Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The causal relationships between performance drivers and outcomes Reinforcing balanced scorecards' implementation through system dynamics models

The causal relationships between performance drivers and outcomes Reinforcing balanced... Purpose – The purpose of this paper is to speculate on the potentials of the system dynamics methodology to contribute to the balanced scorecard (BSC) design and implementation by producing a detailed causal relationships model that links strategic and operational objectives in a more accurate and effective way. Design/methodology/approach – The work is based on the methodological principles and the operational tools provided by the system dynamics methodology and the BSC framework. Findings – One of the main areas that both the relevant literature and Kaplan and Norton identified as critical in developing the original BSC framework is related to the identification and the quantification of “causal relationships” across the BSC, and to the subsequent opportunity to use a mathematical‐computer model to test and simulate such assumptions and their impacts on strategy implementation. Such issues are addressed in this paper. Practical implications – The paper provides information and consideration on how to model and assess causality and cause‐and‐effect relationships in BSC environments. Subsequently, it provides some reflections on the contribution of the system dynamics methodology for the design and implementation of the BSC. Originality/value – The value of this paper is two‐fold: first, it shows that relying on system dynamics tools and methodological principles is possible to better define the concept of causality in BSC frameworks; second, it shows that by integrating system dynamics modelling principles and the BSC framework it is possible to develop a comprehensive approach to performance management and strategy formulation and strategy implementation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting & Organizational Change Emerald Publishing

The causal relationships between performance drivers and outcomes Reinforcing balanced scorecards' implementation through system dynamics models

Download PDF
11 pages

Loading next page...
 
/lp/emerald-publishing/the-causal-relationships-between-performance-drivers-and-outcomes-0CU1W0D4jz
Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
1832-5912
DOI
10.1108/18325911211273518
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to speculate on the potentials of the system dynamics methodology to contribute to the balanced scorecard (BSC) design and implementation by producing a detailed causal relationships model that links strategic and operational objectives in a more accurate and effective way. Design/methodology/approach – The work is based on the methodological principles and the operational tools provided by the system dynamics methodology and the BSC framework. Findings – One of the main areas that both the relevant literature and Kaplan and Norton identified as critical in developing the original BSC framework is related to the identification and the quantification of “causal relationships” across the BSC, and to the subsequent opportunity to use a mathematical‐computer model to test and simulate such assumptions and their impacts on strategy implementation. Such issues are addressed in this paper. Practical implications – The paper provides information and consideration on how to model and assess causality and cause‐and‐effect relationships in BSC environments. Subsequently, it provides some reflections on the contribution of the system dynamics methodology for the design and implementation of the BSC. Originality/value – The value of this paper is two‐fold: first, it shows that relying on system dynamics tools and methodological principles is possible to better define the concept of causality in BSC frameworks; second, it shows that by integrating system dynamics modelling principles and the BSC framework it is possible to develop a comprehensive approach to performance management and strategy formulation and strategy implementation.

