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Performance parameters interrelations from a balanced scorecard perspective: An analysis of Greek companies

Author

Listed:
  • Sandra Cohen
  • Dimitris Thiraios
  • Myrto Kandilorou

Abstract

Purpose - The proponents of balanced scorecard (BSc) claim that lead factors interrelate and their improvement ultimately leads to increased financial performance. The purpose of this paper is to use the underlying hypotheses of BSc in order to assess whether improvements that relate to learning and growth, internal processes and customers actually contribute to alterations of reported financial performance. Design/methodology/approach - A structured questionnaire was used and data were gathered from 90 leading Greek companies in relation to the progress they have experienced during a three-year period regarding various activities that can be broadly classified as aspects of the three qualitative perspectives of BSc (i.e. the learning and growth perspective, the internal business and production process perspective, and the customer perspective). Published financial data were used in order to calculate several financial ratios for all sample firms for the same time period. Findings - The empirical data verified the underlying theoretical hypothesis of BSc that lead BSc perspectives are positively correlated with one an: other at a statistically significant level in a sequential way. However, within a given perspective not all measures exhibit homogeneous behaviour in terms of statistical significance. Supportive evidence was also found that the companies that have improved their return on equity (ROE) and return on assets (ROA) during the analysis period have increased their efforts towards aspects that characterize the learning and growth perspective more than the companies whose ROE and ROA values decreased. Originality/value - The innovative dimension of this research work relies mainly on the fact that the BSc framework was used as a general structured model in order to assess the relationships between non-financial parameters and financial performance. Thus, conclusions are not restricted only to companies that actually apply BSc.

Suggested Citation

  • Sandra Cohen & Dimitris Thiraios & Myrto Kandilorou, 2008. "Performance parameters interrelations from a balanced scorecard perspective: An analysis of Greek companies," Managerial Auditing Journal, Emerald Group Publishing, vol. 23(5), pages 485-503, May.
  • Handle: RePEc:eme:majpps:v:23:y:2008:i:5:p:485-503
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    References listed on IDEAS

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    1. VĂ©ronique Malleret & Annick Bourguignon & Hanne Norreklit, 2004. "The American balanced scorecard versus the French tableau de bord : the ideological dimension," Post-Print hal-00486648, HAL.
    2. Kald, Magnus & Nilsson, Fredrik, 2000. "Performance measurement at Nordic companies," European Management Journal, Elsevier, vol. 18(1), pages 113-127, February.
    3. Chenhall, Robert H., 2005. "Integrative strategic performance measurement systems, strategic alignment of manufacturing, learning and strategic outcomes: an exploratory study," Accounting, Organizations and Society, Elsevier, vol. 30(5), pages 395-422, July.
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    Cited by:

    1. Alvarez, Antonio & Garcia-Cornejo, Beatriz & Perez-Mendez, Jose A. & Roibas, David, 2016. "Diversification in Spanish Dairy Farms: Key Drivers of Performance," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 19(B).

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