Examination Appropriateness of Balanced Scorecard Interactive Use in Chinese Manufacturing Industry

Abstract

The number of examination consequence of Balanced Scorecard (BSC) use in the management accounting literature is significant. The findings are mixed and inclusive. Appropriateness of BSC use for processing information in organisational context, where the system functions as an interactive or diagnostic system, for decision making might explain the mixed and inclusive findings of the outcome of BSC use. Grounded in contingency theory, it is expected that a positive outcome of interactive use of BSC when firms use it to process information for managing strategic uncertainty of innovation focused customer satisfaction strategy in large and decentralised firms, by contrast, a negative consequence for BSC diagnostic use. Using a survey sample of 247 senior managers in the Chinese manufacturing industry at the firm level and structural equation model, the examination is conducted to test the expectation of the paper. The findings suggest that the outcome differs when firms use BSC differently, interactive or diagnostic, to manage and implement innovation focused customer satisfaction strategy in large and decentralised organisations.