Holistic Approach for Balanced Scorecard as Managerial Decision Making Tool

Holistic Approach for Balanced Scorecard as Managerial Decision Making Tool

Neeta Baporikar (HP-GSB, National University of Science and Technology, Namibia)
Copyright: © 2016 |Pages: 12
DOI: 10.4018/IJSDA.2016010103
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Abstract

Recent times have seen the supply side of management knowledge be it consultants, management gurus, business schools and popular press invent and diffuse countless managerial tools at a rapid-fire rate. One such tool is the Balanced Scorecard (BSC) that has been glorified and hyped as a great innovation of nineties. Through exhaustive literature and grounded theory approach, this paper examines some theoretical and methodological issues of BSC to develop a holistic perspective when adopting BSC as a managerial tool. The main purpose hereto is not to question BSC but rather to create a more holistic and down to earth picture of the tool in the minds of actual and potential users especially when adopting it as managerial tool in dynamic decision making. In the process some of the debatable aspects of BSC, contrary to the mainstream BSC literature which enthusiastically consecrates the tool stand visible.
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Literature Review

Literally, “Performance Measurement (PM)” is the process of quantifying past action (Amaratunga et al., 2001: 179, cited from Neely, 1998). In particular, the importance of PM seems to be greatly enhanced in the presence of increasing competition. Although many organizations, consultants and academics have felt dissatisfaction with existing “Performance Measurement Systems (PMS)” since the 1950s (Eccles, 1991) because of the over-emphasis on financial measures and lack of attention particularly on the gap between the strategy expressed in the activities planned and the strategy expressed in the pattern of actions actually undertaken (Norreklit, 2000; Ittner et al. 2003), there were no serious efforts to develop more robust PMS until the beginning of the 1990s. Then, in order to overcome these two inter- related problems, some authors introduced new PMS into the literature such as “Dynamic Multi-dimensional Performance Model (Maltz et al., 2003)”, “Holistic Scorecard (Sureshchandar and Leisten, 2005)” and “Systemic Scorecard (Leibold et al., 2002)”. In addition, some writers were favour of bringing some rooted PM systems back to the agenda, such as French Tableau de Bord (Bessire and Baker, 2005; Epstein and Manzoni, 1998). The intensive criticism of traditional PMS which are overwhelmingly constructed on financial measures, and claims regarding benefits of non-financial measures usage seem to be the hallmarks of these new generation PMS.

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