The Balanced Scorecard: Innovative Performance Measurement and Management Control System
Keywords:balanced scorecard, performance measurement, management control, innovation, innovation management, innovative potential, research and development, small and medium-sized enterprises, literature analysis, Czech Republic.
AbstractThe paper presents an overview of studies that have described the emergence of innovative performance measurement systems. It is dedicated to the issue of potential implementation of Balanced Scorecard as a strategic management control system in Czech small and medium-sized enterprises. The framework is based on literature review and analysis about traditional management control systems, their pros and cons, and modern methods of performance measurement, such as Balanced Scorecard. Numerous publications discuss its potential advantages and recommend its implementation. On the other hand, there exist huge limitations for small and medium-sized enterprises, such as time, organization and money. Benefits resulting from successful Balanced Scorecard implementation must overweigh the costs of designing, implementing, and using it. Therefore, the paper is supposed to motivate researchers to conduct more large scale studies in the area of innovative performance measurement systems implementation in different business sector and areas.
Anthony R.N. (1965) Planning and control systems: Framework for analysis. Boston: Harvard University Press. 180p.
Atkinson A.A, Balakrishnan R, Booth P, Cote J.M, Groot T, Malmi T, Roberts H, Uliana E and Wu A. (1997) New directions in management accounting research. Journal of Management Accounting Research. 9: 79-108. DOI 10.1016/S1044-5005(90)70051-0
Aureli S. (2010) The introduction of innovative performance measurement and management control systems: the role of financial investors and their acquired companies. In Epstein et al. editors. Performance Measurement and management control: Innovative Concepts and practise, Emerald Group Publishing Limited. pp. 81-114. DOI 10.1108/s1479-3512(2010)0000020007
Bassani C, Lazzarotti V, Manzini R, Pellegrini L, Santomauro S (2010) Measuring performance in R&NPD: the case of Whitehead Alenia Sistemi Subacquei – a Finmeccanica company. European Journal of Innovation Management. 13(4): 481-506. DOI 10.1108/14601061011086302
Bessire D and Baker C.R (2005) The French tableau de bord and the American balanced scorecard: A critical analysis. Critical Perspectives on Accounting. 16(6): 645-664. DOI 10.1016/j.cpa.2004.01.004
Bigliardi B, and Bottani E (2010) Implementing the balanced scorecard in the mechanical industry: Evidence from a case study. International Journal of Management and Decision Making. 11(2): 140-162. DOI 10.1504/ijmdm.2010.035214
Bitici U.S, Carrie A.S and McDevitt, L (1997) Integrated performance measurement systems: A development guide. International Journal of Operations and Production Management. 17(5): 522-534. DOI 10.1108/09544789710159443
Boston Consulting Group (2006) Measuring innovation 2006 https://www.bcgperspectives.com/content/articles/cost_efficiency_asset_optimization_growth_measuring_innovation_2006 [Accessed 7 July, 2013]
Bourguignon A, Malleret V and Norreklit H (2004) The American balanced scorecard versus the French tableau de bord: The ideological dimension. Management Accounting Research. 15(2): 107-134. DOI 10.1016/j.mar.2003.12.006
Bremser W.G and Barsky N.P (2004) Utilizing the balanced scorecard for R&D performance measurement. R&D Management. 34(3): 229-238. DOI 10.1111/j.1467-9310.2004.00335.x
Burkert M, Davila A and Oyon, D (2010) Performance consequences of balanced scorecard adoptions: Claim for large-scale evidence and propositions for future research. In Epstein et al. editors. Performance Measurement and management control: Innovative Concepts and practise, Emerald Group Publishing Limited. pp. 345-361. DOI 10.1108/s1479-3512(2010)0000020015
Cobbold I.C and Lawrie G.J.G (2002) Classification of balanced scorecard based on their effectiveness as strategic control or management control tools. Third International Conference on Performance Measurement and Management (PMA 2002). Boston. pp. 1-10.
Chakravarthy B.S (1986) Measuring strategic performance. Strategic Management Journal. 7(5): 437-458. DOI 10.1002/smj.4250070505
Charnes A, Cooper W.W and Rhodes, E (1978) Measuring the efficiency of decision making units. European Journal of Operational Research.2: 429-444. DOI 10.1016/0377-2217(79)90229-7
Chiesa V and Frattini F (2009) Evaluation and performance measurement of research and development. Cheltenham: Edward Elgar Publishing. 301p. DOI 10.4337/9781849801942
Chow C.W, Haddad K.M and Williamson, J.E (1997). Applying the balanced scorecard to small companies. Management Accounting. 79(2): 21-27.
