BSC and Six Sigma


Sig Sigma Review

Six Sigma is a management framework and methodology that focuses on leading the organization  through a continuous improvement process (Rodriguez, 2008) by defining, measuring, analyzing and controlling the quality of a company’s products, processes and transactions (Primus, 2002). The ultimate purpose of Six Sigma is the elimination of defects and errors.


The concept has its roots in the quality improvement initiatives at Motorola in the early 80s which rapidly spread with great success to other technology manufacturing companies like General Electric and Honeywell (Rodriguez, 2008; Pan and Cheng, 2008; Primus, 2002). Since its launch, Six Sigma has become the most popular quality management and operational performance improvement tool in the 21 century (Pan and Cheng, 2008).


The Six Sigma approach to operational problem solving is completed in five stages (Rodriguez, 2008)

  • Define the Six Sigma project and identify its scope
  • Measure the performance status of the project
  • Analyze project performance against targets
  • Improve Six Sigma project management system, and
  • Control retroactively and monitor the improvements


BSC and Six Sigma relationship

Analyzing the Six Sigma framework and implementation process more closely, several academics and researchers came to the conclusion that the methodology resembles in many ways with the Balanced Scorecard concept. Gupta (2005) identified several similarities between Balanced Scorecard and Six Sigma in regards with the finance, customer, internal processes, learning and growth perspectives, but also in terms of the vision and measuring system.


Kaplan and Norton (1996) cited in Pan and Cheng (2008) mentioned the similarities of Motorola’s Six Sigma customers perceived quality measures with the ones that are used in the traditional BSC Customer perspective. Weinstein and Castellano (2004) cited in Pan and Cheng (2008) also outlined that the Six Sigma program is helpful in launching a Balanced Scorecard implementation, since it requires the improvement of critical business processes.


It is proved that many companies today such as Philips Electronics, 3M or Ford Motor Company are using both the Balanced Scorecard and Six Sigma management concepts (Pan and Cheng, 2008). In many of these companies Six Sigma implementation has become one of the Balanced Scorecard strategic initiatives.


Cheng and Pan (2008) researched several characteristics of the relationship between Balanced Scorecard and Six Sigma programs. Their findings point to the fact that the implementation experience of a Six Sigma program assist in launching a BSC program, while the numbers of years in implementing  Six Sigma doesn’t have any impact on BSC implementations.


BSC and Six Sigma blended methodologies

Taking in consideration the proved relationship between the Balanced Scorecard and Six Sigma, several authors proposed various combinations of the two management concepts.


Rodriguez (2008) developed the Six Sigma Scorecard (SSS) based on a three linkage points relation between the Balanced Scorecard and Six Sigma.

  • The linkage between BSC strategic initiatives and prioritization of the Six Sigma projects;
  • The linkage between BSC strategic goals and Six Sigma project objectives;
  • The linkage to the BSC measures related to process, financial and customer satisfaction.


The newly created frameworks propose an increase in the organizational performance, assessed according with Rodriguez (2008) in productivity, management value perception and customer’s satisfaction indicators of an organization.


Gupta (2004) contributed to the research of a model based on the merger of Balanced Scorecard and Six Sigma proposing a Six Sigma Business Scorecard framework. The model was presented as “a complete corporate performance system that requires leadership to inspire, managers to improve, and employees to innovate in order to achieve the optimum level of profitability and growth”. The two purposes of the model were defined by Gupta (2004) as:

  • To accelerate the improvement in the process of business performance;
  • to  optimize the financial measurement process in relation to profitability, cost and revenue variables.


Finally, a third management model blending Balanced Scorecard and Six Sigma methodologies is proposed by Jung (2006). The model, Balanced Six Sigma Performance Management, is the result of “aligning the Balanced Scorecard performance management infrastructure with the challenges of a continuous improvement activity such as Six Sigma” (Jung, 2006). According with the researcher, the purpose of the new framework is:

  • To visually and quantitatively communicate the alignment between continuous improvement activities and strategy, and
  • To provide a better understanding whether continuous improvement activities are balanced across all of the strategic objectives established.



  • Gupta, P. (2004), Six Sigma Business Scorecard: Ensuring Performance for Profit, McGraw-Hill Professional, New York, NY.
  • Gupta, P. (2005), The Six Sigma Performance Handbook, McGraw-Hill Professional, New York, NY.
  • Jung, D. (2006), Balanced Six Sigma: Converting strategy into action, Perform Magazine, Vol. 3, No. 4, pp. 1-6.
  • Pan, J., N. & Cheng, M., Y. (2008), An empirical study for exploring the relationship between Balanced Scorecard and Six Sigma Programs, Asia Pacific Management Review, Vol. 13, No. 2, pp. 481-496.
  • Primus (2002), Six Sigma: the pursuit of perfection, White Paper.
  • Rodriguez, A., B. (2008), A framework for align strategy, improvement performance and customer satisfaction using an integration of Six Sigma and Balanced Scorecard, PhD. Dissertation, College of Engineering and Computer Science, University of Central Florida, CA.

BSC system : BSC and other concepts


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