Traditional Balanced Scorecard Research Articles

Investigating lean and green supply chain linkages through a balanced scorecard framework

This paper investigates how to evaluate lean and green supply chain performance through a traditional Balanced Scorecard (BSC). To attain the paper's objective, in a first stage a literature review was carried out to provide a comprehensive understanding of how lean and green can be compatible in a supply chain, how the performance should be evaluated, and how the BSC can evaluate the lean and green supply chain performance. Next, a conceptual framework was developed to investigate how lean and green initiatives can affect supply chain performance. A causal diagram was used to represent the relationships between each lean and green measure through the traditional four BSC perspectives: financial, customer, internal business process and learning and growth. It is possible to recognize that lean and green initiatives influence the linkages between performance measures. These linkages were established by anecdotal evidence derived from the literature review; they are an example of how to evaluate the organization's supply chain. The proposed diagram can be the basis for further research in lean and green supply chain performance. To the author's knowledge, this study is the first to attempt to understand how to apply BSCs to evaluate the integration of lean and green paradigms on supply chain performance.

Balanced scorecard performance evaluation in a closed-loop hierarchical model under uncertainty

This study provides valuable support for successful decision making in network hierarchical structures. The balanced scorecard (BSC) is a measurement system that requires a balanced set of financial and non-financial measures. This study examined both qualitative and quantitative data for the proposed hybrid analytical method. Although numerous studies have been conducted in industry and academia for the development of BSC performance measures, few studies have explored a BSC hierarchical network structure and interdependence relations under uncertainty. This study proposed a set of hybrid approaches for the real case of a performance evaluation of a leisure farm and demonstrated a closed-loop analytical network process for the hierarchical and interdependence relations BSC to assist research improve practical performance and enhance management effectiveness and efficiency regarding qualitative and quantitative information. This study adopted the traditional BSC framework that considers importance weights, performance weights and norm values. The results indicated that the financial aspect is highly weighted and exhibits superior performance; however, the customer aspect exhibits a higher ranking when considering the importance weight and norm value. Managerial implications and concluding remarks are also included in the study.

Key Performance Indicator Disclosures Through the Internet: Towards an Integrated Scoreboard

Purpose – Information disclosure is driven by multiple determinants, most of them supported by traditional theories, such as agency theory, contingency theory, and legitemacy theory. This research aims to identify a set of Key Performance Indicators (KPI), disclosed to stakeholders through Internet. It also aims to apply for an integrated performance scorebord, acting it as a dynamic comparative tool, in particular for listed companies which market value is driven by investors expectations and needs.Design/methodology/approach – Based on 47 listed companies from the Portuguese Stock Index regulated market, and through an interpretive content analysis, research was driven towards the identification of KPI that were explicitly reported to stakeholders through structured or unstructured frameworks. This qualitative approach supports the evidences about performance indicators reported by listed companies to stakeholders, in particular to potential stockholders.Findings – Companies disclose a wide variety of key performance indicators, however in most cases included in their periodical management reports. Only a low number of companies disclose those indicators through a visible form in their web sites. Furthermore, KPI disclosed have a generic nature and are usually complemented by theoretical explanations about their evolution and trends. The diversity of indicators disclosed does not permit a comparision between companies and activity sectors. Key performence indicators are still disclosed on a voluntarily basis, remaining, in this scope, multiple agency conflicts and other issues around agency costs. Altough the intensity and categorization in the information disclosure, a standard framework is required in orther to ensure a dynamic comparision between companies or sectors. Research limitations – The scope of this research is the Portuguese regulated market. Further research can introduce in the sample companies listed in other European regulated markets or even non listed companies. The indicators selection for the proposed framework was based exclusively on frequencies and not on the value and importance attributed by stakeholders to them. Thus, a survey is required in order to certify that indicators selected are the ones that best fit with stakeholders’ expectations and needs. Furthermore, the research was based on web sites content and management reports analysis which introduces in the analysis a certain level of subjectivity, natural source of interpretations’ biases.Practical implications – Empirical evidence is the basis for a structured KPI scoreboard proposal in order to ensure a periodical comparision between companies, from the perspective of external stakeholders.Originality/value – This paper grants and promotes an integrated overview about the key performance indicators expressly disclosed to stakeholders through Internet by Portuguese listed companies. This evidence has used as a basis for a scorboard proposal towards a comparative analysis in the traditional balanced scorecard perspectives. This scoreboard can be disclosed to market by companies as a basis for an overall performance evaluation and business comprehensiveness. However, further developments are required, in particular in the domain of policy making. Information disclosed to market is not enough regulated in order to minimize the performance analysis discretion and overall transparency.

