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Does the Balanced Scorecard Add Value? Empirical Evidence on its Effect on Performance

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  • Fabien De Geuser
  • Stella Mooraj
  • Daniel Oyon
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    Abstract

    Since its emergence at the beginning of the 1990s, numerous companies have adopted the Balanced Scorecard (BSC). This paper tackles two research questions: (1) whether the BSC adds value to companies and (2) if so, how does it contribute to organisational performance. In contrast to previous literature that does not separate these two questions, we rely on an established methodology (Foster and Swenson, 1997) to separate and quantify both the BSC contribution to performance and the way that the contribution is achieved, by applying a unique cause-and-effect scheme to the BSC. Our empirical results are based on survey data collected from 76 business units. They indicate first that the Balanced Scorecard has a positive impact on organisational performance. More specifically, the BSC improves the integration of the management processes and empowers people. Using the Strategy-Focused-Organisation (SFO) model (Kaplan and Norton, 2001), we empirically find that the sources of performance derived from the BSC are primarily of three types: (1) a better translation of the strategy into operational terms, (2) the fact that strategising becomes a continuous process, and (3) the greater alignment of various processes, services, competencies and units of an organisation.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/09638180802481698
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal European Accounting Review.

    Volume (Year): 18 (2009)
    Issue (Month): 1 ()
    Pages: 93-122

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    Handle: RePEc:taf:euract:v:18:y:2009:i:1:p:93-122

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Research concept updated
      by Timur_PhD in Business performance management research for high performance organizations on 2010-05-17 15:04:10
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    Cited by:
    1. Grafton, Jennifer & Lillis, Anne M. & Widener, Sally K., 2010. "The role of performance measurement and evaluation in building organizational capabilities and performance," Accounting, Organizations and Society, Elsevier, vol. 35(7), pages 689-706, October.

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