IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v61y2021is1p1815-1849.html
   My bibliography  Save this article

Testing cause‐and‐effect relationships within a balanced scorecard

Author

Listed:
  • Ralph Kober
  • Deryl Northcott

Abstract

According to Kaplan and Norton, a fundamental tenet of the balanced scorecard (BSC) is that cause‐and‐effect relationships exist across measures within its four perspectives. However, prior research on BSCs has provided equivocal findings as to whether these relationships exist. Using a public sector BSC, we conduct a panel Granger causality analysis and find evidence of causal relationships. We highlight the importance of this finding from both a research and practice perspective.

Suggested Citation

  • Ralph Kober & Deryl Northcott, 2021. "Testing cause‐and‐effect relationships within a balanced scorecard," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 1815-1849, April.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:s1:p:1815-1849
    DOI: 10.1111/acfi.12645
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/acfi.12645
    Download Restriction: no
    File URL: https://libkey.io/10.1111/acfi.12645?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Brown, Steven P. & Lam, Son K., 2008. "A Meta-Analysis of Relationships Linking Employee Satisfaction to Customer Responses," Journal of Retailing, Elsevier, vol. 84(3), pages 243-255.
    2. Granger, C. W. J., 1980. "Testing for causality : A personal viewpoint," Journal of Economic Dynamics and Control, Elsevier, vol. 2(1), pages 329-352, May.
    3. Banker, Rajiv D. & Chang, Hsihui & Pizzini, Mina, 2011. "The judgmental effects of strategy maps in balanced scorecard performance evaluations," International Journal of Accounting Information Systems, Elsevier, vol. 12(4), pages 259-279.
    4. Mitchell, Janet B. & Harrow, Brooke, 1994. "Costs and outcomes of inpatient versus outpatient hernia repair," Health Policy, Elsevier, vol. 28(2), pages 143-152, May.
    5. Rajiv D. Banker & Raj Mashruwala, 2007. "The Moderating Role of Competition in the Relationship between Nonfinancial Measures and Future Financial Performance," Contemporary Accounting Research, John Wiley & Sons, vol. 24(3), pages 763-793, September.
    6. Heidi Sundin & Markus Granlund & David Brown, 2010. "Balancing Multiple Competing Objectives with a Balanced Scorecard," European Accounting Review, Taylor & Francis Journals, vol. 19(2), pages 203-246.
    7. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    8. R. Alan Webb, 2004. "Managers' Commitment to the Goals Contained in a Strategic Performance Measurement System," Contemporary Accounting Research, John Wiley & Sons, vol. 21(4), pages 925-958, December.
    9. Emirmahmutoglu, Furkan & Kose, Nezir, 2011. "Testing for Granger causality in heterogeneous mixed panels," Economic Modelling, Elsevier, vol. 28(3), pages 870-876, May.
    10. Sandra C. Vera†Muñoz & Margaret Shackell & Marc Buehner, 2007. "Accountants' Usage of Causal Business Models in the Presence of Benchmark Data: A Note," Contemporary Accounting Research, John Wiley & Sons, vol. 24(3), pages 1015-1038, September.
    11. Ittner, Christopher D. & Larcker, David F. & Randall, Taylor, 2003. "Performance implications of strategic performance measurement in financial services firms," Accounting, Organizations and Society, Elsevier, vol. 28(7-8), pages 715-741.
    12. Hirotugu Akaike, 1969. "Fitting autoregressive models for prediction," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 21(1), pages 243-247, December.
    13. Deryl Northcott & Necia France, 2005. "The Balanced Scorecard in New Zealand Health Sector Performance Management: Dissemination to Diffusion," Australian Accounting Review, CPA Australia, vol. 15(37), pages 34-46, November.
    14. Abernethy, Margaret A. & Stoelwinder, Johannes U., 1995. "The role of professional control in the management of complex organizations," Accounting, Organizations and Society, Elsevier, vol. 20(1), pages 1-17, January.
    15. Sitzia, John & Wood, Neil, 1997. "Patient satisfaction: A review of issues and concepts," Social Science & Medicine, Elsevier, vol. 45(12), pages 1829-1843, December.
    16. Hoque, Zahirul, 2014. "20 years of studies on the balanced scorecard: Trends, accomplishments, gaps and opportunities for future research," The British Accounting Review, Elsevier, vol. 46(1), pages 33-59.
    17. Hsiao, Cheng, 1979. "Causality tests in econometrics," Journal of Economic Dynamics and Control, Elsevier, vol. 1(4), pages 321-346, November.
    18. Homburg, Christian & Stock, Ruth, 2004. "The Link between Sales People’s Job Satisfaction and Customer Satisfaction in a Business-to-Business Context: A Dyadic Analysis," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 60486, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    19. Shivaram Rajgopal & Mohan Venkatachalam & Suresh Kotha, 2003. "The Value Relevance of Network Advantages: The Case of E–Commerce Firms," Journal of Accounting Research, Wiley Blackwell, vol. 41(1), pages 135-162, March.
    20. Homburg, Christian & Stock, Ruth, 2004. "The Link Between Sales People’s Job Satisfaction and Customer Satisfaction in a Business-to-Business Context: A Dyadic Analysis," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 35550, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    21. Mary A. Malina & Hanne S. O. Nørreklit & Frank H. Selto, 2007. "Relations among Measures, Climate of Control, and Performance Measurement Models," Contemporary Accounting Research, John Wiley & Sons, vol. 24(3), pages 935-982, September.