The Evolution of Balance Scorecard and its Impact on Web Services Quality

Web services quality have become a significant part of small businesses who use it to facilitate the seamless flow of business transactions and financial growth. While previous research focused on the technological, operational and infrastructure capabilities such as; reducing the cost of application development, systems integration and increasing interoperability among heterogeneous software components, applications and platforms. Small businesses on the other hand, are often more challenged than larger firms by resource constraints such as; lack of financial capital, and technical or managerial skills. Further, they are often confronted with the reality of their business performance. “If you can't measure it, you can't manage it,” since effective performance management requires accurate performance measurement. The author applies the integrated evolved Enterprise-Define, Measure, Analyze, Improve and Control (E-DMAIC) balanced scorecard methodology to examine web services quality in a small business firm. The integrated framework applies the traditional balanced scorecard four perspectives namely; learning and growth, internal business processes, customer and financial perspectives and the nine stages of the E-DMAIC balanced scorecard approach along with quality indicators. The new approach serves three purposes; first, as a measurement system monitoring performance and the quality of their goods and services. Second, as a communication tool providing diagnostic feedback of their performance, and lastly, as a strategic management system focusing on the small business visions. The author then tests the framework via an exploratory case study and reports the findings. The findings contribute to guidelines that will inform, educate and promote small businesses on the importance of web services quality.

Implementing a Sustainability Balanced Scorecard to Contribute to the Process of Organisational Legitimacy Assessment

The purpose of this paper is to illustrate the use of a Sustainability Balanced Scorecard (SBSC) as a contributing factor in the process of organisational legitimacy assessment. The methodological approach in this study is supported by the application of content analysis to identify and examine the disclosed sustainability indicators of a major Australian financial institution (Westpac). The theoretical lens of legitimacy theory and the Balanced Scorecard (BSC) are used as points of reference to inform and structure the overall theoretical framework of this study. The results indicate that the four perspectives of a traditional BSC correlate with the main sources of influential inputs to Westpac’s sustainability reporting. In addition, the SBSC presented in this article successfully illustrates focal areas of reporting practice, providing a succinct overview of an organisation’s reporting activities. The primary contributions of this research are to the literature on social and environmental disclosures, including the research of Do, Tilt and Tilling (2007), and Baxter, Chua and Strong (2010) and the provision of a practical technique to illustrate the focal activity of an organisation’s social and environmental reporting as part of the legitimisation process.

HARVESTING IP-BASED VALUE POTENTIAL: THE INTELLECTUAL PROPERTY SCORECARD AS A MECHANISM TO CAPITALIZE ON TECHNOLOGICAL INNOVATION, KNOWLEDGE, AND IP

There is a staggering decline in the capitalization of intellectual property (IP) and low levels of investment in R&D, particularly with respect to emerging nations within the global IP environment, which limits accelerated industrial growth. In most emerging markets, this necessitates that management address multiple competencies better, that exploit organizational resources, knowledge, and management ability, to adapt faster than the competition. Our research offers a management model to address this management challenge strategically. This research also indicates that IP as a value creation mechanism is currently not a top management priority although investors increasingly look toward good IP management as an indicator of future organizational growth. The research presents the IP Scorecard, a further inductive development of Kaplan and Norton's traditional Balanced Scorecard. The IP Scorecard is a strategic management tool that enables management to drive a robust industrial growth strategy that is explicitly positioned within the knowledge economy, identifying target areas for organizational development around knowledge and IP management, in order to achieve the competitive higher-ground, by strategically creating and capitalizing on value arising from innovation and R&D activities. The IP Scorecard sensitizes management on where and how to carve out competitive turf, particularly from a knowledge and IP value creation perspective, seeking ultimately to enhance corporate/shareholder and product-life-cycle value. The paper encompasses limited field research findings on key IP-related strategic management considerations that promote leadership in innovation and R&D, across the product life cycle.

A “system dynamics‐based Balanced Scorecard” to support strategic decision making

PurposeThis paper aims to focus on the development of a “dynamic Balanced Scorecard” and to demonstrate that matching the traditional Balanced Scorecard (BSC) architecture with system dynamics principles offers better support for strategic management decisions.Design/methodology/approachThe paper is based on a case study related to a service‐based business. The maps, the mathematical model and the BSC developed according to system dynamics modelling principles are discussed.FindingsA system dynamics‐based BSC, particularly if embedded into a management flight simulator, would allow exploration and understanding of features of complexity and dynamics, consideration of feedback loops rather than unidirectional causality, the use of mapping tools for a more comprehensive design of the strategy maps, the facilitation of a process of organisational learning; and support for policy design and strategic analysis performed by managers.Originality/valueThe value of this paper is two‐fold: first, it shows that by using system dynamics modelling principles it is possible to overcome positively some limitations of the original BSC framework; second, the paper provides information and suggestions that are helpful for companies that are interested in developing strategic management systems based on both BSC architecture and on system dynamics principles and simulation tools (e.g. the management flight simulator).

