A system dynamics approach to the balanced scorecard: a review and dynamic strategy map for operations management

Abstract

PurposeThis paper aims to (1) identify the different performance drivers (lead indicators) and outcome measures (lag indicators) investigated in the literature concerning the four balanced scorecard (BSC) perspectives in operations management (OM) contexts and (2) understand how performance drivers and outcome measures (and substantiated perspectives) are related.Design/methodology/approachWe undertake a systematic literature review of the BSC literature in OM journals. From the final sample of 40 articles, performance drivers and outcome measures have been identified, and the relationships amongst them have been synthesised according to the system dynamics approach.FindingsFindings show (1) the most relevant performance drivers and outcome measures within each BSC perspective, (2) their relationships, (3) how the perspectives are linked through the performance drivers and outcome measures and (4) how the different measures relate systemically. Accordingly, four causal loops amongst identified measures have been built, which – jointly considered – allowed for the creation of a dynamic strategy map for OM.Originality/valueThis study is the first one that provides a comprehensive and holistic view of how the different performance drivers and outcome measures within and between the four BSC perspectives in OM relate systemically, increasing the knowledge and understanding of scholars and practitioners.