to achieve this, they must have
appropriate internal processes and controls that provide high quality and effective services to
their valued customers in order to attract and retain them. To effectively carry out internal
operations, banks must have enthusiastic, experienced and skilled employees. This will

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ensure you're satisfied with the following customers who can keep them. This will ultimately
affect their financial performance.

4.1.2 Analysis of BSC performance

All the four perspectives will be derived from given data for Bank Muscat it going to be
analyzed in next chapter if BSC gives further information with the respect to the performance
of bank Muscat in Oman.

These above areas are essential to the strategies of bulk banks. First: Determine the
characteristics of bank administrative activities and choose the measures the BSC
perspectives: Financial prospective, internal processes, Customer prospective, learning and
growth. Second: With the data available of the BSC performance from 2013-2017, we are
going to find out the BSC’s objectives and measures the four perspectives. Third: Identified
the performance scale for each measure. Fourth: Measures the BSC performance for 5 years
2013-2017.

4.1.3 The research problem

The Balanced Scorecard that is used as a tool and model to measure the Bank’s performance
and as per the literature which is shows a high connection to estimate the bank performance
by the BSC tool, that is not find it is way to the banking sector in Oman. There is no Bank or
study in Oman show that they work with Balanced Scorecard. However, add to that the
mesurment used in Bank Muscat to determine the performance for the Bank only based in the
financial measures which is showen in the reports eaither annual or monthly. To be kept in
mind that the banking sector have to foucs also in other aspect like Internal process,
Customers, and learning and Growth which gonna give also a non-financial measurment to
the financial measurment that given already in the financial statement of the bank. Therefore,

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this reasearch will rubic the issue of developing the model of BSC. The consequnce of the
performance of this study will benefit the bank itself the financial sector analysis, and
stakeholders.

4.1.4 The purpose and research methodology

The study goals is to give a share to the literature of BSC, to promote the banking sector to
use the Balanced Scorecard in Oman, and to enhance the knowledge of how the BSC as a tool
is help the bank and stakeholders to develop their bank performance in both financial and
non-financial measures .

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Table 1

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 280 280 350 310 390

In this study we have used a case study approach. The data available in this research for the
Bank Muscat was gotten from the Bank Muscat website which is done for five years (2013-
2017). We collect the data from the sustainability report, financial statement of Bank Muscat,
statement of financial position, statement of profit and loss, Cash flow, annual reports for the
last five years (2013-2017).

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4.1.5 Data Analysis and the Development of BSC
This steps attached below were used to develop the balanced scorecard for Bank Muscat:

Step one, Determine characteristic of the Bank’s Muscat administrative activities and that to
enhance the relationship for the cause-effect this will link the objectives of Banks to the goals
in an endeavor to select the measures that is link to Financial, Internal process, Customers,
and learning and growth. In this study four measures were picked out for the four
perspectives which they are:

Financial perspective: Liquidity Ratio (LR), Return on Equity (ROE), Net profit, and Return
on Investment (ROI).

Internal process perspective: Business Growth, Growth of Banking Service, Credit Growth,
and No. of Local Suppliers.

Customer’s perspectives: Customers Complaints, Growth of ATM’s, Growth of CDM’s,

Profit per customers.

Learning and growth perspective: Number of suppliers, Percentage of employee appraised,

Percentage of employee receiving training, and Employee Stability.

Second step, By using the data available for Bank’s Muscat performance for the five years
(2013-2017), we distinguish the BSC’s measures, objectives and aims for all perspectives as
illustrate in table 1.

Third step, We recognize the performance scale for all four measures. For each measures 50
score points spilt for the four measures.

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Table 2

Fourth step, Measure the BSC performance for the last five years as per the scales and scores
in third step, the four last columns shown the total score and year for all given perspectives,
and also show the score assigned for the measures for 2013 to 2017.

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Chapter V:
5.1 Findings, Scope for further researcher, and conclusion
5.1.1 Findings
The analysis uncover that the BM performance measured by the BSC was 280, 280, 350,310
and 390 for the years 2013-2017respectively. Converting these scores on a 100% scale yields:
28%, 28%, 35%, 31% and 39% for the same year it seems evident in financial that the BM
performance was improving during the last two years 2016 and 2017 of the study, but in the
for first year three 2013 ,2014 and 2015 years the performance declined. In general the
annual average score achieved by the bank was 695 .However in internal process it seem the
BM performance was declined in first year 2013 and 2014 but in 2015 improving but in 2016
and 2017 the performance declined again . Therefor in customer performance of BM in first
two year 2013 and 2014 was improving but in 2015 the performance of bank goes down in
2015 So after that the performance go up in 2016 and 2017 again. Year it seems evident in
financial that the BM performance was improving during the last two years 2016 and 2017 of
the study, but in the for first year three 2013, 2014 and 2015 years the performance declined.
It seems evident that the BM performance was declined during the first two 2013 and 2014
years of the study, but in the next three years 2015, 2016, 2017 the performance improving

The BM scores on the customer and internal process perspectives were the weak. The growth
in internal process & customers ATMS &CDMs scored in ATMs twenty in second and fourth
year however in CDMs was scored second to fourth year. This finding was concur the bank's
thickening on the financial performance as a measure of performance. However, there was a
decrease in LR as Cash at a Balance in Bank to ten in 2013 and 2014 so enhanced in 2015 to
twenty also included with the other current assets that can be a reason for low liquidity in
2016 and 2017. However in RIE was go down in first three years 2013,2014 and 2015 but
other two years goes up in 2016 and 2017 .Therefor the NP only in the first year in 2013 was
decreases but in the four next year’s 2014,2015,2016 and 2017 the NP increase the same
rate . in the last part in financial the ROI so the first two years was decreases 2013 and 2014
but to others years the average goes up by 10% in 2015,2016 and 2017 .