How does environmental accounting information influence attention and investment?

PurposeEnvironmental consequences increasingly influence management strategy and choice. The purpose of this paper is to investigate the effects on attention and investment of: incorporating environmental data into a balanced scorecard (BSC), called the sustainability balanced score card (SBSC) and the organization of environmental accounting information.Design/methodology/approachIn a between‐participant design, participants (n≈ 95) chose from among two investments using BSCs. Participants were randomly assigned to one of three conditions: no environmental data (control or BSC condition); environmental data embedded within the traditional BSC (four‐perspective SBSC); or environmental data added to a BSC as a standalone fifth perspective (five‐perspective SBSC).FindingsInvestment to achieve environmental stewardship objectives was greater with the four‐perspective SBSC than the traditional BSC. In addition, participants were most efficient, i.e. spent the least total time, and least time per data element examined, with the four‐perspective SBSC. Finally, the time spent examining, and decision weight given to, environmental data were unrelated.Research limitations/implicationsProfessional managers and accountants may have greater knowledge of environmental metrics than do students, who are the participants in this study; hence, the results may not generalize to higher knowledgeable professionals since their processing of environmental data may differ from the lower knowledge participants of this study.Practical implicationsThe form (i.e. organization) of environmental accounting data changed the allocation of participants' attention while the presence of environmental accounting data changed participants' investments; hence, both the presence and form of environmental accounting information influenced decision making.Originality/valueThis study is among the first to show differing influences from both the presence and organization of environmental accounting data on attention and investment.

The creation and use of scorecards in tourism planning: A Spanish example

This paper proposes a preliminary model of a balanced scorecard for tourism destinations, with a specific emphasis on sustainable development. We begin with a review of the perspectives and critical performance variables for the traditional balanced scorecard. We then present empirical work based upon quantitative analysis techniques. A survey was completed by 1531 Spanish municipalities that are oriented towards tourism and have demonstrated interest in management issues. Based on the constructs emerging from this analysis, we then show how the balanced scorecard can be modified to support the strategic planning of tourism destinations. We conclude by discussing the advantages for long-term strategic planning and sustainable tourism management.

How Does Environmental Accounting Information Influence Attention and Investment?

Purpose: Environmental consequences increasingly influence management strategy and choice. This study investigates the effects on attention and investment of: (a) incorporating environmental data into a balanced scorecard (BSC), called the sustainability balanced score card (SBSC), and, (b) the organization of environmental accounting information. Design/method/approach: In a between-participant design, participants (n ≈ 95) chose from among two investments using BSCs. Participants were randomly assigned to one of three conditions: (a) no environmental data (control or BSC condition), (b) environmental data embedded within the traditional BSC (four-perspective SBSC) or (c) environmental data added to a BSC as a standalone fifth perspective (five-perspective SBSC). Findings: Environmentally friendly investment was greater with the four-perspective SBSC than the traditional BSC. In addition, participants were most efficient, i.e., spent the least total time, and least time per data element examined, with the four-perspective SBSC. Finally, the time spent examining, and decision weight given to, environmental data were uncorrelated. Research limitations/implications: Professional managers and accountants may have greater knowledge of environmental metrics than do students, who are the participants in this study; greater knowledge of environmental metrics may lessen the extent of display effects on judgments; hence, the results may not generalize to knowledgeable professionals. Future research can test this speculation by exploring the influence of knowledge on judgments in this context. Practical implications: The form (i.e., organization) of environmental accounting data changed the allocation of attention while the presence of environmental accounting data changed participants’ investments; hence, both the presence, and form, of environmental accounting information matters. Originality/value: This study is among the first to show differing influences from both the presence and organization of environmental accounting data on attention and investment. Category: Research paper.