    22. Trueman, B & Wong, MHF & Zhang, XJ, 2000. "The eyeballs have it: Searching for the value in internet stocks," Journal of Accounting Research, Wiley Blackwell, vol. 38, pages 137-162.
    23. Anne M. Farrell & Joan Luft & Michael D. Shields, 2007. "Accuracy in Judging the Nonlinear Effects of Cost and Profit Drivers," Contemporary Accounting Research, John Wiley & Sons, vol. 24(4), pages 1139-1169, December.
    24. Douglas M. Walker & Peter T. Calcagno, 2013. "Casinos and political corruption in the United States: a Granger causality analysis," Applied Economics, Taylor & Francis Journals, vol. 45(34), pages 4781-4795, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dalla Via, Nicola & Perego, Paolo & van Rinsum, Marcel, 2019. "How accountability type influences information search processes and decision quality," Accounting, Organizations and Society, Elsevier, vol. 75(C), pages 79-91.
    2. Jeremy S. Wolter & Dora Bock & Jeremy Mackey & Pei Xu & Jeffery S. Smith, 2019. "Employee satisfaction trajectories and their effect on customer satisfaction and repatronage intentions," Journal of the Academy of Marketing Science, Springer, vol. 47(5), pages 815-836, September.
    3. Miriam Benitez & Jose M. Leon-Perez & Alejandro Orgambídez & Francisco J. Medina, 2021. "Interpersonal Conflicts in the Unit Impact the Service Quality Rated by Customers: The Mediating Role of Work-Unit Well-Being," IJERPH, MDPI, vol. 18(15), pages 1-13, July.
    4. Li, Haiqi & Zhong, Wanling & Park, Sung Y., 2016. "Generalized cross-spectral test for nonlinear Granger causality with applications to money–output and price–volume relations," Economic Modelling, Elsevier, vol. 52(PB), pages 661-671.
    5. Evanschitzky, Heiner & Wangenheim, Florian v. & Wünderlich, Nancy V., 2012. "Perils of Managing the Service Profit Chain: The Role of Time Lags and Feedback Loops," Journal of Retailing, Elsevier, vol. 88(3), pages 356-366.
    6. Banker, Rajiv D. & Chang, Hsihui & Pizzini, Mina, 2011. "The judgmental effects of strategy maps in balanced scorecard performance evaluations," International Journal of Accounting Information Systems, Elsevier, vol. 12(4), pages 259-279.
    7. Kraus, Florian & Haumann, Till & Ahearne, Michael & Wieseke, Jan, 2015. "When Sales Managers and Salespeople Disagree in the Appreciation for Their Firm: The Phenomenon of Organizational Identification Tension," Journal of Retailing, Elsevier, vol. 91(3), pages 486-515.
    8. Kerry A. Humphreys, 2023. "The balanced scorecard: Do managers need a strategy map when evaluating performance?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4357-4373, December.
    9. Francesca Francioli, 2018. "Strategic performance management systems in Italian banks. A research note," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2018(2), pages 155-178.
    10. Dorothea Wahyu Ariani, 2015. "Employee Satisfaction and Service Quality: Is There Relations?," International Journal of Business Research and Management (IJBRM), Computer Science Journals (CSC Journals), vol. 6(3), pages 33-44, September.
    11. Carlos Suárez-Gargallo & Patrocinio Zaragoza-Sáez, 2021. "How the Balanced Scorecard Is Implemented in the Spanish Footwear Industry," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    12. Elizabeth Chinomona & Tebogo Mofokeng, 2015. "The Influence Of Workplace Condition And Employee Satisfaction On Employee Commitment In South African," Journal of Social Sciences (COES&RJ-JSS), , vol. 4(1), pages 649-663, January.
    13. Elizabeth Chinomona & Tebogo Mofokeng, 2015. "The influence of workplace condition and employee satisfaction on employee committee in South African Companies," Journal of Business & Management (COES&RJ-JBM), , vol. 3(2), pages 356-369, April.
    14. G. Tomas M. Hult & Jeannette A. Mena & O. C. Ferrell & Linda Ferrell, 2011. "Stakeholder marketing: a definition and conceptual framework," AMS Review, Springer;Academy of Marketing Science, vol. 1(1), pages 44-65, March.
    15. Burney, Laurie L. & Henle, Christine A. & Widener, Sally K., 2009. "A path model examining the relations among strategic performance measurement system characteristics, organizational justice, and extra- and in-role performance," Accounting, Organizations and Society, Elsevier, vol. 34(3-4), pages 305-321, April.
    16. Fenwick Jing & Gayle Avery & Harald Bergsteiner, 2014. "Enhancing performance in small professional firms through vision communication and sharing," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 599-620, June.
    17. Barnes, Donald C. & Ponder, Nicole & Hopkins, Christopher D., 2015. "The impact of perceived customer delight on the frontline employee," Journal of Business Research, Elsevier, vol. 68(2), pages 433-441.
    18. Abdel-Maksoud, Ahmed & Cheffi, Walid & Ghoudi, Kilani, 2016. "The mediating effect of shop-floor involvement on relations between advanced management accounting practices and operational non-financial performance indicators," The British Accounting Review, Elsevier, vol. 48(2), pages 169-184.
    19. Looney, Robert E., 1997. "Infrastructure and private sector investment in Pakistan," Journal of Asian Economics, Elsevier, vol. 8(3), pages 393-420.
    20. Loperfido, Nicola, 2010. "A note on marginal and conditional independence," Statistics & Probability Letters, Elsevier, vol. 80(23-24), pages 1695-1699, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:acctfi:v:61:y:2021:i:s1:p:1815-1849. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.