Davila T, Epstein M.J and Shelton R.D (2013) Making innovation work: How to manage it, measure it, and profit from it. Updated ed. Upper Saddle River: FT Press. 348p.
De Geuser F, Mooraj S and Oyon, D (2009) Does the balanced scorecard add value? Empirical evidence on its effect on performance. European Accounting Review. 18(1): 93-112. DOI 10.1080/09638180802481698
Epstein M.J and Manzoni J.F (1997). The balanced scorecard and tableau de bord: Translating strategy into action. Management Accounting: Official Magazine of Institute of Management Accountants. 79(2): 28-36.
European Foundation for Quality Management (1999) EFQM Model for Business Excellence: Company Guidelines. Brussels: EFQM.
Faupel C. (2012) Value-based performance management. Advances in Management Accounting. 20: 187-208. DOI 10.1108/s1474-7871(2012)0000020014
Fiorentino R (2010) Performance measurement in strategic changes. In Epstein et al editors. Performance Measurement and management control: Innovative Concepts and practise, Emerald Group Publishing Limited. pp. 253-283. DOI 10.1108/s1479-3512(2010)0000020012
Gleich R (2001) Das System des Performance Measurement: Theoretisches Grundkonzept, Entwicklungs und Anwendungsstand. München: Vahlen. 464p.
Hayes R.H and Abernathy W (1980) Managing our way to economic decline. Harvard Business Review. 58(4): 67-77.
Hoffecker J and Goldenberg C (1994) Using the balanced scorecard to develop company wide performance measures. Journal of Cost Management. 8(3): 5-17.
Horvath and Partners (2004) Nova koncepce controlling. Praha: Profess Consulting. 288p.
Horvath and Partners. (2002) Balanced Scorecard v praxi. Praha: Profess Consulting. 386p.
Hronec S.M (1993) Vital signs: using quality, time, and cost performance measurements to chart your company’s future. New York: Amacom. 256p.
Ittner C.D and Larcker, D.F (1998a) Are non financial measures leading indicators of financial performance? An analysis of customer satisfaction. Journal of Accounting Research. 3(3): 1-35. DOI 10.2307/2491304
Ittner C.D and Larcker, D.F (1998b) Innovations in performance measurement: Trends and research implications. Journal of Management Accounting Research. 10: 205-238.
Ittner C.D and Larcker, D.F (2001) Assessing empirical research in managerial accounting: A value-based management perspective. Journal of Accounting and Economics. 32(1-3): 349-410. DOI 10.1016/s0165-4101(01)00026-x
Johnson H.T and Kaplan R.S (1987) Relevance lost – The rise and fall of management accounting. Boston: Harvard Business School Press. 296p.
Kaplan R.S and Norton P.D (1992) The balanced scorecard: Measures that drive performance. Harvard Business Review. 70(1): 71-79.
Kaplan R.S and Norton P.D. (1993) Putting the balanced scorecard to work. Harvard Business Review. 71(5): 134-147. DOI 10.1016/b978-0-7506-7009-8.50023-9
Kaplan R.S and Norton P.D. (1996) The balanced scorecard: Translating strategy into action. Boston: Harvard Business School Press. 336p. DOI 10.1016/s0024-6301(97)80925-9
Kaplan R.S and Norton P.D (2001a) The strategy focused organization. Boston: Harvard Business School Press. 416p.
Kaplan R.S and Norton, P.D (2001b) Transforming the balanced scorecard from performance measurement to strategic management: Part I. Accounting Horizons. 15(2): 87-104. DOI 10.2308/acch.2001.15.1.87
Keegan D.P, Eiler R.G and Jones C.R (1989) Are your performance measures obsolete? Management Accounting. 70(12): 45-50.
Kerssens-van Drongelen I.C, Bilderbeek J (1999) R&D performance measurement: more than choosing a set of metrics. R&D Management. 29(1): 35-46. DOI 10.1111/1467-9310.00115
Kerssens-van Drongelen I.C, Nixon B and Pearson A (2000) Performance measurement in industrial R&D. International Journal of Management Reviews. 2(2): 111-143. DOI 10.1111/1468-2370.00034
Kislingerova E (2008) Inovace nastroju ekonomiky a management organizaci. Praha: C.H.Beck. 315p.
Lebas M. (1994) Managerial accounting in France – Overview of past traditional and current practise. European Accounting Review. 3(3): 471-487. DOI 10.1080/09638189400000032
McNair C, Lynch R.R and Cross K.L (1990) Do financial and nonfinancial measures have to agree? Management Accounting. 5: 26-36.
Merchant K (1985) Control in business organizations. Boston: Harvard Business School Press. 161p.