The Judgmental Effects of Management Communications and a Fifth Balanced Scorecard Category on Performance Evaluation

ABSTRACT: This study extends prior balanced scorecard (BSC) research by examining management’s choice of whether to include four or five BSC categories when a specific nontraditional strategic objective is present. The results of the study show that when management communications about a specific nontraditional strategic objective are limited and a set of specific strategic performance measures indicate superior performance by one manager over another, evaluators discount their reliance on these measures in their performance-related judgments when these measures are clustered into a fifth BSC category relative to when these measures are integrated among the four traditional BSC categories. That is, adding a fifth BSC category resulted in a de-emphasis of the relevant information about the specific nontraditional strategic objective. But, when a fifth BSC category is present, enhancing management communications about a specific strategic objective resulted in greater emphasis on the relevant information about the specific nontraditional strategic objective. When a traditional, four-category BSC is used, enhancing management communications about a specific strategic objective did not result in greater emphasis on the relevant information about the specific nontraditional strategic objective. Our results showing that under certain conditions information presented in a fifth BSC category is discounted by evaluators runs counter to professional literature and has practical implications for companies considering the use of additional BSC categories to communicate strategic objectives.

A New Methodology Approach for Measuring Corporate Social Responsibility Performance

The exact contribution of corporate social responsibility (CSR) to a company as well as to its stakeholders should be measurable in order to be evaluated correctly. The difficult task of measuring the results of CSR has been a matter of significant research both by academics and by practitioners. Some of the literature on corporate social responsibility combines CSR with stakeholder theory introducing corporate social performance. The literature has attempted to describe emerging models of the issues that lead to a coherent model of what would represent corporate social performance. However, it is the case that social aspects are “soft” in nature, therefore being difficult to quantify. Innovated methods of performance measurement such as that of Balanced Scorecard has lately been introduced in some companies in their attempt to include non-financial indicators to give a more balanced and forecasting power to the traditional financial performance assessment system, but the view of corporate social responsibility is rarely taken into account. Furthermore, management frameworks that try to cover social and environmental aspects, such as Global Reporting Initiative, by providing a number of related performance measures, are not able to connect them with corporate strategy and are poor evaluators of cause–effect relationships. In the present paper, a CSR performance measurement framework based on the adoption of the Balanced Scorecard approach is presented. For the development of the proposed framework, the existing assessment of CSR and Corporate Sustainability actions of the Greek companies of different sectors was analysed in order to identify common practices in CSR performance evaluation as well as existing limitations. Taking into account the social indicators suggested by the traditional balanced scorecard views, an extension of its structure is proposed in order to better embody the environmental and social aspects of company performance.

The FIFTH Perspective

Today, alliances, collaborations, and networks are synonymous with strategy. Business process outsourcing (BPO) is one such type of alliance. With increasing reliance on outsourcing, the organizational boundaries are blurring. The implications for the client organization can be tremendous, as it now relies on an outside organization to fulfill its operational objectives. Currently, there is no single framework that can effectively measure performance for BPO arrangements. In its present form, the balanced scorecard (BSC) only addresses the performance measurement needs of a single enterprise and any perspective on any external relationships is completely missing. The traditional BSC does not suffice as a performance measurement framework for BPO. While both the client and the vendor can use a BSC for their respective organizations, the strategic objectives of the organizations may not be met. In this article the authors propose a new perspective as an extension to the BSC, namely, the goals alignment perspective. Goals alignment of the two organizations will enable creation of performance measures that will help participating organizations to achieve their respective goals.

Feasibility of a Responsive Business Scorecard ? a pilot study

Several authors have pointed at opportunities to develop the well-established Business Balanced Scorecard into a Scorecard that enables companies to integrate sustainability into their strategy. Recent case studies and research experiences show that social and environmental targets are more widely recognized as strategic drivers for management. However, experiments also show that the traditional Scorecard has its limits when it comes to e.g. stakeholder management and product chain management. The European Corporate Sustainability Framework(ECSF) program distinguishes several ambition levels for Corporate Sustainability/Corporate Responsibility. The traditional Balanced Scorecard is suitable for companies that aim for Compliance-driven CS/CRor for Profit-driven CS/CR, where the financial bottom line is the ultimate indicator for success. More ambitious companies want to balance economic, social and ecological targets in a Community-driven CS/SRor Synergy-driven CS/CR.For ambitious companies, we propose a format of a Responsive Business Scorecard (RBS). The Responsive Scorecard enables companies to score at Profit, People and Planet, at the same time to integrate stakeholder demands into internal programs to improve performance. The RBS includes five Perspectives: Customers&Suppliers, Financiers&Owners, Society&Planet, Internal Process and Employees&Learning.We assessed the practical feasibility of a Responsive Scorecardin food and tourist industries. In the food industry, we analyzed whether existing business priorities of Italian companies can adequately fill a Responsive scorecard.Our conclusion is that traditional topics like finance, customers and employees are readily filled, but that sustainability topics like chain management (suppliers) and environmental performance (planet) need further elaboration. The tourist sector is dominated by Small and Medium Sized Enterprises. We investigated whether existing eco-labels for camping-sites and marinas can be developed into Responsive Scorecards. Our conclusion is that such a sector specific development of a Responsive Scorecard is possible. Further research has to show what is the value added of the new scorecard for companies in the tourist sector.

