Abstract
Claimed by the Harvard Business Review as one of the main innovations of recent decades in management systems, the Balanced Scorecard (BSC) has been widely studied and applied in different management contexts. However, despite recent progress and its undeniable merit, the BSC has its own shortcomings. As reported in the literature, it seems generally agreed that the way compensations between criteria within a BSC framework are calculated remains an open issue. Thus, one of the contributions of this study is to augment the theoretical discussion on the potentialities of the multiple criteria decision analysis (MCDA) approach to bring simplicity and transparency to the calculation of compensations (i.e. trade-offs) among evaluation criteria within a BSC framework. It seems important to underline that this paper builds on previous work and is not empirical research. However, it aims to extend the discussion to other (new) measurement contexts. We believe that the development and promotion of the integrated use of MCDA tools in BSC applications to measure trade-offs among evaluation criteria in the BSC framework can be a key factor in ensuring more successful implementations and uses of the BSC within firms.
Highlights
Present-day economic thinking assumes that performance evaluation is a key element for the promotion of improvement initiatives
This paper builds on previous work, but aims to discuss new findings and amplify the interest of the multiple criteria decision analysis (MCDA) approach to other measurement contexts in order to broaden the generalizability of the results
Despite the progress achieved by the Balanced Scorecard (BSC), the framework is not without its own limitations
Summary
Present-day economic thinking assumes that performance evaluation is a key element for the promotion of improvement initiatives Considering the versatility and great potential of the multiple criteria decision analysis (MCDA) techniques (e.g. MACBETH) in dealing with trade-offs among evaluation criteria, this paper aims to analyze possible contributions of the MCDA approach to overcome the measurement shortcomings of the BSC. It must be highlighted, that Zorzi and Ensslin (2006) have already reported the integrated use of the BSC and MACBETH in the construction of a performance measurement system in an accounting context.
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