Merschmann U, Thonemann U.W (2011) Supply chain flexibility, uncertainty and firm performance: an empirical analysis of German manufacturing firms. International Journal of Production Economics. 130(1): 43-53. DOI 10.2139/ssrn.1567612
Meyer C (1994) How the right measures help teams excel. Harvard Business Review. 7(3): 95-103. DOI 10.1016/s0737-6782(95)90039-x
Meyer D.W and Markiewicz M.A (1997) Developing a balanced scorecard at Wachovia corporation. Bank Accounting and Finances. 11(1): 13-20.
Ministry of Industry and Trade of the Czech Republic. (2012). Nova koncepce podpory malych a strednich podnikatelu na obdobi let 2014 az 2020, aneb 52 opatrení pro male a stredni podnikatele. http://www.mpo.cz/dokument102987.html [Accessed 12 July 2013].
Mooraj S, Oyon D and Hostettler D (1999) The balanced scorecard: A necessary good or an unnecessary evil? European Management Journal. 17(5): 481-491. DOI 10.1016/s0263-2373(99)00034-1
Nanni A.J, Dixon J.R and Vollman T.E (1992) Integrating performance measurement: Management accounting to support new manufacturing realities. Journal of Management Accounting Research. 4: 1-19.
Neely A (2005) The evolution of performance measurement research. Development in the last decade and a research agenda for the next. International Journal of Operations & Production Management. 25(12): 1264-1277. DOI 10.1108/01443570510633648
Neely A and Adams C (2001) The performance prism perspective. Journal of Cost Management. 15(1): 7-15.
Neumann B, Roberts M.K and Cauvin E (2008) Financial and nonfinancial performance measures. Journal of Cost Management. 22(6): 5-14.
Neufeld G.A, Semeoni P.A and Taylor M.A (2001) High performance research organizations. Research Technology Management. 44(6): 42-52.
Niven P.R (2005) Balanced scorecard diagnostic. Hoboken: John Wiley & Sons. 224p.
Niven P.R (2006) Balanced scorecard step-by-step: Maximizing performance and maintaining results. Hoboken: John Wiley & Sons. 318p.
Niven P.R (2014) Balanced Scorecard Evolution: A Dynamic Approach to Strategy Execution. Hoboken: John Wiley & Sons. 368p. DOI 10.1002/9781118915011
Norreklit H (2003) The balanced scorecard? What is the core? A rhetorical analysis of the balanced scorecard. Accounting, Organizations and Society. 28(6): 597-619. DOI 10.1016/s0361-3682(02)00097-1
Otley D (1999) Performance management: A framework for management control systems research. Management Accounting Research. 10(4): 363-382. DOI 10.1006/mare.1999.0115
Palmer R.J (1992) Strategic goals and objectives and the design of strategic management accounting systems. Advances in Management Accounting. 1: 179-204.
Pitra Z. (2006) Management inovacnich aktivit. Praha: Profesional Publishing. 438p.
Pritchard R. D, Harrell M.M, DiazGranados D and Guzman M.J (2008) The productivity measurement and enhancement system: A meta-analysis. Journal of Applied Psychology. 93(3): 540-567. DOI 10.1037/0021-9010.93.3.540
Raake A (2008) Strategisches Performace Measurement, Anwendungsstand und Gestaltungsmöglichkeiten am Beispiel des Öffentlichen Personennahverkehrs. Berlin: Lit Verlag. 192p.
Rigby D (2007) Executive guide – Management tools 2007. Boston: Bain & Company Publishing. 74p.
Sibbet D (1997) 75 years of management ideas practices 1922-1997. Harvard Business Review. 75(5): 2-12.
Serfling K and Schulzte R (1997) Target Costing: Kundenorientierung in Kostenmanagement und Preiskalkulation. In Männel W editor. Frühzeitiges Kostenmanagement. Wiesbaden: Springer. pp. 55-76. DOI 10.1007/978-3-322-84502-3_4
Vaivio J (1999) Exploring a “non-financial” management accounting change. Management Accounting Research. 10(4): 409-437. DOI 10.1006/mare.1999.0112
Wang J, Lin W and Huang Y.H (2010) A performance-oriented risk management framework for innovative R&D project. Technovation. 30(11-12): 601-611. DOI 10.1016/j.technovation.2010.07.003
Westlund A.H (2001) Measuring environmental impact on society in the EFQM system. Total Quality Management. 12(1): 125-135. DOI 10.1080/09544120020010147
Zizlavsky O and Smakalova P (2011) Research Results in the Field of Information Support for Innovation Activities. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis. 19(4): 387-398. DOI 10.11118/actaun201159040387
How to Cite