Measuring e-business performance: Towards a revised balanced scorecard approach

The balanced scorecard (BSC) is a management system that enables executives and managers to map their strategic objectives onto a set of performance measures in four inter-related areas, known as the financial, customer, learning and growth, and the internal process perspectives. Based on research into leading and lagging e-business companies and their measurement practices, this paper introduces an approach to modifying the balanced scorecard, applicable to the management of e-business units in which the customer perspective of the traditional balanced score card is supplemented by the incorporation of four additional perspectives (brand, service, market and technology) that have been found to be critical to the development and execution of e-business strategies. This approach facilitates a clearer understanding of the customer perspective, which consequently benefits the process of selecting the goals and measures associated with the other three perspectives, improving the quality of the overall decision-making and managerial processes as a whole.

Kanji's Business Scorecard

The Balanced Scorecard was first devised by Kaplan and Norton (1992, Harvard Business Review , January-February, pp. 71-79) as a measurement framework that was expected to overcome some of the deficiencies of traditional performance systems. It gives a holistic view of the organization by simultaneously looking at four important perspectives (financial, customer, internal processes, innovation and learning). Apart from being a measurement framework, the Balanced Scorecard achieved recognition as a strategic management system. The new approach to performance measurement suggested in the Balanced Scorecard is consistent with the initiatives under way in many companies: cross-functional integration, continuous improvement, customer-supplier partnerships and team rather than individual accountability. In this sense, it fits well into the quality management philosophy, embracing some of the business excellence principles of Kanji's Business Excellence Model. Nevertheless, the Balanced Scorecard, as presented by Kaplan and Norton, is not without limitations. The causality links suggested among the four perspectives are particularly problematic and ambiguous. Additionally, it fails to recognize explicitly the contributions of important stakeholders, such as employees and suppliers. Taking into account the potentialities and limitations of the traditional Balanced Scorecard, we propose the development of a new framework integrating the elements of Kanji's Business Excellence Model and taking advantage of the strengths of its sound methodological support. The Business Scorecard may be improved by integrating the total quality management principles and critical success factors that constitute Kanji's Business Excellence Model. The Kanji's Business Scorecard we present in this paper is not only a conceptual model, but also a measurement model. Furthermore, Kanji's approach has the potential to give a deeper understanding of how achievements in the different areas feed each other to form a cycle of continuous improvement. Finally, the implementation of Kanji's Business Scorecard can help organizations to develop, cascade and implement a strategy for business excellence.

Kanji's Business Scorecard

The balanced scorecard was first devised by Kaplan and Norton (1992, Harvard Business Review, Jan.–Feb., pp. 71-79) as a measurement framework that was expected to overcome some of the deficiencies of traditional performance systems. It gives a holistic view of the organization by simultaneously looking at four important perspectives (financial, customer, internal processes, innovation and learning). Apart from being a measurement framework, the balanced scorecard achieved recognition as a strategic management system. The new approach to performance measurement suggested in the balanced scorecard is consistent with the initiatives under way in many companies: cross-functional integration, continuos improvement, customer–supplier partnerships and team rather than individual accountability. In this sense, it fits well into the quality management philosophy, embracing some of the business excellence principles of Kanji's Business Excellence Model. Nevertheless, the balanced scorecard, as presented by Kaplan and Norton, is not without limitations. The causality links suggested among the four perspectives are particularly problematic and ambiguous. Additionally, it fails to recognize explicitly the contributions of important stakeholders, such as employees and suppliers. Taking into account the potentialities and limitations of the traditional balanced scorecard, we propose the development of a new framework integrating the elements of Kanji's Business Excellence Model (Kanji, 1998, Total Quality Management, 9, pp. 633-643) and taking advantage of the strengths of its sound methodological support. The business scorecard may be improved by integrating the total quality management principles and critical success factors that constitute Kanji's Business Excellence Model. The Kanji's Business Scorecard (KBS) we present in this paper is not only a conceptual model, but also a measurement model. Furthermore, Kanji's approach has the potential to give a deeper understanding of how achievements in the different areas feed each other to form a cycle of continuous improvement. Finally, the implementation of KBS can help organizations to develop, cascade and implement a strategy for business excellence.