Financial Perspective
25 | P a g e
 45
40
35 Figure 4
30 2013
25 2014 It’s
20 2015
2016 seems
15
10 2017 in our
5
0 study
LR RIE NP ROI in
internal process so that the in BG was decreases in two first and last years but only increase
in 2015 .however in GOBS the average was decreases in first two years 2013 and 2014 but in
2015 was increase but the last two years the relations was reciprocal in 2016 and 2017
.therefor in CG the first two years the relations was reciprocal in 2013 and 2014 by average
10% but in other years in 2015,2016 and 2017 the average become enhance .But in the No of
supplier every two years ,there is an inverse relations between them.

45
40
Internal process
35
Perspective
30
2013
25 2014
20 2015
2016
15
2017
10
5
0
BG GOBS CG NO of supplier

Figure 5

But the information about the non-financial of our research (Customer) in the CC the average
decrease in first three years 2013,2014 and 2015 however the increase in the last two years
2016 and 2017 . but for bank’s ATMs &CDMs the relations was inverse so the ATMs was
goes up in first three years 2013, 2014 and 2015 but the last two years 2016 and 2017 the
average was decrease but in CDMs the in first and last year’s only was increase 2013 and
2017 but in others years the average goes down in 2014, 2015 and 2016 .therefor the PPC the
had taken the same average for all years from 2013 to 2017.

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 Customer Perspective
60

50
Figure 6

40 2013 It seems
2014
30
2015 in last
20 2016
2017
10

0
CC ATMs CDMs PPC

Perspective in our study LGP shows the No. of employee was taken the same rate in all years
from 2013 to 2017, However, in POEA in the first two years and last two years was taken the
same average is 10% 2013,2014,2016 and 2017 but in 2015 only the average was increases.
But, in POERT the rate was decreases in the first three years 2013, 2014 and 2015 but in last
two years goes up in 2016 and 2017. But, in last part of LAG in ES the first year 2013 only
was down but to others years the average enhance in 2014, 2015, 2016 and 2017.

45 Learning and Growth Perspective

40
35
30 2013
25 2014
20 2015
15 2016
2017
10
5
0
No of employee PPOEA POERT ES

Figure 7

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 In table (2) Fourth step, Measure the BSC performance for the last five years as per the
scales and scores in third step, the four last columns shown the total score and year for all
given perspectives, and also show the score assigned for the measures for 2013 to 2017. Here
is also a decrease in saving account in the Omani bank which is operating in Oman due to
Mark-to-Market phenomenon. This phenomena-non states that when government securities
are giving good rate of in customer to interest the customers. The customers would prefer to
invest in securities than to invest it with banks. BM being a Omani bank, their reach to
smaller towns and rural areas of India is minimal. The internal processes perspective does not
reveal significant improvements; the average annual growth rate was about 3%. In fact the
BM performance was hurt severely in this perspective. It is noticed that the growth of
banking services, measures scored ten during the third year and fifth year.

5.1.2 Scope for Further Research

Future researches related Omani banks operating in Oman are needed in this area. It should
coverage on studying the contingent factors that facilitate or impede the implementation of
the BM such as, organizational structure, private public organizations, organizational culture,
environment, and technology. More studies are also needed to correspond the relevant
measures of the BM for the banking sector.

5.1.3 Conclusion

5.1.3.1 Introduction

This chapter concludes with the findings of the research and makes the appropriate
recommendation for further researchers it also highlight the limitation of research This study
presented a comprehensive review of the Balanced Scorecard as an effective tool
Implementation of the strategy and performance of commercial banks at the first level in the
Sultanate of Oman. Based on the results that have emerged in this study, we have summed up
research into that finite funding, The speed of participation, the value of shareholders and the
results to implement a good strategy The process and availability of financing in banks
contribute to the strategy Improvement in the banks scale. Business unit executives determine
appropriate financial metrics for Financial and strategic objectives and as the final objectives

28 | P a g e
of the objectives in the Strategy Implementation. Increasing the unit in the financial
perspective increases the performance Commercial banks of the first category. The study also
concludes that increasing the unit in the client 's perspective at work may lead to Increase in
the performance of commercial banks of the first level and large There is a relationship
between customer perspective in banks and annual performance. Banks are aligned and
implementing strategies to achieve basic customer satisfaction. Customer loyalty Managers
can learn about strategies to be implemented and implemented strategies so enable banks to
measure and identify value propositions offered to markets Innovation process, operational
efficiency, and use of post-sale services to strategy business process implementation process
and reengineering as well as fostering creativity the study concludes that lack of internal
problems and synergies in the banks hinders the performance strategy .We recommend that
all banks in the sultanate of Oman applying the BSC either financial and non-financial. The
limitation of our research times, constraints and cost and the analysis is done based on
secondary data.

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