Journal

Journal of Accounting & Organizational Change – Emerald Publishing

Published: Oct 26, 2012

Keywords: Balanced scorecard; Strategic management; Strategic performance

References

  • Relevance assumed: a case study of balanced scorecard development using system dynamics
    Akkermans, H.A.; Van Oorschot, K.E.
  • Building and diffusion of management accounting innovations – the case of the balanced scorecard in Sweden
    Ax, C.; Biørnenak, T.
  • Formal aspects of model validity and validation in system dynamics
    Barlas, Y.
  • A ‘system dynamics‐based balanced scorecard’ to support strategic decision making: insights from a case study
    Barnabè, F.
  • Firm resources and sustained competitive advantage
    Barney, J.
  • The French Tableau de Bord and the American balanced scorecard: a critical analysis
    Bessire, D.; Baker, C.R.
  • Enhancing strategy design and planning in public utilities through “dynamic” balanced scorecards: insights from a project in a city water company
    Bianchi, C.; Montemaggiore, G.B.
  • Management accounting: issues in interpreting its nature and change
    Busco, C.; Quattrone, P.; Riccaboni, A.
  • A system dynamics‐based simulation experiment for testing mental model and performance effects of using the balanced scorecard
    Capelo, C.; Ferreira Dias, J.
  • Issues in the design and use of system‐dynamics‐based interactive learning environments
    Davidsen, P.I.
  • An investigation of the effect of balanced scorecard implementation on financial performance
    Davis, S.; Albright, T.L.
  • Asset stock accumulation and sustainability of competitive advantage
    Dierickx, I.; Cool, K.
  • Management by objectives and the balanced scorecard: will Rome fall again?
    Dinesh, D.; Palmer, E.
  • Strategic Development Methods and Models
    Dyson, R.G.; O'Brien, A.
  • Performance Measurement and Management Control: Superior Organizational Performance
  • Expert knowledge elicitation for improving mental and formal models
    Ford, D.; Sterman, J.D.
  • Industrial Dynamics
    Forrester, J.W.
  • Principle of Systems
    Forrester, J.W.
  • Counterintuitive behavior of social systems
    Forrester, J.W.
  • Weighing it up – a literature review for the balanced scorecard
    Hepworth, P.
  • Linking balanced scorecard measures to size and market factors: impact on organizational performance
    Hoque, Z.; James, W.
  • Conceptual foundations of the balanced scorecard
    Kaplan, R.S.
  • The balanced scorecard: measures that drive performance
    Kaplan, R.S.; Norton, D.P.
  • Linking the balanced scorecard to strategy
    Kaplan, R.S.; Norton, D.P.
  • The Balanced Scorecard: Translating Strategy into Action
    Kaplan, R.S.; Norton, D.P.
  • Having trouble with your strategy? Then map it!
    Kaplan, R.S.; Norton, D.P.
  • The Strategy‐Focused Organization: How Balanced Scorecard Companies Thrive in the New Competitive Environment
    Kaplan, R.S.; Norton, D.P.
  • Strategy Maps: Converting Intangible Assets into Tangible Outcomes
    Kaplan, R.S.; Norton, D.P.
  • Alignment: Using the Balanced Scorecard to Create Corporate Synergies
    Kaplan, R.S.; Norton, D.P.
  • The Execution Premium: Linking Strategy to Operations for Competitive Advantage
    Kaplan, R.S.; Norton, D.P.
  • Conceptual foundations of the balanced scorecard
    Kaplan, R.S.; Norton, D.P.
  • From key success factors to key success loops
    Kim, D.H.
  • Balanced scorecards in Finnish companies: a research note
    Malmi, T.
  • Automating the balanced scorecard – selection criteria to identify appropriate software applications
    Marr, B.; Neely, A.
  • Strategic performance measurement: benefits, limitations and paradoxes
    Micheli, P.; Manzoni, J.F.
  • Strategic Modelling and Business Dynamics
    Morecroft, J.D.W.
  • Measuring Business Performance
    Neely, A.
  • Why measurement initiatives fail
    Neely, A.; Bourne, M.
  • Balanced Scorecard Step‐by‐Step for Government and Nonprofit Agencies
    Niven, P.R.
  • The balance on the balanced scorecard – a critical analysis of some of its assumptions
    Nørreklit, H.
  • The balanced scorecard: what is the score? A rhetorical analysis of the balanced scorecard
    Nørreklit, H.
  • Performance Drivers: A Practical Guide to Using the Balanced Scorecard
    Olve, N.G.; Roy, J.; Wetter, M.
  • Introduction to System Dynamics Modeling with Dynamo
    Richardson, G.P.; Pugh, A.
  • Management tools and techniques: a survey
    Rigby, D.
  • The Fifth Discipline: The Art and Practice of the Learning Organization
    Senge, P.M.
  • A descriptive analysis of the implementation of balanced scorecard in German‐speaking countries
    Speckbacher, G.; Bischof, J.; Pfeiffer, T.
  • Business Dynamics: Systems Thinking and Modeling for a Complex World
    Sterman, J.D.
  • Mental models and computer models
    Vennix, A.M.J.
  • Group Model Building: Facilitating Team Learning Using System Dynamics
    Vennix, A.M.J.
  • Competitive Strategy Dynamics
    Warren, K.
  • Strategic Management Dynamics
    Warren, K.
  • A resource‐based view of the firm
    Wernerfelt, B.
  • Using generic system archetypes to support thinking and modelling
    Wolstenholme, E.F.