Perceptions and configurations of balanced scorecard use: evidence from Portuguese SMEs

Abstract

Purpose The purpose of this study is to identify managerial perceptions, as well as individual and organizational contingencies, that influence the use of balanced scorecard (BSC) among SMEs. Design/methodology/approach This paper adopts a mixed methods approach to study the use of the BSC from a survey database of 414 SMEs across several industries in Portugal. Findings This paper shows the perceived benefits, reasoning and obstacles that managers face when using the BSC in SMEs. The BSC is not the first choice for strategic management control of most firms in the sample. Most SMEs in this study have an explicitly formulated business strategy. The results show that it is possible to implement the BSC in SMEs without a formalized strategy. Such findings seem to suggest that the use of the BSC may stimulate the formulation of strategies for those firms. Research limitations/implications The use of fuzzy-set qualitative comparative analysis limits the generalization of the findings; nonetheless, the transparency of the report enables replication without restrictions. Practical implications This paper proposes that the size of the firm and the characteristics of the manager may compensate for the absence of a strategy to guide BSC use. Social implications This paper advises a match between the stage of development of the SMEs strategy and the gender of the manager, which may have implications for recruitment purposes. Originality/value This study reports alternative configurations of individual and organizational conditions that lead to the use of the BSC in SMEs as well as configurations that prevent its use.